Hannam Valuation Places CE1 at 82c Currently

Valuation puts CE1 at BASE case at 82c

Good morning everyone.

Hannam Partners did an amazing 67 page evaluation on CE1 of May 2021 which gave in-depth detail of where the current evaluation should sit based on the Brent Oil price (which is currently $75) and Henry Hub Gas Price (which is currently $5.29)

The below report is pre console at 20:1 so when looking at it please see the following:

3.30 = 66c

3.7c = 74c

4c = 80c

4.1c = 82c

4.5c = 90c

5c = $1

5.5c = $1.10

We will base this around their median 10% discount rate as to be fair for the pointy end of the valued share price as not to become pumpy and be fair to their median base case valuation.

As you can see in the below report that there is no base case for natural gas at $5 plus so added an extra two columns at their base case with 10% discount.

See the first chart based on Brent Oil

So looking at the median price of 3.3 (66c) at $70 Brent oil and 4.1 (82c) $75 Brent oil we can create an average price between the two of 3.7 (74c).

So we now have a base case for crude but that’s before we have a key asset breakdown as illustrated in the graph at the very bottom of the picture which is priced at 3.7 (74c) based on $70 Brent oil and 4.5 (90c) based on $80 crude.

So knowing that Brent oil is currently $75 a barrel a fair average between the two would place the overall asset value at its CURRENT evaluation at an average price between the two at 4.1c (82c)

Noting that this report placed gas prices at a high of $4 not $5.29 where the current Henry hub gas prices sit then add in the Montney asset valued at base case $96 million by analysts and up to $196 million fully exploited we could have an asset that could add value way above the current averaged evaluation of 4.1c (82c) and more likely to be in excess of 5.5 ($1.10)

So if we look at a current valuation (including a 10% discount) of the company where as it sits right now we are looking at 4.1 (82c share price)

How it’s trading at 22c is beyond me. When it should be trading 400% up from current levels.

The analysts have it right as do Credit Suisse who are loading up.

When will the market catch on?