It's been a long time since someone has posted on this board. Back in 2008, KFG was just getting started on the Fayette field. Well 6 years later and a couple dozen wells later, KFG has made some amazing progress. The company is now running all operations on cash flow and has more than enough funding to keep going. Books are immaculate with no debt whatsoever and the company is able to do almost a dozen wells a year without any dilution. If Denbury was interested in us before, now I think they will want KFG for sure. All wells are broken down below and updates can be found on the KFG website. As per the most recent quarterly report and news releases:
50.6 million shares outstanding with around 10% insider holdings
June 12 2014 - Macneil 2 & 3 - 60 - 70bopd @ 21.5% = 13 - 15bopd
June 12 2014 - Parker 1,2,3,4 - 130bopd @ 10% = 13bopd
June 12 2014 - Craig 1 & 2 - 120bopd @ 21.5% = 26bopd
April 1 2014(MD&A) - 9 Fayette wells - 120 - 130bopd @ 75% = 90 - 98bopd
April 1 2014(MD&A) - Dale well - Put back on end of Q3, production unknown
April 1 2014(website) - Roundtree - 15bopd @ 12.5% = 2bopd (29% at payout 2015)
April 1 2014(website) - Miller 1 - 15bopd @ 4% = 1bopd(18% at payout)
Wells Being worked on:
Hannah - Still to be completed
Parker 5 - Needs to be cased, could be re-worked like parker 2
Mantua - New area, going to be drilled soon
Craig 3 - Going to be drilled soon
Franklin - To be announced and drill soon
For this calculation I am taking the low ranges on the production numbers and cannot include the Dale lease well because we won't know production from that site until Q4 results are released end of August. Either way, lots of production from 20 wells which will increase our reserves quite a bit. Information can be found in the Q3 MD&A and 2014 news releases.
Macneil(13) + Parker(13) + Craig(26) + Fayette(90) + Roundtree(2) + Miller(1) = 145bopd(low end)
145bopd X $100 barrel(brent pricing) X 90 days = $1,305,000 a quarter in revenue. This is the revenue using the lowest production numbers, lower oil prices, and not considering the CDN/US currency exchange. Then to top it off, KFG is the operator of these wells since one of the directors owns a drill rig and we get between $120,000 - $150,000 in revenue per quarter from management fees.
Calculated Quarterly revenue - $1.4 to 1.5 million going forward.
Net profit margins from past quarters vary, but prior to Q3 and the accrued income KFG didn't count, they earned $242,000 net in Q1/Q2 on $1.35 million revenue.
I also believe that KFG will have more than double their reserves from last year (122,500Mbbl) which was worth $6,125,000 based on $50 a barrel in value from their 51-101 report.
AI
