Opinions
Robert Lauzon
Anderson Energy Ltd.
AND-T
COMMENT
May 21, 2014
$0.245
Stock price when the opinion was issued
oil
gas
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COMMENT
Have been able to develop an oil play prospect on top of the gas prospect. A lot of prospective drilling over the next couple of years and really increase production and improve their cash flow profile. Prospective takeover target but the price will have to go up a bit more before they would be willing to sell.
oil
gas
HOLD
Likes to think of this as a capital destroyer. If you invested 5 years ago, you’ve lost 95% of your money. Has very distressed shallow gas assets in the Edmonton Sands play but they do have some fairly decent Cardium acreage and are slowly trying to migrate the portfolio development over to the oil side. Expect there will be a positive sale over the next few months.
oil
gas
COMMENT
They are undergoing a turnaround. Last fall they were looking at strategic alternatives, which led them to sell about $150 million of assets and to pay off their bank loan. Unfortunately, they still have over $90 million of convertible debentures, paying about 7.5% that they have to deal with. Has huge potential upside, but it is a very dangerous situation. Has the same old management that got them into troubles in the first place
oil
gas
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Had a bit of a debt problem so they’ve been selling off assets, which has brought their overall gross cash flow down, but it has cleaned up their balance sheet. Thinks they have a bit of a shot here. Doesn’t own the stock, but owns convertible debentures that are trading $.85 on the dollar. This gives you equity like returns with a bond here if it matures at par in a couple of years. Play this one through convertible debentures.