Reserve numbers are important for some investors, the recent bank credit line and the eventual sale of the company (which is probably what the end game is). However, I think Mill is going to trade primarily based on pre-tax operating cash flow. Current production is around 4,700 boepd with netbacks around $75 which puts pretax operating cash flow at about 4,700 * $75 * 360 = 127 mil. Put a 4X multiple on that and it's around 500 mil in round numbers. If you take the market cap of Mill, add the debt and the preferred stock it a bit over 500 mil.
Mr. Market is primarily valuing the company at about 4X pre-tax operating cash flow. Increase production from 4,700 boepd to 6,000 boepd (probably by July) or perhaps 7,500 - 8,000 boepd (including Badami) by the end of the year and you'll see the stock price go up. The reserves only get updated about once a year and (while important) I view them as a lagging number.
Fracking wastewater is no more dangerous than other typical industrial stuff moving by barge. Wastewater in a barge moving at 10 mph is less likely to be spilled than wastewater moving in a truck at 65 mph. Getting trucks off the road and reducing truck diesel fuel usage is good for the environment. Barging approval should have been a "no brainer" that was approved quickly. The fact that it's taken years speaks to the far left wing zealots that Obummer has appointed. Same sealots that are against fracking (even if done responsibly) and against the Keystone pipeline.
The above is just the facts. If you voted for the D's, you should be aware of exactly what you are supporting. If you like driving a car, flying on an airplane or heating your home with oil or gas please consider where the fuel comes from. If you are really against all oil and gas, then frankly you really shouldn't own GRH. Go ride your bicycle over to your broker's office, sell your GRH and buy a solar power company.
Gran Tierra Sees Faster Peru Output on Permitting Changes
By Andrew Willis Jun 5, 2014 3:11 PM ET 0 Comments Email Print
Gran Tierra Energy Inc. (GTE) envisages a quicker production ramp-up at its Bretana oil discovery than previously planned as Peru speeds up permitting processes.
The company, based in Calgary, will produce 2,500 barrels a day at Bretana by the end of the year and hopes to bring forward a 2017 target of 6,000 barrels a day by one year, according to Chief Executive Officer Dana Coffield.
“It’s going ahead,” Coffield said in a telephone interview today, referring to the permitting reforms. “We’re seeing things get approved quickly.”
Peru’s push to achieve oil self-sufficiency by streamlining rules and boosting output should make it possible for Gran Tierra to accelerate a 2021 Bretana production target of 20,000 to 40,000 barrels a day by “a couple of years,” Coffield said.
Seems like anytime BPZ is down intraday, big buyers come in to close it flat. Bashers are really falling down on the job. What happened to that $3 top of the trading range Avi?
Seems to have broken out of your "channel". The boss is losing more money and cutting you down to a dime a post.
Yeah, almost makes the garbage from the old anonymous (street sweeper no doubt) "Acounter" look good. Shorts must be really disappointed that Mill traded higher - LOL.
Growth may be faster than 25% going forward if you factor out lost revenues from the non-profitable areas they shut down and just look at their core region. The correct metric however is enterprise value / sales which is about 2X. Enterprise value would include the preferred stock and some debt so it's higher than the market cap.
Sorry that the truth offends you. Would you really deny that a routine barging permit being held up for years doesn't have anything to do with left wing zealots running amok? Better wise up. Better yet go invest in a solar farm or offshore windmill project and lose all your money.
Yes, I've heard that Vetra may have tried to buy Suroco for cash at lower levels before their current bid. The Suroco holders didn't want to pay the tax. They want more financial strength to take advantage of opportunities and continued participation in the upside. I just voted my Suroco shares for Petroamerica. Suroco is a gem and I was lucky to find it and start picking it up a few days before the Petroamerica bid.
We have Gov Richardson on the Board, but I feel Obummer should be on the payroll as well. Lately it seems like he practically works for microcap oil companies like Mill.
- Failed mideast policies cause regional chaos and higher oil prices.
- Perceived weakness causes Russian aggression and threats of sanctions causing less investment in Russian oil.
- Block off competition from lower cost Canadaian oil by killing Keystone pipeline.
- Invest in high cost "green energy" that can't compete with oil and gas.
- Shut down coal and nuclear to increase demand for oil and gas.
- Limit drilling on federal lands to increase the value of leases on state and private lands for companies like mill.
- Pressure the majors to waste resources on "green energy" projects instead of focusing on drilling.
- Constantly degrade the dollar to ensure ever higher oil prices.
Thank you Mr.Obummer! Now if only I could find a way to profit off his failed health care policies.
Skimmed the article. Wasn't worth reading the whole thing. Saw a claim that the recent acquisition worsen accounting problems (or something like that). Had a good laugh and but in a couple of buy orders. Time for everyone front running the article to cover on the "news". They short before it gets released as "news" to the public. The game is getting really old.
Let's say the shorts pay someone at seeking alpha to write an article. Naturally they front run the article and short it. Hence the recent little selloff yesterday. Then the paying customers at Seeking Alpha Pro get it and short mill. Then a day or so alter SA releases the article to the public as "news". The public is supposed to panic and sell. Maybe a few day traders and newbies will. For the most part though, I think people are wising up. The shorts are looking to cover on the article which will create buying. The article itself was very shallow. The author thinks that the recent acquisitions were bad. That shows he is either on the payroll of the shorts or doesn't know squat. Picked up shares this morning. Didn't start trading yesterday.
Verado, you sure are working hard to shake loose shares. Covering already? I seem to recall you and your buddies predicting that Mill wouldn't close the bank credit line. I said that of course they would. I'll still be long when RU9 results come out. Despite all the big talk, I bet you'll have covered by that time. If not, we'll see how it goes.
There is some violence, drugs and corruption here in the US. Maybe I should sell all my US stocks. Your posts have nothing to do with BPZ. Maybe that's why your boss keeps losing money. Have you perhaps noticed that Iraq is imploding? That might have some relevance to oil stock prices.
I remember a winemaker used to have a slogan "we will sell no wine before it's time". I think Mill tends to sit on results to ensure that they have a stabilized rate rather than releasing IP rates quickly as many companies do. Anyway, as a trader I buy "dull" and sell "excitement".
I've got to say that Obummer should be called the "oil stock president". His failed foreign policies help cause chaos in the mid-east. He does his best to shut off cheap competing oil from Canada and limit production on federal lands. His weak policies embolden Russia and he threatens sanctions. He runs huge deficits weakening the dollar which raises the price of oil. He limits investment by the majors by threatening them with new taxes and pressuring them to invest in "green" energy. He raises natural gas prices by shutting down coal. For oil companies like Mill (Alaska state lands, making them beyond Obummer's reach), this is all good. Not so great for consumers though.
I plugged Sam's numbers into Excel and that works out to about a 2% annual decline rate which would be exceptionally good. Perhaps not a true decline rate though if they added zones though. Good illustration though of what is likely to happen. Existing wells will decline (probably by around 20% annually except to the extent they are reworked), Mill will be investing in new wells and to rework existing wells and overall production is likely to increase with some fresh capital from mill coming in.
As Sam pointed out, Mill claimed a 20% decline rate for Badami in their press release which would be a fairly typical and reasonable number for most wells. I plugged Verado's Badami numbers into Excel and came up with a 19% decline rate. Slightly better than claimed by Mill. Great research for the longs Verado - LMFAO. Nice of you to fact check management and prove that the press release claim was actually slightly conservative.