Thanks guys. Appreciate the kind words. Always enjoy the numbers with you @tt2000. Keeps us both on our toes. It's good to have a discussion without an "alpha" personality banging away.
Might loss was small enough to be acceptable given the initial risk reward. Had the opportunity to exit without loss but got greedy and that serves me right because I knew that the redomicile was NEVER going to be a good thing for an ASX shareholder. Been though it before and it is tracked pretty much the way I said it would ... said it here, said it to Mike Hannell's and Damien Hannes' faces at the redomicile meeting and the dumb money in the room.
Yeah COVID-19 was the straw that broke the back of the over leveraged shaler. But the weakest fell the fastest and the furthest. YTD SNDE is down 84% and CPE is down 69% and PVAC is down 63%.
As far as the ASX went, SEA was a "better choice" for a USA shale play than the others. In the USA markets, I going to call it what is really is. A "bottom of the barrel choice" and there are many better choices ... still may end up in the same spot though.
I think the CVX acquisition of NBL is a sign of things to come. The all stock cherry pick acquisition by the strong of the weaker. There are simply too many independents without scale. I can't see to much cash being through around. Scrip yes and the assumption of debt (but that will be interesting to see). Wholeheartedly agree that PDP is the gold now.
So I can't see SNDE or LONE remaining. The equity value is insignificant compared to the debt.
The big question is who combines with who and on what terms. Many thing possible in the Permian so I'll leave that out and add one only because I happen to own it. @tt2000 some pairs to talk about (I hold DVN)
DVN ~$4.16B MC and EV = $7.31B & EV/EBITDA(TTM) = 2.51x 1P 746MmBoe (34% oil). Overall PDP/1P = 77% XEC ~$2.64B MC and EV = $4.87B & EV/EBITDA(TTM) = 2.93X; 1P PDP = 532MmBoe (26% oil) 68% in Permian + 88MmBoe PUD 92% Permian. Overall PDP/1P = 86%
IMO these 2 make a good combination. Both have significant % PDP and are easily FCF on reduced budgets and both have plenty of liquid and no debt repayments until 2024 (XEC) and 2025 (DVN).
Now CPE could also fit into that entity because of its Permian focused and EFS cashflow ... would be a bit like a bolt on acquisition but need to look at acreage synergy.
MRO ~$4.55B MC and EV = $9.43B & EV/EBITDA(TTM) = 2.97x 1P 1,202MmBoe (46% oil). Overall PDP/1P = 60% & 13% is international. MRO is not Permian focused CPE ~$0.51B MC and EV = $3.82B and EV/EBITDA(TTM) = 4.54X 1P 540MmBoe (66% oil). Overall PDP/1P = 43%. CPE is Permian focused
The total leverage here would be a little concerning ... IF MRO wanted to be a EFS consolidator it could swallow PVAC, SNDE, LONE because of potential acreage synergy
PVAC ~$0.17B MC and EV = $0.72B & EV/EBITDA(TTM) = 1.45x 1P 133MmBoe (74% oil). Overall PDP/1P = 58%. PVAC is EFS focused SNDE ~$0.02 MC and EV = $0.4B & EV/EBITDA(TTM) = 1.89x 1P 101MmBoe (63% oil). Overall PDP/1P = 24%. SNDE is EFS focused LONE ~$0.012 MC and EV = $0.534B & EV/EBITDA(TTM) = 2.29x 1P 101MmBoe (50% oil). Overall PDP/1P = 33%. LONE is EFS focused
The picture isn't accurate due to hedging ... which would be monetized in any combination ... raises some cash. It is eye opening on the PDP/1P metric.
SEA Price at posting:
16.5¢ Sentiment: None Disclosure: Not Held
