Joanne A. Hruska, CFABronco EnergyBCF.TOWAITJan 04, 2008
Focused on heavy oil sands production. In the early stage of delineating their resources. Have about 8 wells planned for this winter and are in the early stages. Hoping to get 400 to 600 barrels a day from each of these wells. If they don't have what the market has factored in, there could be some risk to the downside. Suggests that you buy a basket of oil sand stocks.
New management team raised a convertible debenture. An issue would be their asset base. It will be a struggle as other companies have tried to drill it up but have abandoned it because of too much water.
Had experienced some delays and facilitate constraints in production. The play itself makes a lot of sense. Could get to $15-$16 on success of execution. If you believe in heavy oil and the differential, which is very narrow right now, management is one of the better ones.
In production. Will be producing 4000-6000 barrels of oil a day by the end of June. Right next door to Canadian Natural Resources (CNQ-T) most profitable, low-cost producing field. This company will have a lot of cash flow in the very near future.
(Q: Did they get approval to draw off the water from Stone Cree Nation reserve?) Doesn’t know. They need water in order to develop the in situ production they will be working on. They have about 87,000 acres in the Alberta Oil Sands, which translates to about 4 billion cubic feet of oil. Of course a small percentage of that is obtainable. Wait until there is some production, which is expected this year.
(A Top Pick Mar 30/07. Up 34%.) Has a lot of oil in the ground with about 45 wells now and should average about 200 barrels a day and exit this year at about 8000/10,000 a day. Good management. On first natives land so is not affected by Alberta's royalty review.
Rapidly growing production profile. No debt. Exiting next year at 10,000 BOE a day. Could drill 300 or 400 similar wells in the next year. Not affected by the Alberta oil review program.