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2012
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January
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- January 31, 2012 Edition of the Stateside Report
- january 27th and 30th Edition of the Stateside Report
- January 26, 2012 Edition of the Stateside Report
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- January 24, 2012 Edition of the Stateside Report
- January 23, 2012 Edition of the Stateside Report
- January 20, 2012 Edition of the Stateside Report
- Quarterly Excalibur Report now available on the we...
- January 19, 2012 Edition of the Stateside Report
- The news a week before the news
- January 18, 2012 Edition of the Stateside Report
- January 17, 2011 Edition of the Stateside Report
- January 16, 2012 Edition of the Stateside Report
- No News From Friday - 3 Reports Sent Out
- January 12, 2011 Edition of the Stateside Report
- January 11, 2012 Edition of the Stateside Report
- January 10, 2012 Edition of the Stateside Report
- January 9th, 2012 Edition of the Stateside Report
- No News from January 6th - But a homework assignment
- January 5th, 2012 Edition of the Stateside Report
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- No news from the Canadian Junior Sector on January...
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January
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7 comments:
It looks our favorite trio of juniors (Donnybrook,Blackbird,Pennant) hit a big snag on their new well. I guess there goes the booze and babes party I had planned for this weekend to celebrate the good news.
My own best guess is that this Montney tri-fecta, Donnybrook, Blackbird, Pennant will receive takeover bids before April. They have proven up their resource, but they do not have the ability to execute on the longer horizontal wells.
This means their land holdings have great potential in the right hands. These companies now have a weak position in the marketplace and probably wont have higher valuations until the wells are tied-in in April. I think the mostly likely buyer is Delphi Energy (DEE), which is being squeezed by low natural gas prices this season. They need to build up their inventory of NGLs quickly to save the company from sinking.
Delphi Energy has been able to complete an extended horizontal well successfully so they may take advantage of the current weakness of the other companies. If there are thinking of a takeover probably the best time to do it is before the wells are tied-in. Also Delphi Energy will have 100% ownership of their pipeline infrastructure.
Of course this is not a recomendation to buy stock in Delphi Energy since I think this is more of wait and see what happens situation. Eric Nuttall, reversed his previous buy recommendation on Delphi Energy to sell on a recent BNN.ca interview. The interview is here at this link:
http://watch.bnn.ca/#clip606825
I think this means Delphi Energy has to come up with something impressive to wow the analysts.
I just read an article at the Oilweek website on Delphi's Energy growth strategy to move from junior oil and gas producer to an intermediate company. The full article is here:
http://www.delphienergy.ca/PDF/DEE-Oilweek-02-2012.pdf
The most interesting points of the article are that the company could have $8-$10 per share value in their Montney plays. Celtic Exploration will generate as much revenue from its Fir property wells as the entire revenue of Delphi Energy by the end of 2012.
Unfortunately, Delphi Energy has used considerable debt financing to get in on the Montney play. Delphi owes $116 million on a $145 million bank line. The company closed a public offering last December for $30 million. They also brought in $12 million from the sale of their non-operating interests in the Sinclair Doe Creek lands.
I would estimate they have $34 million in the bank after subtracting $8 million for the company's first Montney well. All I can ask is Delphi Energy with its high debt load yet millions in the bank is the it a predator or prey in the Montney area?
Sorry for the delay in posting - was at a cheerleading competition. Yes, disappoining well results and they better figure out what technical issues they had on this well before going forward with #3. Both PEN and BBI probably need to do a PP to fund #3. DEI is fully funded already. The stock prices surprised me on Friday as all came back a bit - I guess those that had the inside information and sold leading up to the PR decided they had enough. I'm guessing the stocks are dead weight until April now unless as you say they get a buy-out bid. We'll know before the announcement as there are loose lips here and word always gets out before disseminating news to the public.
why on earth do you play these two-bit stocks? Even if they hit, these wells were marginally economic at current natty prices. There are so many better risk-rewards around in the junior-land. Go up-market just a tiny bit and you'll get self-funded plays from production drilling high impact wells from cash flow.
The internationals juniors are particularly good value - they get Brent pricing for the most part and typically have much better netbacks. Colombian plays like PMG, GTE, PXT, CNE, CZE are very attractive. How about North Sea plays like Ithaca, Iona, Sterling, Antrim, Excite? Or beaten down plays like CalValley that trade just over 1x cf? How about MMT - about to deliver news on a high impact well, will likely issue a Special Divvy ($0.10 on a $1 stock) and is growing 100% yoy with uber high netback production (gets $2 over Brent pricing).
All the above will offer significant upside from current prices - with vastly lower risk profile than the stinkers that get promoted around here all the time.
On Mart.....so much for the lower risk profile LOL. It happens everywhere...part of the exploration business. Just when you think you can't miss. Bang. What a stinker.
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