2Q19 highlighted by negative FFO and covenant breach
Chinook reported 2Q19 financial and operational results that were largely in line, though can be summarized through the negative $1.7 mm in funds flow reported (CFPS -$0.01 vs. GMPFE -$0.01 vs. consensus $0.00). The corporation estimates total unbridled standing capability of ~4,000 boe/d, though current output is zero, as Chinook is further touched up by the Brookfield (Enbridge) McMahon plant outage, with 100% of its output offline since July 30th (to resume August 13th).
09 Aug 19
3Q18 results, CKE to play the waiting game ahead
Chinook reported 3Q18 financial and operating results which were mixed, with production of 4,807 boe/d eclipsing both GMPFE and consensus estimates by >6%, while CFO of ~$2.3 mm split GMPFE and consensus estimates of $2.4 mm and $2.2 mm, respectively.
12 Nov 18
Reports 2Q18 results
2Q18 was quiet for Chinook, with financial and operating results largely in line with consensus expectations. Volumes during the quarter were negatively impacted by maintenance issues on Enbridge’s Oak 16” gathering line, resulting in 3rd party capacity constraints. If not for this restriction, 2Q18 volumes are estimated to have been 20% higher (~5,300 boe/d), in line with GMPFE’s prior forecast of 5,025 boe/d.
10 Aug 18
Reports 4Q17 financial results
Chinook reported 4Q17 financial and operating results which were in line with both GMP FE and consensus expectations. Chinook commissioned the +25 mmcf/d expansion of its Birley/Umbach compressor station in 4Q17 bringing total capacity to 50 mmcf/d. Once 3 rd party restrictions ease in April 2018e, the company will finally have capacity to produce from all 13.0 (11.2 net) wells in the region. There are no further updates with regards to formal 2018e guidance at this juncture, as the company continues to defer formal guidance until commodity prices stabilize. Maintain $0.25/sh target price and reaffirm HOLD rating.
12 Mar 18
FLASH: Positive well results at Birley/Umbach
Recall, during 2Q17 Chinook was drilling 4 (3.63 net) wells at its Birley/Umbach NE BC property. In this update, Chinook announced that the drilling and completion costs per well were expected to approximate ~$4.24mm/well, slightly ahead of our type curve drilling and completion costs of $3.225mm/well.
14 Sep 17
Reports Second Quarter Results
Chinook announced second quarter financial and operating results that were in line with expectations. In light of the Company’s strategic alternatives process, we reiterate our Speculative Buy ranking and $0.50 per share target price on the stock though aim to provide a more fulsome review with potential changes to the sum of the parts components within our NAV methodology.
12 Aug 16
2Q16e Quarterly Preview
Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly reversed into summer, market likely to ignore financials for natural gas producers and look ahead to winter and formalization of sell-side 2018e estimates in coming months. Spot AECO natural gas prices recently crested C$2.60/mcf, and with a reasonable alignment of previously distressed NE BC Stn2 differentials, augmented by a withdrawal expected next week, view the market psyche as constructive and looking ahead, with the analogy that this market is shaping up to mirror 2012 still holding. That said, with crude oil poised to retest support levels, combined with strong stock price performance broadly observed YTD, we would characterize sentiment as slightly pessimistic in the near-term which could reduce or unwind momentum-based investment strategies that have worked thus far in 2016.
CKE AAV ARX BTE BNP CPG ERF POU PEY PGF PWT PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS NVA PPY PMT PNE RRX RMP SRX SGY TOG TET ATU GXE IKM LXE MQL PRQ SPE SKX TVE TVL YO ZAR
26 Jul 16
Chinook Energy Announces Further Divestitures, Consolidation to Montney Pure-Play
Chinook announced a divestiture of its non-Montney assets to Tournament Exploration for a ~70% shareholding in a recapitalized entity, the stock of which will eventually be dividended out to Chinook shareholders. Most importantly, this now isolates Chinook as a pure Montney levered growth vehicle, characterized by production of ~2,675 boe/d (19% oil & NGLs), 18.3 mmboe 2P of reserves, and 175 (122 net) sections of Montney prospective lands, coupled with the preservation of a strong balance sheet with ~$21 mm of cash and positive working capital post-deal.Directionally, we view this deal positively, though reiterate an unchanged 12-month target price of $0.50/sh.
14 Jun 16
ANNOUNCES STRATEGIC TRANSACTION TO CREATE A WELL CAPITALIZED MONTNEY FOCUSED GROWTH COMPANY
Impact: Positive. The transaction supports the broader corporate strategy of a Montney focused growth vehicle at Birley/Umbach and Gold Creek. We expect the Montney pure play entity ahead to look compelling in terms of resource leverage within an NAV-rich premise, though will not trade at a discount valuation over the next 18 months.
