Crossy,
Thanks. Bakken in Canada is a little different than in Montana, so people are wondering if it will be as big but Swagor said to me that if it wasn't the way RLI is calculated, he could ramp from 1400-3500 bpd in 1 yr, but RLI wouldn't grow properly because the Bakken play is horizontal wells. As a result, you get this play where the reserve is there, you don't get paid for it (yet) drilling gets done inefficiently to satisfy one side of the market (RLI) which -in his mind-dominated production, because the well declines on the lower RLI horizontal wells aren't as bankable. OK, I'm not an engineer but I believe that is the jist of Bakken in Canada vs Montana (One is Dolomite, one is sandstone), so horizontal wells and low RLIs. You can't argue with the BISa netback (Sask appears to have lower costs than AB)
theglobeandmail.com
Adding your AEI.V, then there are also TUI.TO (lots of CUX CGs going into that one, management is gold standard IMO at TUI), WE.A and WE.B which seems to have a mapping technology (and this may be valuable in Sask). BISa has low vols (Swagor doesn't want to dilute, so the institutions don't get excited, hence the IB analysts don't cover it. In this case I think it is akin to cutting off your nose to spite your face).
WE.A and WE.B just listed but these are clearly Bakken wells:
ir.gov.sk.ca
Waveform spudded its first well on Jan. 6, 2005, in southeast Saskatchewan in Waveform's Torquay-Tableland play. The well is a horizontal test into the Bakken formation and drilling is expected to be completed by the first week of February, 2005.
On AEI, I read your post about TUI's CEO joining AEI and the low debt, but I'm wondering if Bakken is going to be horizontal wells and you can't book the RLI, damn the torpedoes, raise debt, drill the heck out of it, the production covers you, and RLI or not, you live to see another day. I'm not sure I agree with the BISa way which is play both sides at the same time (RLI and production) possibly missing the brass ring on both but having middling to fair performance. If AEI is going a similar route will we get the rampup? I look at AEI and I think to myself "and I thought BISa was illiquid".
I like AEI now, and TUI. BISa is a hold. I don't understand WE.A's (Waveform) technology enough to evaluate.
Cheers,
David |
