(Idea) Pounding The Table On Veren? Jon Explains Why He's Super Bullish (Part 2)
Editor’s Note: Ideas from HFI Research is a separate paying subscription to HFI Research. Veren is not a holding in the HFI Portfolio, so this write-up is not included. Jon Costello explains why he thinks the latest reserve report is great news for Veren bulls.
Please read part 1 of Jon’s report on Veren here.
By: Jon Costello
Note: Dollar values are in Canadian dollars unless otherwise specified.
My investment thesis for Veren (VRN) boiled down to main two points:
The company’s geology is very good despite its recent terrible well results.
There are no more shoes to drop for shareholders.
Both points were validated this morning when Veren reported the results of its 2024 reserve report.
The VRN bear thesis held that the company’s bad well results reported on October 31, 2024, reflected problems with its geology. If that were the case, VRN would have reported significant reserve impairments in its 2024 reserve report.
With the reserve report now in hand, we can confirm that not only did VRN report no impairments, but it reported significant reserve extensions, as well as positive technical revisions. The alleged problem area—VRN’s Montney acreage—contributed 65% to the reserve additions, with the remaining coming from its Duvernay position.