Bankers Petroleum (BNK.TO)

A top holding for a number of years. Have done exceptionally well recently. Pretty impressive quarter on quarter production growth. Work is taking place on a port as part of a plan for the future growth of the company. NAV is $8.15 so it is undervalued.

Great management. They are going to put in new pipelines and lower the cost.

Will break down if we get a breakdown in the energy sector. Concern is if we get below the trend line.

The company is located in Albania. When looking at oil, he needs a good story and a good dividend and doesn’t want any kind of geopolitical risk. Would prefer Baytex (BTE-T).

He has a model price of $12.40 which is a 130% upside. There has been a positive move in the stock and he has had a positive transit of one of his EBV (Economic Book Value) lines, which is very positive. It will probably hold here for a while, but energy stocks are starting to have some action in them.

The group overall has been generally heading higher and this was been one of the more stellar of the companies. It has a Fair Market Value which takes at higher than it is right now. He could see $7.50-$8 from a FMV point of view as long as the oil/gas fundamentals are with you.

Left for dead a couple of years ago. Most of assets are overseas. Management hiccup a couple of years ago. Fixed now. Lots of room for them to go. Can reduce costs. Market is still a little shy of their hiccup. They get over seas pricing for oil.

Likely a takeover target. One of his Top Picks. A story about bringing in North American technology and expertise. Sees production growth continuing.

Looks like they are turning the corner. Had a new CEO come in early last year and have now had 5 quarters where they beat expectations in terms of production growth. Officially guiding for 10%-15% production growth this year. If you take out some of the conservatism, it looks like they could grow by 18%. Stock is trading around 3.1-3.6 times cash flow, a very cheap multiple for 18% production growth multi-years of inventory. Still has to warm up to this a little. He can achieve 18% in Canada, so doesn’t necessarily have to go to Albania. Very cheap stock. He is going to watch a little bit longer.

Things got definitively over hyped. The new CEO has definitely turned things around. It is a very cheap stock. Have been free cash flow positive for the last 3 quarters.

Production last quarter was 18,500 barrels a day, a 3.7% increase over the previous year. They’re getting the costs under control. New management is now starting to generate free cash flow. He is now becoming encouraged for the first time in a long time that the new management is doing the right thing.

With their new CEO they have had 5 quarters of sequential growth and growing production by roughly 14%-16%. In their current commodity deck, they are able to bring in an additional rig and potentially grow up to 20%, while at the same time essentially maintaining a debt-free balance sheet. Operating in Albania. Thinks it is going to stall around $4-$4.25 level. He has been scaling out recently.

For individual seasonality, you might want to look at www.equityclock.com. Hit Charts and punch in any stock you want and that will give you specific seasonality. There are usually 2 periods for energy, winter and another one in the summer. The little breakout a while ago, following the base pattern, was very positive. He expects it to get to around $4.50 at which point he would start paring.

Feels they are starting to turn around. In Albania and management went in with lots of expectations to recover an old oil field and subsequently found that some of the pipes and wells have a lot of erosion. They pretty well spent the last 2 years in repairing wells and are finally seeing a very good response. Stock is very cheap. Sitting on 6 to 8 billion barrels of oil, so she feels there is a lot of value in the stock.

All the Junior oil and gas companies have been struggling. This stock is getting a bit of a boost right now because crude oil prices are up and differentials have tightened. On smaller cap companies, you really have to pick your places and he is not certain that this one is a name you need to own. Growth profile is not all that exceptional. Would prefer something like Raging River (RRX-T) or Tourmaline Oil (TOU-T).