Hi SD, A very positive spin.
Have you read Renaissance Energy's 2nd quarter report? They just acquired Pinnacle for $600 million (paid for in Renaissance shares).
Recent numbers for Pinnacle are as follows:
gas reserves (billion cf): 455 proven and 105 probable
oil reserves (million barrels): 119 p + p
gas production (mmcf/d): 123
oil production (barrels/d): 29,178
Pinnacle's gas production and reserves are about 1/3 of total oil and gas from a BOE perspective. Not counting assetts, etc., the gas portion of the sale could be estimated at $300 million since gas is more valuable than oil in this market.
Now let's compare to ANV:
gas reserves (Bcf): ? proven + 120 probable
oil reserves: undetermined
gas production: 0 (100 mmcf/d probable)
oil production: 0
Industry typically discounts probable reserves by 50%, therefore for comparison purposes:
Pinnacle gas reserves: 510 Bcf (proven + 50% probable)
ANV: 60 Bcf (proven + 50% probable)
Based on the above, I would estimate ANV's gas field to be worth about 25% (ie., $75 million) of Pinnacle's since ANV has lower proven and probable reserves and slightly lower production (potential). I consider the US$ premium (ie., 1$ US = $1.55 Cdn) and ANV's interst (ie., ANV gets between 50 and 60% after drilling and completion cost recovery) a saw-off.
This gives ANV a share value of $3.75 (based on 20 million shares).
Of course, I have not considered long term debt (which ANV doesn't have), other assets besides oil and gas, and many other factors.
Still not bad for ANV though, but not what some of us are anticipating. Maybe Renaissance got a great deal, or maybe I have missed something. |
