Opinions
Hugh Cleland, CFA
Pacific Energy Resources Ltd.
PFE-T
TOP PICK
Nov 23, 2007
A relatively unknown oil producer doing 9000 barrel per day. Have 3 assets, Alaska, offshore California and deep gas in Wyoming. Any one of the 3 could be worth more than what the stock is trading at now.
$2.000
Stock price when the opinion was issued
oil
gas
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STRONG BUY
Long-term case for this stock is really good. Three plays going on. 1) California/offshore California, 2) Wyoming deep gas and 3) Alaska. The California offshore alone is worth the entire company today. Wyoming is potentially worth a huge amount but a very risky exploration. Alaska, a neglected asset that has a lot of upside. Recent financing was done at $2.20 a share.
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BUY
Still a favourite stock with his company. There was some frustration as they were unable to get a refinancing of some debt but is being financed by warrants from existing holders. The shut-in production should be coming on and will be at 30,000 barrels a day in 2 years. Assets in Alaska, California offshore and Rocky Mountain. At this point, all you are paying for are the California offshore assets.
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BUY
Probably worth $9-$10 a share. Made a very big acquisition of Alaskan assets last spring, primarily debt financed. At the time oil was trading at about $65 a barrel but with the present price they could sell these assets for over $100 million more than they paid. Have a bridge coming due in 2009 but 1) have an extremely increasing cash flow 2) have assets they could sell off 3) and could have a debt refinancing once the market settles down again.
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