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Equal Energy Ltd. Message Board

  • nawaralsaadi nawaralsaadi Feb 7, 2012 12:12 PM Flag

    a shame..

    it is a shame to see those investors giving up on the stock; while we are likely days to weeks away from a potential game changing deal for the company.


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    • Thanks Nawar for your insight. If the stock does not go up as you hope, would you be interested in forming a group to pressure mgmt. to sell the assets? I have owned Enterra since 2006, what a disaster!

      Regards, Gary

    • When you say deal, are you speaking of a possible JV or an outright sale? JVs seem to be the popular trend although this is a very small company so a buyout might make more sense.


      • 1 Reply to stcroixkidd
      • The impression I have is they are going for a JV or a farm out; I doubt that they will sell the acreage; my guess they want to increase production; and having a JV partner to finance drilling or a farm our agreement will lead to a significant increase in production, without the need for the company to inject any capital.

        Based on my research their acreage could support 100+ locations; SD is reporting 96% IRR in the play, 456K EUR and $5.6m NPV per location; at 100 locations we are looking at potential $560m value that can be created; if they get a partner to shoulder the drilling costs for at least the initial stages of the development, enormous shareholder value will be created.

        If the land is worth $60m to $80m, a partner would need to invest that same amount to match EQU contribution; with such an amount 20 to 26 locations could be drilled (based on SD costs of 3m per location); this means a quarter of the potential locations could be developed before the need for EQU to invest any funds in the play; 20 to 26 locations will create $112m to $146m in NPV, at 50% EQU share that would be $56m to $73m net to EQU; and this would still leave 80% to 75% of the play to develop.

        At $140m marketcap, the Mississippian deal will be truly game changing for the company.


    • I saw a decent sized bid at $4.05 near the close, but it's like looking down into a water barrel.

    • Chesapeake is at or under its December trading level, a lot of companies have been hurt in this sector.