Hi @cmonaussie Spot on regarding hedging. Only 20% of production...

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tt2000

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05/06/20

19:26

Post #: 45068520
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Originally posted by cmonaussie ↑

Breakthrough AND hold above $45 IMO.

So the next question (assuming satisfaction debt negotiation) becomes at what oil price level is SNDE going to bring back any curtailed production AND resume completions and hedging and new drilling to regain the required production growth trajectory to remain cash flow positive such that the 2L can be repaid (or demonstrate that we can repay it when due).

Would you like some "homework" ... have a look at the 3 month performance of PVAC, MRO and SNDE.

You really have to admire the chart of PVAC. From the depths of despair for all E&P of Mar 18/19 it has really fought back and had some impressive gains of late. They have overcome the debt concerns of early March. Gamblers would have been big winners.

And MRO, steady as she goes. Never hit those same depths of despair and now both are down about the same for the last 3 months at -26%. Both are still heathy losses YTD (-57% for MRO and -67% for PVAC and a whopping -87% for SNDE). Trouble is SNDE has yet to participate in the recovery ... why is that?

IMO MRO is a superior company to PVAC ... but PVAC is 100% shale pureplay ... also highly hedged (as we are). From memory, and this may be incorrect, MRO hasn't go much in the way of hedging so will likely participate more if a strong price recovery occurs. It looks particularly undervalued wrt to "peers"

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Hi @cmonaussie

Spot on regarding hedging.

Only 20% of production is hedged, and even that runs out end of 2020.

PV10 of $7,863 v debt of $5,500
1,205 reserves (720 PDR)
PV10 of $6.25 per reserve
810m shares = $5bn equity + $5.5bn debt = $10.5bn
Or $8.70 / reserve or $14.8 /PD reserve

Market giving it an EV of $10.5bn ? Which is more than the PV10 value? Any idea what I'm missing here? That seems bizarre....

Our PV10 is $675 for 100 reserves (25 PD)
EV is $380M
$3.80 / reserve or $15.20/ PD reserve

I am baffled at how MRO are above their PV10 (but only looked at annual report, so will have missed any corp activity post this date).

It's Friday, and I want to cheat - @cmonaussie, I know you know. Do you mind sharing please

MRO

SEA Price at posting: 16.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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