Are we in a price bubble for assets in Bakken and Cardium?
Land valuations are predicated on a high price for oil. There was a recent study that would lead you to believe that. But you could have drawn the same conclusions from the first wells drilled in the Bakken. Now, the quality of what is coming out today is so much higher than those first wells. There is a technical learning curve. From a financial viewpoint, when we went in and bought all our land in the Bakken, my phone was ringing off the hook with people telling me how stupid I was. But what we bought was just one-tenth of the going price of a year later. In the Cardium, we knew we didn’t have a window to quietly go about it, because things were going to heat up in a hurry. That’s why we did three deals in such a short period. Now land sales are starting to double our average price and they will go up to triple and quadruple. As technology catches up, those will be great numbers to pay. What is the end game? The end game is to see four fully independent separate public companies. The
