PetroBakken Energy Update – Sale of Assets- Forecasts

PetroBakken Energy
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PetroBakken Energy* (PBN : TSX : $17.01)

March 19

Shares of PetroBakken continued to perform well after the company announced that it closed its previously announced sale of certain non-core southeast Saskatchewan assets for gross cash proceeds of $427 million. The non-core assets were outside the key focus area of its Bakken business unit as they were largely non-operated and generally have lower average working interest than the company’s remaining lands.

Following the closing of this transaction, PBN will have approximately $1.1 billion of available liquidity from diversified sources of credit that have a layered maturity profile that compliments the long term nature of the company light-oil focused assets.

Recently the company reported Q4/11 results that beat the street; production of 48,007 BOE/dwhile CFPS, f.d. of $1.13 beat  the Street’s $1.08 estimate.

Mid-February production is quoted at over 49,000 BOE/d (prior to the 2,900 BOE/d Bakken disposition)  (December averaged 50,250 BOE/d).

Of note in the release was the fact that both the Bakken and SE Saskatchewan Conventional Business units were free cash flow generators in 2011 (at +$130 million and +$40 million). Given the sale proceeds and its now robust available credit (~$1 billion), the company is accelerating in the Cardium, adding $175 million to the forecast budget.

Exit Guidance

PBN has also increased exit guidance to 52,000-56,000 BOE/d from the prior 50,000-54,000 BOE/d range.

They are quoting the finding of oil in the Nordegg, Montney and Duvernay, and will be drilling the Swan Hills in H2/12, no other details were provided on this new activity.

Since the end of Q4/11 the company has drilled 48 (33 net) wells, completed 55 (44 net) wells and brought 28 (19 net) wells on production. They have 13 rigs running, with six in SE Saskatchewan and five in the Cardium.

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