EPG Members are invited to attend this luncheon in Dallas. Register with goalcapitalllc@gmail.com
Wednesday, November 29th, 2023
Lunch: 12 Noon
Ocean Prime
2101 Cedar Springs Road
Dallas, TX 75201
Presenter: CEO Doug Bartole
Dallas Luncheon hosted by InPlay Oil on Nov 29
Dallas Luncheon hosted by InPlay Oil on Nov 29
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Dallas Luncheon hosted by InPlay Oil on Nov 29
Eight EPG members attended the small group luncheon hosted by InPlay Oil in Houston today. The combined ownership of InPlay stock was over 400,000 shares and all of us have held the stock for several years.
> The CEO, Doug Bartole gave an update on where InPlay is today and his outlook for 2024 and 2025.
> Q2 shut-ins due to the wildfires in Western Canada all came back online by mid-Q3 with no damage to the wells.
> 3rd party gas processing facilities that contributed to lower than expected production in Q3 have all been resolved.
> Q4 production should be up more than 800 Boepd quarter-over-quarter with most of the production being crude oil that sold for more than $100Cdn per barrel. Full year production will be near the low end of InPlay's full year guidance of 9,100 to 9,500 Boepd.
> 2023 exit rate s/b ~10,000 Boepd (~45% crude oil and ~15% NGLs)
> Balance Sheet is now in great shape with only bank debt of $40.8Cdn million draw on their $110Cdn million revolver.
> Free cash flow in Q4 (~$10Cdn million) should push Net Debt/EBITDA down to ~0.2X, which is super low for a Canadian Junior.
> IPO.TO trading at $2.36Cdn today, which is less than 2.3 X operating cash flow per share for 2023. < InPlay's size and Running Room deserves a much higher multiple.
> PV10 Net Asset Value based only on the Company's Total Proved reserves is $7.20Cdn < Based on their 12-31-2022 3rd party reserves report. InPlay's 2023 drilling program should increase Proved Reserves YOY.
> InPlay's leasehold at their core areas of Pembina and Willesden Green is all held-by-production, which makes them more of a takeover target.
> Running Room: They have 153 net HZ drilling locations at Pembina and another 188 net HZ drilling locations at Willesden Green.
> Production Guidance for 2024 is 10,250 to 11,250 Boepd. < My forecast model for 2024 was based on 10,700 Boepd (lucky guess).
> 2024 Drilling Program will be focused primarily on oil prone areas in Willesden Green in 1H 2024 with one rig moving to a more natural gas prone area in Pembina in 2H 2024, assuming natural gas prices move higher.
> CapEx in 2024 should be a bit lower next year (~$80Cdn million) because they spent more money on production facilities this year.
> Free Cash Flow should be $50 to $70 million. At the high end they might increase the dividend.
InPlay has a lot of high-quality "Running Room" that can be fully developed with operating cash flow if their oil price stays over $75Cdn/bbl (their realized oil price in Q3 was $105.36Cdn/bbl)
> The CEO, Doug Bartole gave an update on where InPlay is today and his outlook for 2024 and 2025.
> Q2 shut-ins due to the wildfires in Western Canada all came back online by mid-Q3 with no damage to the wells.
> 3rd party gas processing facilities that contributed to lower than expected production in Q3 have all been resolved.
> Q4 production should be up more than 800 Boepd quarter-over-quarter with most of the production being crude oil that sold for more than $100Cdn per barrel. Full year production will be near the low end of InPlay's full year guidance of 9,100 to 9,500 Boepd.
> 2023 exit rate s/b ~10,000 Boepd (~45% crude oil and ~15% NGLs)
> Balance Sheet is now in great shape with only bank debt of $40.8Cdn million draw on their $110Cdn million revolver.
> Free cash flow in Q4 (~$10Cdn million) should push Net Debt/EBITDA down to ~0.2X, which is super low for a Canadian Junior.
> IPO.TO trading at $2.36Cdn today, which is less than 2.3 X operating cash flow per share for 2023. < InPlay's size and Running Room deserves a much higher multiple.
> PV10 Net Asset Value based only on the Company's Total Proved reserves is $7.20Cdn < Based on their 12-31-2022 3rd party reserves report. InPlay's 2023 drilling program should increase Proved Reserves YOY.
> InPlay's leasehold at their core areas of Pembina and Willesden Green is all held-by-production, which makes them more of a takeover target.
> Running Room: They have 153 net HZ drilling locations at Pembina and another 188 net HZ drilling locations at Willesden Green.
> Production Guidance for 2024 is 10,250 to 11,250 Boepd. < My forecast model for 2024 was based on 10,700 Boepd (lucky guess).
> 2024 Drilling Program will be focused primarily on oil prone areas in Willesden Green in 1H 2024 with one rig moving to a more natural gas prone area in Pembina in 2H 2024, assuming natural gas prices move higher.
> CapEx in 2024 should be a bit lower next year (~$80Cdn million) because they spent more money on production facilities this year.
> Free Cash Flow should be $50 to $70 million. At the high end they might increase the dividend.
InPlay has a lot of high-quality "Running Room" that can be fully developed with operating cash flow if their oil price stays over $75Cdn/bbl (their realized oil price in Q3 was $105.36Cdn/bbl)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group