Stockchase Opinions

Don Short TriOil Resources TOL-X TOP PICK Sep 22, 2010

Assembled 3 interesting oil plays in the Bakken and Cardium. Haven't done much drilling but this is about to pick up. Sitting at 1600 barrels a day but valued at 70,000 BOE's. A lot of growth potential.
$5.230

Stock price when the opinion was issued

oil gas
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TOP PICK
70% light oil, growing at 100%, 4x cash flow with no debt. Should be closer to 6-7x.. Extremely good success in two light oil plays. Wells are coming on at 150-200% higher for same or lower cost.
BUY
This is a poster boy for what people do not want. They do not want oil leverage or small cap stocks. Put out a good quarter. Will likely have an operation update where they are sitting on a couple of wells. Balance sheet is extraordinarily clean. Even if oil prices continue to fall, they have a strong balance sheet to grow meaningful production and are sitting on 2 incredible assets. Potentially it gets over $6 if you look at their 2 main plays. Highly profitable.
DON'T BUY
Canadian junior light oil producer. Looked at it in the past and it did not get the cut. He is going to keep up with this story.
HOLD
On valuations, this is the kind of company that investors generally don't want to own. Oil-based and they feel there is more upside in natural gas stocks. This is a very dangerous belief to have. Also, their market cap is a sub 1 million and fund managers need liquidity. However, things continue to go very well for them. Have 2 very, very good plays that are surrounded by other companies which are actively drilling. Trading at 2.8X Enterprise to Cash Flow using $80 oil.
BUY

Just announced a $25 million financing. Was in a pretty strong financial position before this. Had expected them to exit 2012 with a net debt of about $30 million on a credit facility of about $50 million. Raising equity at this point allows them to accelerate their program. He is particularly excited about their Cardium position at Lockend. They’ve exceeded their type curve wells (?) and there is some additional upside down the road from a new Dunvegan oil play. Good potential from here.

PAST TOP PICK

(A Top Pick March 19/12. Down 30.91%.) Under pressure to sell the compay. Sold his holdings.

HOLD

She owns it and is holding it. Some assets, thinks it will be worth more.

WATCH

Earlier this year a shareholder activist group acquired 5% of shares and forced them into a strategic alternatives process so he is watching it. It is a case of watching to see who puts in a bid for the company.

DON'T BUY

Company was put into play back in January by an institution that bought 5% of the stock and forced them into a strategic review. A lot of other companies have looked at the assets and now seem to be in inclusive talks. Who knows how long this can really drag on? If you own, continue to hold.

SELL

Being acquired at $2.86, effective November. Doesn’t expect there will be a better offer so he would recommend Selling at this point.