(EEE) Malcolm, hello,
From the Yahooligan board:
"As of 12/31/99 EEE reported net proved reserves of 487 bcfe. Waterton had 165 bcfe and Caroline had 89 bcfe for a combined 52% of EEE's net proved reserves. So EEE sold these proven reserves for $0.69C/mcfe. The price seems very cheap.
In addition, Waterton and Caroline were shown to contain another 71 bcfe of "probable reserves". (All of above reserve numbers as of 12/31/99.)
Both of these fields were known to have technical problems and the Caroline reserves are sour gas with limited marketablity.
Good news is that after the transaction closes EEE will pay off a large portion of it's debt.
What's left: EEE retains the Olds area (214 bcfe of P+P reserves), Strachan area (which contains the recent exploration success at Swan Hills), and Three Hills area which is a sweet gas, low operating cost, highly profitable property.
EEE also retains 460,000 net acres of undeveloped leasehold in the Alberta foothills. They are currently drilling in this area. They also retain the JV with KMG offshore Nova
Scotia."
The gas may be sour, but it's a sweet deal indeed for Hunt in my opinion - a hedged purchase, so to speak.
If the rest of EEE is sold off piecemeal, my guess is that we're a tree in for a pickin'.
I bought in to EEE at around $1.62 about a year ago. I still think that it has the potential to pop $3.50 US, but not if it's handled this way.
Nova Scotia is the plum here. The "undeveloped acreage" will be suitable for weekend walks, but nothing in the way of revenues will occur in a realistic timeframe (my opinion, not fully informed). Nova Scotia is attractive for its proximity to hungry US east coast demand and a respectable array of operators.
Can anybody put their finger on why the price tanked to this degree on the news? Was everybody expecting a clean high-dollar sell? Just wondering what the consensus is.
Thanks and regards to all,
Aggie |
