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Journey Energy (TSX: JOY | OTCQX: JRNGF)
Shares O/S FD – Basic 67.1 FD 69.5
Market Cap ~113.41
Net debt - ~$53M
EV ~ $166.41
AVG daily trading volume 83k/shares
$38M of convertible debentures with a strike price of $5.00
Key Highlights:
Journey came out of the downturn with excessive leverage, but a great low decline asset base of 13%.
The company made a key acquisition in Medicine Hat of low decline assets with 34 undrilled locations with an active polymer flood and have recently drilled eight successful wells.
Recently announced a JV with Spartan Delta on 128 sections in the Duvernay. JOY 37.5% and SDE 62.5%. These 128 sections have a pay thickness between 30-40M, the sweet spot of the Duvernay 7 wells drilled this year and the first pad is coming on better than expected, ahead of schedule.
JOY recently secured an a RBL from a major bank of $55M (undrawn) to support their portion of Duvernay drilling which should be self funding by 2027.
The Company had an excellent Q1 with cash flow of $19.6M which is 11% above Q1 2024. Net capital spending for Q1 2025 of $9.6M.
The company has 1BBOIP booked only at 5% recovery factor with 254 net locations identified and a PDP NPV10 value of $350M. Most of their peers trade above PDP value. Including nothing for the Duvernay.
Significant insider buying by the CEO and board of directors of > $1.5M.
Ownership is between is > than 30% by insiders, Aimco and other institutions.
Tax pools of $675M.
Forecast for 2025:
Production -10,800 – 11,000 BOEPD.
Capex $ 55M.
CFPS $0.84 per share.
Main Catalyst will be Duvernay wells.