Eric NuttallSecond Wave PetroleumSCS.TOBUYApr 13, 2011
Has been a bit of a dog but the story has been re-invigorated with a new play in the Beaver Hill Lake, which is an area that has been pretty hot. This is one of 3 small companies in this play. Crescent Point (CPG-T) is rumored to have firmed in on this company, so are funding the first couple of wells on this highly impact play. Should have well results in 2 weeks.
Debt levels are very high and they were relying on Brookfield, which owns about 40% of the company. He thinks they need $95 oil to grow production. Very highly leveraged.
It was expected that a value of $3.50 would be possible on a takeout but that market imploded. Feels the leverage is a little high. Feels there are better names to own.
Judy Creek Beaverhill is one of the hottest oil plays in Canada. Well results have been fantastic. Concerned about debt, which is a little high, which could result in an equity financing. Brookfield owns approximately 46%-48%.