13 Jun 16
ANNOUNCES ASSET DISPOSITION AGREEMENT FOR CERTAIN GOLD CREEK AREA ASSETS
Impact: Neutral to slightly positive. We view the $7.5 mm transaction as not overly material, though a potential positive data point in terms of the current state of the broader A&D environment, which would be notionally positive given Chinooks near-term rationalization stratagem.
26 May 16
Intermediates, Mid Caps & Small Caps
With this publication we briefly summarize our projections for 1Q16e quarterly results for the Junior E&P (Intermediate, Mid & Small Cap) segments of our coverage universe
CKE AAV ARX BTE BNP CPG ERF POU PEY PGF PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX RMP SRX SGY TOG TET ATU GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR
26 Apr 16
Domestic E&P Statistical Package and FD&A Review
With this publication we highlight various metrics and statistics forthcoming from yearend reserve books for our Domestic E&P coverage universe (Integrateds, Large Cap, Oilsands, Intermediate, Mid Cap, and Small Cap). Similar charts for YE2014 reserves can be found in our Statistical Package dated April 7, 2015.
CKE AAV ARX BTE BNP CPG ERF POU PEY PGF PWT VII TXP VET WCP BNE CJ KEL LTS LRE NVA PPY PMT PNE RRX RMP SRX SGY TOG TET ATU BXO GXE IKM LXE MQL SKX TVE TVL YGR YO ZAR
12 Apr 16
Announces Year-End Results and Conservative 2016 Capital Program
Chinook released fourth quarter financial results that were in line with our forecast along with formal 2016e guidance lower than our priorities mates. Formal 2016e guidance includes a $22.5 mm capital program at midpoint that is anticipated to generate averages volumes of 5,750 boe/d at midpoint, with a midpoint exit rate of 7,400 boe/d. Our 2016e and 2017e forecasts are lower with production down 27% and 10%, respectively, reflecting a minimal and contingent capital program along with voluntarily shut-in production.
09 Mar 16
ANNOUNCES YEAR-END RESULTS AND CONSERVATIVE 2016 CAPITAL PROGRAM
Impact: Slightly negative. While our cash flow estimates will undoubtedly fall in light of the Company's formal guidance, the conservative capital program should more than offset lower cash flow, resulting in a further improvement to the balance sheet. All told, Chinook continues to battle a weak natural gas tape, that is compounded regionally at Station 2, with a strategy of timely and calculated capital spending in order to strengthen its balance sheet while continuing to prove up what is seemingly a strong asset at Birley/Umbach.
08 Mar 16
Chinook Energy Inc. (CKE) Announces Its December 31, 2015 Reserves and Provides Operations Update
Chinook posted modest reserve growth in the 1P and 2P categories while PDP reserve growth was lower on a per share basis due to dispositions throughout the year. Production for 4Q15e was lower due to voluntary shut-ins and coupled with a slightly delayed start-up of the expanded Birley compressor has resulted in a modest downward revision to our 1Q16e volumes estimate. Our updated preliminary NAV continues to support a modest growth story under current pricing assumptions, though is backed by one of the strongest balance sheets in the Company’s peer group.
10 Feb 16
CHINOOK ENERGY INC. (CKE) ANNOUNCES ITS DECEMBER 31, 2015 RESERVES AND PROVIDES OPERATIONS UPDATE
Impact: Slightly negative. Chinook posted 4Q15e production lower than our thinking along with a 2015 exit rate which is notionally negative to our 1Q16e estimates, but mostly a function of timing. Imminent commencement of production through the newly expanded Birley compressor should bring volumes in line with our estimates for the balance of the year.
09 Feb 16
Intermediate/Mid/Small Cap Commodity Price Update Impact
With this publication we highlight forecast revisions associated with our crude oil commodity price update. Concurrent within a dynamic time for E&Ps, some of which have already begun the process of 2016 capital budget downdrafts, revised estimates attempt to directionally capture a shift towards capital conservation, though severely weakened futures curves have influenced our thinking for the better part of 6 months anyway. We expect further capital investment reductions forthcoming from E&Ps in the coming weeks.
CKE AAV ARX BNP CPG ERF POU PEY SPE SGY TVE TOG TOU VET GXE KEL NVA PPY BTE PGF PSK PWT VII WCP BNE CJ CR DEE JOY LTS LRE PMT PNE RRX RMP SRX TET ATU BXO IKM LXE MQL RE SKX TVL YGR YO ZAR
08 Feb 16
CHINOOK ENERGY INC. (CKE) ANNOUNCES FIRST HALF 2016 CAPITAL PROGRAM AND AMENDED CREDIT FACILITY
Impact: Neutral to slightly negative as the announced $13 mm 1H16e capital budget will likely cause modest downward revisions to our 2016e estimates, though negative sentiment should be somewhat offset by the positive affect to the balance sheet and subsequent debt metrics. The Company also announced an amended credit facility of $50 mm, down from $75 mm previously.
