Stock price when the opinion was issued
(A Top Pick Aug 27/14. Down 50.75%.) Believe it or not, this is the best environment for this company. If you look at what they did with Bonterra (BNE-T) where they were buying oil assets when no one wanted oil. Now it is buying dry natural gas assets when no one wants natural gas. They are probably going to end up getting some really good deals. For a longer-term thesis, this is a great managed company and they have a great idea in being contrarian in their space.
What makes this different is that it is the gas version of Bonterra (BNE-T). An unhedged company. Their track record has been built upon acquisitions. In a way with assets others don’t want. The issue is very low declines. The margin quality is not what you would like. Balance sheet is a little stretched because of a weakness in prices. (This was a very lengthy explanation which I could not follow. You might want to check BNN’s tape to hear it word for word. - Bill.)
Loves this one. They made their mark through the acquisition strategy that they have executed very well. They like to buy gas assets when gas looks like it is horrible. He can see possibly 40% production growth in 2015, which is spectacular in the context of this market. Low gas prices are going to create more acquisition opportunity for them. They have lots of strength in their balance sheet to execute. Their break even production costs are in the $2.25-$2.50 range.