Stockchase Opinions

Eric Nuttall Progress Energy Resources Corp PRQ-T COMMENT Dec 07, 2012

Petronas deal was approved by the government. Feels that for the net benefit of Canada, despite having become such a political issue, it was absolutely the right decision. Capital requirement for oil Sands, tight oil and feedstock for West Coast LNG is absolutely humongous so we need companies like this to come in. There are some concerns that we need to pay special attention to but it was absolutely great and proper decision for the oil patch.

$19.370

Stock price when the opinion was issued

oil gas
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COMMENT
On a long-term, it is a great company. Have an incredible asset that will be highly strategic to west coast LNG. Shorter-term, it is trading at 13X enterprise value to cash flow. At current prices they cannot grow production at $3.50. It is already discounting a recovery in natural gas prices. You are probably a year out before a takeout is on the table.
DON'T BUY
Should never have been paying a dividend in the first place. A gas producer in a poor gas environment. A long-term hold. Could be worth a lot more in 5 years and he is not convinced the dividend is safe.
PAST TOP PICK
(A Top Pick April 19/12. Up 109.88%.) Being acquired by Petronas.
PAST TOP PICK

If you are buying at this level, you are looking for the deal to go through and get your $22 and hoping to get it in the next 30-60 days. Nice short-term upside if the deal goes through. If the deal does not go through, he thinks this will trade in the $14-$15 range. There is potential that if this deal gets nixed a new buyer may emerge in the next 12 months. Very tough to speculate.

BUY

He thinks the take-over will go through. Canada must build LNG facilities and eventually those who have not taken advantage of being the first mover and if we miss out, then our Nat. gas will be land-locked. The buyer of PRQ has committed to spending billions of dollars. As a country we need this to go through. This is not that strategic of an asset. As a country we need it to go through.

HOLD

(Market Call Minute) The deal probably goes through.

PAST TOP PICK

(Top Pick Apr 19/12, Up 129.61)

COMMENT
They are involved in Western Alberta. They have 40% liquids and 60% Nat Gas. They can pull down their debt. It is a name too small for him to talk about. He likes their asset base as well as the management. He owns a small position but liquidity is a concern.
PAST TOP PICK
(A Top Pick Oct 09/18, Down 74%) It has a debt situation. He likes the company and the management. They have good assets. He would like to see the debt paid down more.