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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (56566)	1/4/2016 1:14:17 PM
From: E_K_S	Read Replies (1) of 79150

The previous value was from memory so I may be way off. It looks like $150mln is more of a fair value based on this sale in 2014. $48.7mln for 75% and JV partner pays operating/developmental costs of new wells. In the last two years, this division was losing money so best to just get it off the books. This way they get needed cash and maybe some future production revenue streams. Northcote Energy have the AMI (Area of Mutual Interest) in place for the Wilcox, 960 acres with a Working Interest – 17.5% & Net Revenue Interest – 13.125%, Indigo Minerals are the operator of the deeper Wilcox zones and they purchased EP Energy’s Louisiana portfolio for $150 million (7.5x EBITDA) in 2014). This is a good value pre-price down for a large portfolio, but it shows the kind of enterprise value that can be created for sale in the next up-cycle once oil prices turn. SFY has assets in both the South and Central Louisiana so I think their sale was just for their Central Louisiana properties From a 2009 report: Approximately 49% of Swift Energy's 2008 reserves and 61% of its 2008 production are located in its South Louisiana and Southeast Louisiana core areas.[2] These areas are vulnerable to hurricanes during the Atlantic hurricane season, which runs from June 1 to November 30.[17] Increased hurricane activity between 2005 and 2008 resulted in lower production and physical damage to Swift Energy's operations. For example, a significant percentage of the company's production was shut down by Hurricanes Katrina and Rita in 2005, and by Hurricanes Gustav and Ike in 2008. -------------------------------------------------------------- They have big land holdings and recent investments in Eagle Ford. Hope they get the new equity ratios approved and trading. The common shares seemed to like the proposed deal at they were +30% earlier in the AM. Bonds were trading higher too. EKS

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