Board of directors are not interested in creating long term value for shareholders.
Just sold an asset that costs the company nothing to own. They had a free carry on every single well drilled.
On 80 acre spacing, that meant @ 110 wells in total.
Each well achieves payout in 12-18 months after this Antares got its 6.25% WI (other than the 1st well 4.25% WI)
That translated into @ 5-7.5 bopd per well plus some natural gas and NGL. Another 15 wells wee due to reach payout this year alone.
So net production would have been @ 100 bopd plus the rich gas and NGL.
Field would be producing for the next 40 years and there was additional potential upside in a lower shale formation.
Production decline would have been low from here on in, production from the whole lease would have peaked around 450 bopd I'd say.
Revenue to Antares over time - multiples of the sale price, with no capital outlay required whatsoever.
$10's of millions of shareholder value gone for what?
To try to save the directors jobs.
Pay the bonuses, inflated salary's and all the other perks, they shouldn't be getting for destroying so much shareholder value.
Yes, I'm sure they'll be some tax to pay on the sale profit.
Wells @ NS according to Antares are @ $2.25M each using the Cozart mixture, so enough to fund 3 more wells and pay for the Debnam frac at best. Most likely 2 new wells and Debnam, plus the salary of a new COO, they must have found one in the last 3 months+
Time the men and women in grey suits made there visit to the boardroom and sorted this lot out. Brought in people who have the right skills to run the company properly and start to create shareholder value once more.
A sad day for existing shareholders.
LOTM
AZZ Price at posting:
39.5¢ Sentiment: None Disclosure: Held
