Penn West Energy Trust (PWE)

[LoveItInBishop]

A nice piece on the yahoo board.

From stock house..good analysis and pretty darn close...

Per the call, PWE will improve by $3 BOE on operating and $5 per BOE on financing versus last qtr, a combined $12 per BOE versus guidance and a combined $18 per BOE versus 2015....(financing, operating, G&A, Royalties, and transportation)...this translates to crazy low BE...
Basically, going forward, all in cost (royalties, transportation, operating, G&A and finance will be $16-$17 per BOE or less...so the poster is right..even at $25 dollar oil, PWE is making $7-9 netback's...
(The poster cited below has $9 dollars in savings per BOE but the actual is $5 per BOE..At 50 WTI, PWE will have $34 in netback's going forward...$60WTI, PWE as $44 in netback's going forward...)..still think this is $1.3 stock?

"Alternative method to estimate revised netbacks
So, we have 63,000 boepd as the original guidance for 2016.

Average netbacks were estimated to be $17 to $18 per boe

Of this, 20,000 boepd had zero or negative netbacks.

By iteration, it can be calculated that removing these 20,000 boepd, average netbacks for the remaining 43,000 boepd were $27 per boe.

To this, you can add the $9 per boepd gained from interest rate reductions.

By this method, netbacks for the residual retained production of 30,000 boepd for 2016 would be above $30 per boe.

Conclusion

PWT will dispose of at least 20,000 boepd of zero netback production and also gain $9 per boe in reduced interest costs due to debt reduction.

THAT IS......AND SUPPPORTING MANAGEMENTS ASSERTION.....PWT WILL BE A VERY LOW COST PRODUCER CAPABLE OF BEING PROFITABLE AT OIL PRICE OF WTI $25 PER BOE AND PERHAPS LOWER Less