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you need to have a look at the value of the oil business without...

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monark

7,877 Posts.

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14/12/22

13:07

Post #: 65308395
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Originally posted by James7821: ↑

A deal might not be too far away now. I'd value it at 50% of its potential deal value so if it's say worth $150m, that's $75m fair market value pre deal.

I would write the oil business off as worthless right now at this oil price and WCS discount. It's bordering an obligation. An optimistic view would be to value it at its diminishing forward cash flows assuming no reinvestment less make good provisions. That's the optimistic view because it requires management make no stupid decisions, which is highly unlikely. They keep piling into these wells which are expensive, not very productive and fast declining. ($30m+ a year for what....1000boepd?).

That would leave a market value of about $75m for CE1, which is kind of where it is sitting now.

Not a great long term investment if they are selling the family silver. Could be worth a punt short term. I might put on a bit for the deal potential, I just haven't decided yet. Sentiment moved to none from sell.

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you need to have a look at the value of the oil business without growth in production - worth more than market cap and at much lower oil prices. add Montney to that.

CE1 Price at posting: 12.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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