18 Dec 15
New Commodity Price Outlook Impact
“Worse? How could they get any worse? Take a look around you, Ellen. We’re at the threshold of hell”. These are the words spoken by Clark Gris-wold in the holiday classic “Christmas Vacation”, and seem aptly suited for the general sentiment in the Canadian energy space at the moment as we roll out a summary of our regular forecast revisions extending from our most recent crude oil and natural gas price forecast update.
CKE AAV ARX BTE BNP ERF POU PEY PGF PSK PWT VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX RMP SRX SGY TOG TET ATU BXO GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR CPG
14 Dec 15
FirstEnergy - DAILY RESEARCH SUMMARY
BlackPearl Resources Inc. (PXX) Reports Third Quarter Results, Announces Onion Lake SAGD at 3,000 bbl/d and Growing - a Significant Positive | Chinook Energy Inc. (CKE) Third Quarter Results Highlighted by Realization of Strong Cost Reduction Initiatives, Birley/Umbach Facility Expansion on Track for 1Q16e Completion | Journey Energy Inc. (JOY) Reports Third Quarter Results, Guidance on Dividend and 2016 to be Provided in Early December | Kelt Exploration Ltd. (KEL) Reports Third Quarter Results, Provides 2016e Guidance | Long Run Exploration Ltd. (LRE) Announces Amendment to Proposed Private Placement, Initiation of Strategic Asset Rationalization | NuVista Energy Ltd. (NVA) Announces Third Quarter 2015 Financial and Operating Results and 2016 Budget Plans | Painted Pony Petroleum Ltd. (PPY) 2016e Production Targets Now Achievable on 25% Less Spending, 3Q15e Results Slightly Softer than Anticipated | Surge Energy Inc. (SGY) 3Q15 Results In Line, 50% Dividend Cut to Endure “Lower for Longer” Outlook | TORC Oil & Gas Ltd. (TOG) Provides Strong 3Q15 Financial Results, Revises 2015e Production Guidance Slightly Higher from Lower Capital Spending | Whitecap Resources Inc. (WCP) Reports 3Q15 Results In Line with Expectations, Provides Conservative 2016e Budget and Production Guidance | Total Energy Services Inc. (TOT) Reports Weaker Than Expected 3Q15
CKE JOY KEL LRE NVA PPY SGY TOG WCP TOT NPI
11 Nov 15
INTERMEDIATES, MID CAPS & SMALL CAPS - 3Q15e Quarterly Preview
With this publication we briefly summarize our projections for 3Q15e quarterly results for our Junior E&P (Intermediate, Mid & Small Cap) coverage universe. Within the backdrop of continued weakness in the commodity price complex that saw the retrenchment of crude oil pricing during the quarter, after what was a short lived rally during the second quarter, we are anticipating yet another lacklustre reporting period in the Junior E&P space, with the key themes coming out of the quarter likely to be centered on further reductions to capital programs, ongoing takeaway capacity constraints, potential dividend cuts, reduced bank lines from fall credit reviews, continued weakness in the Station 2 and CREC natural gas price markers, and for some, the rollout of formal 2016e budgets.
CKE AAV ARX BTE BNP CPG ERF POU PEY PGF PWT PSK VII TOU TET VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX RMP SRX SGY TOG ATU GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR
23 Oct 15
Birley/Umbach Development Continues on Track While Managing Production Levels During Pipeline Service Restrictions
Chinook announced that it completed 3 (2.75 net) previously drilled wells at its Birley/Umbach property citing that costs to drill, complete, equip, and tie-in the wells averaged $4.6 mm per well, or a ~40% reduction to 2014 costs. As a result of the cost savings, Chinook’s 2015e capital budget is being reduced to $49 mm from $55 mm. The Company has been shutting in any non-firm processing or transportation volumes in light of pipeline service restrictions and had 16.3 mmcf/d of production shut-in during November. As a result, Chinook has lowered its 2015e outlook to 5,700-5,900 boe/d from 6,600-7,000 boe/d.
19 Oct 15
INTERMEDIATES, MID CAPS & SMALL CAPS- Intermediates, Mid Caps & Small Caps: New Commodity Price Outlook Impact & 2017 Estimates Rollout
With this publication we are formally rolling out our 2017e forecasts for the Intermediate, Mid, and Small Cap groups, which accompanies our regularly scheduled crude oil and natural gas price forecast update. Less than a month removed from making major revisions to our crude oil price outlook in an interim update, this time around only minor changes to our commodity price outlook have been noted, leaving our initial glimpse into 2017e forecasts as the main takeaway in this publication.
