This is looking sensational.
These acquisitions will transform the company in to a player in the oil & gas scene with 750boe/day of production after the additional cap-ex spend of only $1.8m.
I haven't seen such an attractive deal in a very long time. Its attractive for the following reasons:
- High level of leverage re: Bank Debt - non-dilutionary funding
- CY 2019 EBITDA of US$12m (A$16m) which is almost twice the level of the current equity value!
- Company will have independently certified reserve reports with a P10 value of US$55m (A$73m) which is almost 10 times the current value of the equity
These EBITDA numbers are also on a conservative oil price of US$70/bbl & they intend to hedge 75% of production at such level.
There was a very bullish piece on * which essentially says they're building a "takeover target" given their plan for further bolt-on acquisitions and support from their lender.
https://unauthorised investment adv...patriot-becomes-major-player-with-us20m-deal/
This is such a low risk onshore conventional oil & gas play with seemingly very low costs of production.
It is also clear that there aren't many eyes on this stock at this point in time, so therein provides the opportunity to strike while the interest is low. However, given the significant media coverage this received overnight, I dare say this will change & change quickly.
We have all seen how parabolic oil & gas stories can become when all of a sudden people focus their attention on a story - CVN & GLL are perfect recent examples of this.
I am expecting a nice protracted period of SP gains over the coming days/weeks & months for this stock which has truly undergone a transformational acquisition which puts it firmly on the map as a medium tier conventional onshore oil & gas producer.
I would be keen to hear the opinion of other O&G guru's like
@Ya &
@MichaelSA on this one.
Then of course, I welcome the charting expertise of
@h00ts &
@Saragian to provide some TA insight in to what looked like a breakaway gap yesterday given the acquisition.
