Progress Energy, 1.9 TCF proven reserves, bought for about 4.5 billion. Let's see, ECA has aout 14.2 TCF proven reserves (and much more probable, and likely to increase this year). Based on the price for Progress today, ECA should sell for about 7.5 times the 4.5 billion that Progress is worth, that would equate to about 33.75 billion divided by 736 million shares or so is about $45.80 per share. We can all agree that the price paid for Progress is a hefty amount, but ECA has a lot of probable reserves. Who could swallow ECA? Shell, Chevron, XOM? At a minimum, waiting on JV announcements, at best could ECA be taken out altogether? Out of the money call options are picking up volume. I think we will have JV announcements or more before the July options expire. Good JV announcments could push ECA to $24. Rising gas prices may also boost ECA's price.
Buying was triggered by bid by Malaysia’s state oil company has made an offer to purchase Progress Energy Resources (PRQNF.PK).
If you do the math on what they are offering for PRQNF which has a tiny sliver of ECA assets - then it becomes very apparent (as the ECA CEO has repeatedly said) that the ECA shares are massively undervalued.
I tend to agree with you and I have continued to hold my shares in ECA. I just hope the allegations of wrong doing is wrong. ECA would be wise to remain clear of CHK until they clean their house. I just hope ECA doesn't need a house cleaning too.