CKE AAV ARX CPG PEY TOU WCP VET VET PPY RRX SRX SPE BTE BNP ERF PGF PSK VII BNE CR KEL NVA PNE RMP GXE LXE MQL RE
28 Sep 15
INTERMEDIATES, MID CAPS & SMALL CAPS - Crude Oil Downdraft, Though Remain Far More Constructive Than Current Forward Strip Would Suggest
With this publication we highlight forecast revisions stemming from an interim commodity price update centered around the crude oil pricing complex. Moves for crude oil weighted producers are significant, with 2016e cash flows down 12%-15%, and portended NAVs reduced sizably on the employment of a materially lower terminal value within the scope of the forecast period, though not reflective of the potential attrition in E&D capital investment and dividend policy should the current forward strip come to fruition in the cash market.
CKE AAV BTE BNP CPG ERF POU PEY PGF PSK PWT VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX RMP SRX SGY TOG TET GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR
31 Aug 15
Junior E&P 2Q15 Review
Within this publication we summarize changes to forward estimates coming off of the reporting of second quarter financial and operating results, highlighting equity price movements and a few valuation comparatives through to the end of 2016e.
CKE ARX BTE BNP CPG CR ERF LTS LRE POU PEY PGF PSK PWT VII TOU TET VET WCP AAV BNE DEE JOY KEL NVA PPY PMT RRX RMP SGY TOG CJ GXE IKM LXE MQL RE SPE PNE SRX SKX TVE TVL YGR YO
20 Aug 15
Chinook Announces Second Quarter 2015 Results and Expansion of 2015 Capital Program
Chinook reported second quarter financial and operating results that were well below forecast, with scheduled downtime exacerbated by takeaway restrictions not unlike other E&Ps reporting for this period. Retaining a very strong balance sheet, Chinook will accelerate the Birley/Umbach expansion (+26 mmcf/d) into 4Q15e after temporarily deferring it into mid-2016e, though an initial supply of 6 wells is unlikely to fill a combined 36 mmcf/d nameplate capacity.
12 Aug 15
INTERMEDIATES, MID CAPS & SMALL CAPS 2Q15e - Quarterly Preview
With this publication we briefly summarize our projections for 2Q15e quarterly results for our Junior E&P (Intermediate, Mid & Small Cap) coverage universe. In what could be viewed as the “Perfect Storm”, we are anticipating yet another weak reporting period in the Junior E&P space as continued deterioration of the commodity price complex will surely influence 2H15e capital investment plans, exacerbated by ongoing takeaway capacity constraints that have resulted in rolling shut-ins for many of the names that we cover, within the backdrop of an uncertain fiscal regime in Alberta in the interim. Typically the second quarter is already a relatively quiet period to begin with in terms of activity in the field due to the onset of spring breakup, though with most shuttering operations early in late February motivated in part to extract service cost deflation in a volatile pricing environment, activity specific to 2Q15e should be muted.
CKE ARX BTE BNP CPG CR ERF LTS LRE POU PEY PGF PWT VII TOU TET VET WCP AAV BNE DEE JOY KEL NVA PPY PMT RRX RMP SGY TOG CJ GXE IKM LXE MQL TOU PNE RE SPE SRX SKX TVE TVL YGR YO ZAR
23 Jul 15
CHINOOK ENERGY INC. (CKE) ANNOUNCES AMENDED CREDIT FACILITY
The borrowing base reduction should not be a surprise to the market and does not encumber the Company's $45 mm 2015e capital program. Chinook announced its amended credit facility which now has a borrowing base of $75 mm (down from $125 mm). The borrowing base reduction does not adversely affect the Company's $45 mm capital 2015e spending program as Chinook retains financial flexibility through its undrawn credit facility and ~$49 mm working capital surplus.
23 Jun 15
Chinook Announces First Quarter Results
Chinook reported first quarter financial and operating results that were in line to slightly below forecast, illustrative of lower cash generation though differentiated by a very strong positive working capital position in place that is clearly an asset in this market. There are no material changes to our 2015e or 2016e CFPS forecast. We continue to reflect a Birley/Umbach Montney-focused expansion in early to mid-2016e, by which time Chinook is portended to reverse a shrinking volume growth profile as it adds +26 mmcf/d of nameplate capacity to an existing 9 mmcf/d operation. The Company retains an exceptional balance sheet, exiting 1Q15 with ~$48.5 mm in positive working capital, the deployment of which in an accretive fashion could obviously accelerate the value premise.
12 May 15