Now that the Canadian government has permitted the takeover of Progress (PRQ) it is time to try and figure out what BIR would be worth if the company were to be taken over in the short term. We know that BIR was the target of a takeover but it never materialized because the company felt the price was too low. The share price of BIR was trading in the $12 range during that time so we have to assume that the takeover price must have been 20-30% over that price. It should also be noted that when PRQ was taken over the share price increased by 77% when it was announced.
I do not follow PRQ but this weekend decided to check out the company and compare it to BIR. I was very disappointed by the information they release to the shareholders in their quarterly reports. I'm comparing this to the information that BIR provides in their quarterly reports. On a scale of 1-10, I find that the information released by PRQ is a 1 and the information released by BIR is a 10. When I read the Press Release for PRQ on Nov 01, 2012, I was unable to find out if they had a profit or loss. I had to go to SEDAR and check their company information to find out that they lost $21.2-million in the third quarter. I could never find out the percentage of Natural Gas that is being produced at their own plants.
Let's look at some actual facts so we can compare each company.
The information shown is taken from the 3rd quarter reports for both PRQ and BIR. But, again I must point out that I had to dig deeper to find information on PRQ.
CASH FLOW for PRQ was $22.7-million and $28.2-million for BIR. AVERAGE DAILY PRODUCTION was 43,045 for PRQ and 21,426 for BIR. The AVERAGE PRICE received for PRQ was $2.27 and $2.47 for BIR. The OPERATING COST for PRQ was $6.03 per boe and it was $6.01 for BIR. REVENUE for PRQ was $83.1- million and it was $58.6-million for BIR. Total DEBT for PRQ was $485.6-million and BIR had debt of $468.1-million. PRQ had a loss of $21.2-million and BIR had a profit of $2.2-million.
Now, let's look at some very important information about BIR and all of this is public knowledge. The company are expected to exit 2012 with a daily production of 26,000 boe, which is up from the daily production of 21,426 boe for the 3 months ended Sep 30/12. The company is now producing 100% of their product at their own 100% owned plant. They can increase their daily production to approx 34,000 boe at very low cost. Their operating cost has been dropping each quarter and this should continue in the 4th quarter.
I asked what is BIR worth if they were taken over in the short term. My answer is at least $18.50 and I'm basing that on the fact that PRQ was taken out for $6-billion and based on the difference between PRQ and BIR it could mean that BIR could be taken out for a minimum of $3-billion. That would make BIR worth at least $18.50 per share. But, I think if BIR were to be taken over the takeover price would be higher
I could go into deeper detail but if you have been a shareholder of BIR for the past number of years you know the potential of the company and we know the best is yet to come.. Sit back and enjoy the ride.