Four Rivers asset held on the books at a PV10 ( DCF minus 10% )...

Four Rivers asset held on the books at a PV10 ( DCF minus 10% ) of $5mil. So you have;


Four Rivers = $5 mm ( million )
Cash = $9.5 mm ( million )
Capitola = $0 (solely because it has not been given a valuation by the market or PYM as yet)
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NPV = 14.5 mm.
Mkt Cap = 7.3 mm.

So, this company ( they are not a lone here ) are trading a steep discount with absolutely no value being given to Capitola. Why is this? Market forces , oil price, overhanging stock .....list goes on. Well completion over next 4 weeks. I still like it. I am extremely excited about the Cline potential...still. Multi stacked pay , low risk play. I like.

While I am more on the technical side than the market synopsis side I noted a few interesting things. PYM has 10,000 acres approx. they are drilling on a third for a quarter basis ( that is pay for 100% of costs and get 75% of net revenue ) very standard practice across the industry in the US. they have rights to all depths.
WEL ( Winchester ), a company I'm also keeping a close eye on which I also like ( big fan of Perter Allchurch ). WEL have 4,700 odd acres odd about 19 km south west of PYM'S acreage. They have effectively two wells in completion phase. they focused purely on the Ellenburger formation and have just paid $1mm ( million) to gain a 50% WI ( I note that they didn't mention their NRI ? ) . Given a vertical well to the Ellenburger should cost no more than $1 mil I'm assuming that WEL is farming in on a 2 for 1. That is, pay 100% of costs and get 50% WI and less Net Revenue Interest ( NRI ). Now, this may be well worth it given the well has been logged and in completion phase. they may be paying for the low risk nature of the well.
Still, all this aside, here you have two companies, not 20 km apart, one with $17 mil in the bank and the other with $9.5 mil in the bank. PYM with over 2 x the acreage of WEL. PYM with strong shows in the Ellenburger ( WEL's specialty ). and PYM trading a 50% discount to Net Asset Backing/NPV. If I were WEL I know what I'd be thinking ( though they are a very technical bunch of fellows they may not ). Its just an interesting observation. Would not like to see PYM taken our right now but I'm wondering what its neighbors and WEL are thinking when they look at. As I say, Im now market guy.......Ill add to this DYOR.