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I recently wrote an article for Seeking Alpha that focused on the valuation of my favorite unconventional oil company Petrobakken (PBKEF.PK) relative to recent transactions involving similar assets.

Just a day later and I have a fresh new transaction metric to plug into my calculator. This one is a good one for valuing Petrobakken because it involves a company focused on the Alberta Cardium which is a resource play that provides almost half of Petrobakken's production.

This transaction involves Bonterra Energy Corp (OTC:BNEFF) which is going to acquire Cardium focused Spartan Oil (OTC:SRTNF). The details are as follows:

Bonterra Energy Corp. ("Bonterra") has made an offer to acquire all of the issued and outstanding common shares of the Company (the "Bonterra Offer"). Pursuant to the terms of the Bonterra Offer, the shareholders of Spartan will receive 0.1169 of a common share of Bonterra ("Bonterra Share") for each Spartan Share. In addition, subject to the execution of a definitive agreement and completion of the transaction, Bonterra has covenanted to increase its dividend to $0.28 from $0.26 per month commencing March, 2013. Based on a closing price of $42.46 per Bonterra Share on December 10, 2012, the Bonterra Offer represents a deemed price of $4.96 per Spartan Share

The total price per share being paid for Spartan as indicated above is $4.96. That values Spartan as follows:

Shares Outstanding - 91 million

Price Being Paid - $4.96

Market Capitalization - $4.96 x 91 million = $451 million

Current Production - 4,000 boe / day

Price paid per flowing barrel - $451 million / 4,000 boe / day = $112,000 per flowing barrel

There you go, yet another oil weighted company or asset sale that is priced at $110,000 per flowing barrel or higher. I've been watching the transactions roll through all year and I don't see any (other than those in extreme distress) that aren't in this price region.

Here were three more deals that I referred to in my prior article:

- On November 2, 2012 Equal Energy (NYSE:EQU) disposed of 525 barrels per day (93% oil) of production for $62 million. That is $118,000 per flowing barrel.

- On February 16, 2012 Crescent Point Energy (CSCTF.PK) bought 2,900 barrels per day of oil production from Petrobakken for $427 million. That is $147,000 per flowing barrel.

- On June 1, 2012 Crescent Point closed on an acquisition of 2,500 barrels per day of oil production in the Shaunavon for $343 million. That is $137,200 per flowing barrel.

Still not satisfied? Here are a couple more:

- On November 1, 2012 Crescent Point Energy acquired 7,800 barrels per day (88% oil and liquids) of production for $861 million. That is $118,000 per flowing barrel.

- On October 29, 2012 Renegade Petroleum acquired 3,600 barrels per day (94% oil) of production for $405 million. That is $112,500 per flowing barrel.

All of those transactions have oil weightings quite similar to that of Petrobakken and the price range on production is from $110,000 to $147,000 per flowing barrel.

Using that range of values what does it suggest Petrobakken is worth?

Petrobakken - The Low Valuation - $110,000 per Flowing Barrel

Exit Production - 54,000 boe/day (85% oil)

Metric - $110,000 per flowing barrel

Estimate of Value - $5.940 billion

Less Petrobakken's Net Debt - $1.6 billion

Value For Shareholders - $4.34 billion

Shares Outstanding - 190 million

Estimate of Value Per Share - $22.84

Current Share Price - $10.44

Petrobakken - The Mid-Point Valuation - $128,000 per Flowing Barrel

Production - 54,000 boe/day (85% oil)

Metric - $128,000 per flowing barrel

Estimate of Value - $6.912 billion

Less Petrobakken's Net Debt - $1.6 billion

Value For Shareholders - $5.312 billion

Shares Outstanding - 190 million

Estimate of Value Per Share - $27.96

Current Share Price - $10.44

Petrobakken - The High Valuation - $147,000 per Flowing Barrel

Production - 54,000 boe/day (85% oil)

Metric - $147,000 per flowing barrel

Estimate of Value - $7.938 billion

Less Petrobakken's Net Debt - $1.6 billion

Value For Shareholders - $6.338 billion

Shares Outstanding - 190 million

Estimate of Value Per Share - $33.35

Current Share Price - $10.33

The low point of the range of these transaction multiples is a double in Petrobakken's share price and the high point is a triple. I'll admit that I'm starting to get frustrated by having to watch all of these deals validate my valuation work on Petrobakken only to have Mr. Market turn a blind eye.

There isn't anything that I can do but wait I'm afraid. The market can stay irrational for a very long time. It is certainly clear that oil companies value oil production much more than stock market investors do.

Source: Another Day, Another Transaction Showing Petrobakken's Significant Undervaluation