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Opinions Bill Bonner
Painted Pony EnergyPONY.TOCOMMENTOct 23, 2013
Bill BonnerUnknown
$7.76
Stock price when the opinion was issued
$0.69
As of Oct 08, 2020. Market Open.
oilgas
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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.
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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.
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BUY
Results are not out yet because of a pipeline issue on the West Coast of BC. He thinks their volumes will pick up again as the pipeline issues are resolved. It is a very cheap stock at one and a half times cash flow. We need LNG takeaway capacity on the west coast, which will benefit them in 2024. We are probably going to have the lowest storage levels in a long time in North America due to cold weather. And Canadian Nat Gas prices are above $3 right now. It looks like cold weather will go on a little longer.
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One of the themes that is running in the sector is, you have to have exposure to the Montney in Northeast BC because that is the source of gas for the LNG projects that are going to unfold. This company fits that parameter. Have some tremendous assets up there. If you believe, as he does, that LNG is going to become a fact, this is a pretty good way to get there.