4300/bo from evi at going rate of 150k per flowing = 645million
11000/ bow ng other at 30k per flowing boe= 330 million
value of narraway, Ojay, Utica and other 800k acres =600 million
gross 1.545 billion in assets
net debt 420 million
nav=1.1 billion approx or $12 a share of net valve, discount heavy, fire sale of .50 on the dollar = $6 a share or 450% higher from here.
-liquidity at 120million
-no debt maturing for years
-new pipeline and take away capacity forecasted to remove discount of WTI to Brent in next 18-24 months
-forward cure on NG 70% higher over next 24 months
-70% + of rev coming from liquids
-half oil hedged above $100 a barrel
approved to downspace from 6 wells per section to 16 per section in evi to move then double 10 year inventory of drilling locations to over a 1000 location
-OOIP in evi between 700-1.3 billion barrels of sweet crude at a 30% recovery factor which included water-flood 210million to 400 million barrels recoverable
Edmonton oil differential now at a $13.5 premium to WTI = we are getting $110+ per barrel netting back over 80$
-Located in Canada USA largest oil exporter and no risk of a Obama win-fall tax, Canada loves its oil companies
-Never again will you see a company so cheap with this kind of risk reward...it was artistically depressed by the temporary glut in mid-continent oil which brought the differential earlier this year to -21$ a barrel
As well managements guidance For second half of 2012 was for 90$ wit with a differential of 12 meaning they only expected to receive 78$ a barrel for oil vs. The 112$ we are getting today. Wit at 99 Edmonton par wit premium of 13.50$ That is a big deal especially when oil accounts for 70% of rev.
At current cap ex and prices we will be fc positive in q3 with 1 rig in evi, I suspect we will add back the second one and ramp up into 2013.....and if we sell off some ng acreage, then add more evi......look out ....this stock came public at the wrong time and forest shouldn't have dividended out the ownership....there is no short interest, no interest, completely unknown which is great for us in at these vast discounts. Time will reprice. The oil is flowing. Liquidity secure with over a 100 million available and that to will expand as banks use higher price decks
As a MBA Finance professional, I 100% agree with your analysis. $9/share is very reasonable. My analysis points to $3/share in the next 10 days (assuming we maintain positive momentum and institutions support).
Your analysis is a good one! Further if you look at current price of $1.78 and compare that to your target it has great potential. This is even better in that taking a 50% discount from target still gives a pps of at least $5 or 150% profit. Strong buy at this time!