Peter Hodson
Antrim Energy
AEN-X
COMMENT
Nov 26, 2007
Weak last week because Argentina changed some of the tax royalty rates for oil/gas production and their cash flow is from Argentina. All the upside for this company is in the North Sea, where they have had some great success. Market doesn't understand the big potential. Thinks Oilexco (OIL-T) would like to take a run at this company.
About ready to start drilling on the Fine field in UK North Sea. If successful, they will have enough information to submit a field development plan to UK government. Also developing Causeway that is scheduled for production around the end of 2009. Have about 18 months before they see first oil. Likes the name, management and prospects but the market may work against it over the next year or so.
There is a cap on what they can get on oil/gas in Argentina. Also operating in the North Sea. Having 2 separate reservoirs it is hard to see how they can exercise their strategy
Can't believe what has happened to the stock price. Fully financed and have great assets in the North Sea and Argentina. A hedge fund in the UK has been putting pressure on the stock. Trading at 1.25X cash flow on a 1-year basis with the net asset value in the $6-$7 range. Looking for it to get back to its old high.
(A Top Pick Aug 27/08. Down 74.53%.) All the North Sea players fell out of bed when Oilexco collapsed but this one is a survivor and is still in business. Leverage to the upside for oil is still very big. If you believe in oil, the leverage will be quite substantial.
North Sea oil. Found a big play called the Causeway. Royal Bank of Scotland is pretty well owned by the government and they were the biggest lender to the North Sea so capital is very constrained in the North Sea is a very expensive place to do business. Big question is do they have the ability to bring on production in a complex project in the North sea.
Oil/gas producer in the North Sea and Argentina. 2012 production should increase by about a third over 2011. Stock is trading at significant discount to NAV. Have significant drilling opportunities coming up in the next 6 months. Fully funded.
North Sea oil. Some production in Argentina but the real juice to the story is a development well that they are partnered with in the North Sea that is coming on in 2012 with a 2nd one in 2013. This will ramp up their cash flow and increase their production by 50%. Well-financed. Could pull back from here but would use that to accumulate.
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