Opinions
Josef Schachter
Bellatrix Exploration Ltd.
BXE-T
TOP PICK
May 01, 2018
$2.000
Stock price when the opinion was issued
oil
gas
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They are more levered towards natural gas. It all comes down to being able to live with the volatility. Anything related to Montney natural gas is betting on LNG, which may not come quickly enough. He would stay away.
oil
gas
COMMENT
Debt concerns? BXE took bankruptcy protection when debt became too much. There is no equity value in it any longer. Companies that have debt that matures in 2020 or 2021 will have issues. He sees no issues with BIR or TVE on this topic. The new Federal relief program for large companies may be difficult for companies to accept as it has provisions for up to 15% of ownership being made available in warrants to the government.
oil
gas
This was his top pick last year too. They are doing 37000 boe/day, production volume is up 16% from the year before. He thinks that going forward they will do 38000 boe/day. The company’s cash flow should be over $1 this year, so it is trading under 2x cash flow. He thinks the stock can go up to $7 in one year, and has a $20 target for 5 years. He pointed out on the 10 year chart that the stock has massive upside when the price of oil moves. For example, it went from less than $15 in 2012 to nearly $60 in 2015. Similarly in 2009, it was a $2.40 stock and a year later it was $23. They go from being hated to being loved, and right now, the natural gas story is getting strong. The company can make money at $2 gas, but he expects gas prices to go up as American exports of LNG rise. If AECO goes to $3 at the of this year, this stock will go a lot higher. The book value is over $15.37 and NAV is $13.68. This stock is ridiculously cheap. (Analysts’ price target is 1.58$)