Stock price when the opinion was issued
This is one of the few remaining growth companies left. It doesn’t pay a dividend. It’s price dropped sharply after the Spartan acquisition because people thought that deal was horrible and it’s in the same space. It sells at 3.2x Enterprise value to cash flow, has 4 years of PDP reserves. Very inexpensive relative to its asset value. Problems: A high decline rate, and they are focused on the Viking, which doesn’t have a lot of running room left in the Viking. They recently acquired new property, which should be a source of news soon. They have also announced a strategic review.
This offers the highest torque of any energy stock to rising oil prices, so he likes owning this one. The one knock is that they have been a one trick pony in the Viking area with a decline rate of 40%. They acquired a lot of cheap acreage in the Duvernay region to help diversify. The question is, is the new play going to do well? The CEO has $120 million of his own money in this and the balance sheet is squeaky clean. He could see a 78% upside in value from here.
This offers the highest torque of any energy stock to rising oil prices, so he likes owning this one. The one knock is that they have been a one trick pony in the Viking area with a decline rate of 40%. They acquired a lot of cheap acreage in the Duvernay region to help diversify. The question is, is the new play going to do well? The CEO has $120 million of his own money in this and the balance sheet is squeaky clean. He could see a 78% upside in value from here.
BTE-T vs. RRX-T. RRX-T has been taken out by BTE-T. One analyst says you will now own a company with a much higher debt. BTE-T is a zombie company because of debt. 78% debt to equity last time he talked about it. After the deal RRX-T will have a huge increase in production. If you believe in $80 oil by year end then this a good leveraged play on oil. He thinks we will below $60, the problem is that this stock is too levered. It will be at 75% debt to equity. The market is voting negatively on the deal.
This is a bit of a different story because they announced strategic alternatives. It helps when a management team owns so much of the stock. The process should be completed within a month. They will probably find a buyer for one of their assets. He sold this name a month ago. As it sells off it is getting increasingly compelling.