Author: Petros

An Historical Primer for the War of 1812

Posted by

0

A reader at the Isaac Brock Society (cross posted) submitted the following video (an historical primer on the War of 1812).  Her feelings of warmth towards the United States are at all all time high (not).  If you are from the Department of Homeland Security, there is a special note at the bottom of this post, just for you.

*To DHS:  This video is historical and while it expresses the feelings rivalry of your neighbors to the North (we know you can’t take a joke and have no sense of humour), this does not mean that we are at open war with the United States. However, your recent attempts to shake down Canadian residents IS an act of war.  Do not tread on me!

Allen Stanford lesson: the government doesn’t like competition

Posted by

0

Allen Standford has been found guilty of running of ponzi scheme in which he bilked seven billions of dollars from his clients.

The United States government, his accuser and prosecutor, is running a multi-trillion dollar ponzi scheme called Social Security.  Who will try the guilty for that fraud?

The problem with United States justice?  Lawbreakers make the rules.  And there are a lot of rules.  So many in fact, that almost everything is illegal.  This video tells the story of man who went to federal jail for importing lobster.  Meanwhile the banksters and the politicians have their connections and their stay-out of jail free cards (think, Jon Corzine).

Buffet Bugs

Posted by

0

What do you call people who follow Warren Buffet sycophantically?  They call people who think it’s a good idea to invest a portion of one’s portfolio in gold, “gold bugs”.  So perhaps we should call them “Buffet Bugs”.    Isn’t that grown-up of me?

What does Petrobakken’s sale of 7% of their Bakken business unit imply about the value of the remaining Bakken lands?

Posted by

5

See also:
What does the sale of Daylight Energy tell us about the value of Petrobakken?
What does the sale of Brigham Exploration tells us about the value of Petrobakken?
Reflexions on Petrobakken (Updated)

Petrobakken has sold 7% of their Bakken business unit to Crescent Point for $427 million.  Their press release says:

The Bakken Business Unit will continue to represent a significant portion of our corporate asset base as this sale represents only 7% of the Business Unit’s land holdings and approximately 12% of its production. Assuming successful completion of this Transaction, our average working interest in our remaining Bakken Business Unit lands will increase from 82% to 86% and we will continue to have over 700 net drilling locations in the Business Unit, representing approximately 10 years of drilling inventory.

In the past two years, Crescent Point has received market love. Its managers are hailed as brilliant and it is consistently able to raise money in the form of new issues.  Petrobakken and Petrobank, however, have struggled to get the same kind of love.  As a result, Petrobakken/Petrobank has been the better deal for value investors–whereas there seems to be a premium on the shares of CPG compared to industry peers, Petrobakken is still selling at a deep discount to value.

The implied value of Petrobakken’s Bakken Unit

If 7% of the Bakken Business Unit sells for $427 million, the implied value of the remaining unit is:  $5.673 billion (427 = .07b; b=6,100 whole bakken unit; remaining Bakken = 6,100-427= 5,673).   Petrobakken’s total market capital is currently $2.5 billion.  This means that the current market price of Petrobakken sells at a 50% discount to the Bakken business unit alone.  Don’t take my word for it.  Take the value that the industry’s smartest managers, Crescent Point, have just given to the 7% that they bought.  Crescent Point has just done a great favor to Petrobakken by showing that its stock is worth closer to $30 per share (not counting remaining debt and the value of its other holdings, including its Cardium, which I would argue is much more than zero dollars per share).

Disclosure:  I am long PBN, PBG and CPG.