Opinions
Peter Imhof
Painted Pony Energy
PONY-T
BUY
Dec 27, 2012
$10.350
Stock price when the opinion was issued
oil
gas
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BUY
They have significant assets in the core area that will benefit from LNG. They had a tough second quarter and production came in because they shut in some production. The fourth quarter is going to be good. He thinks they can buy down debt next year. It is a higher beta stock and not owned by institutions. They could be a takeover candidate 3 or 4 years down the road.
oil
gas
DON'T BUY
He is bullish on Albertan-based natural gas because we have declining production and supply, increased take away capacity and inventories are at a 10 year low. The winter will eventually come and then there is the prospect of depleting storage. A lot of Nat gas companies have hedged away their Alberta gas exposure. Pony still leaves him a little uncomfortable, however. He likes BRK-T, TOU-T and ARX-T. The balance sheet of PONY-T leaves him pause.
oil
gas
Company has always done fairly well operationally and with cash flow generation. Great land package. Somewhat disappointed that they did a recent financing of about $170 million. Tough environment for gas companies, which is their main focus. $13-$14 could be a reasonable target.