Thanks for posting that. $300 million credit line for Lone Pine. IPO is close. Once Lone Pine is spun off, Forest should receive a better valuation from U.S. investors who prefer all-American assets.
They will be getting a bargain. If Forest can drill 20 wells in Granite Wash and 8 EFS wells in first half 2011, they can exit the half-year pumping 15+ million barrels annually. I'm assuming 300,000 BOE in liquids from Granite and 150,000 BO from Eagle Ford in Year 1. 20 Granite wells = 6 million BOE and 8 EFS wells = 1.2 million. Combined with existing oil production, you get to 15 million barrels per year. This analysis excludes all natural gas production.
15 million barrels normalized is worth $750 million in earnings using a 50% profit margin. The stock is trading for 5.5X those estimated earnings with the potential to grow oil production 20+% annually and a lot higher with more CAPEX. Again, all natural gas production is excluded from this analysis. This stock is bargain.