Josef SchachterCompton PetroleumCMT.TOHOLDOct 11, 2007
Has been hit along with gassy stocks. They need $9 or $10 gas to do very well. There are a lot of stocks very similar to this. Feels gas prices will recover but not sure if it will be in the winter of 07-08. By the winter of 08-09, there will be so much lower deliverability in Canada and the US because of the slower amount of drilling.
Ran into production and management problems and very much on the gas side. Expect the company will have difficulty surviving. If you own consider for a tax loss.
Prefers oil to gas as gas is in for a difficult period. You have to be very selective on the type of companies for gas exposure. Look for ones that are operating in the top quartile. This one doesn't fit those criteria. Carry a lot of debt so he questions the real equity value.
Not a better stock if you believe in $10 gas. Leverage has been an awful situation. Sold some assets so debt to cash flow is still unbelievably levered. Only catalyst for growth is the price of Natural Gas.
Doing a lot of the things right. Debt is still high. A little more gas weighted. It has gone from a sell to a hold. A year or more of patients and you will be rewarded.
One of his least favourite names. Will probably be okay because they recently went to the market and raised some money. Would be cautious on this name. If there is a little bit of lift, he would be inclined to sell.
Had far too much debt. New management issued some equity last week, which will help but doesn't think it's enough to keep the debt levels in a range that she would be comfortable with. Thinks new management will be able to turn it around.
A couple of problems. 1) In the gas business and 2) have a very high debt load. New management is focusing on cutting costs. Speculative. Consider selling for tax losses.