re: GBE.V - $1.50 (Canadian NG Stocks)
Ok my first Canadian NG related pick is GBE.V (TSXV)- Grand Banks Energy, traded on the TSXV in Canada. IMHO this appears to be quite an exciting domestic Canadian NatGas and Light Oil exploration play !
www.grandbanksenergy.com
Grand Banks energy, right now producing around 1200bopd. A .pdf presentation from June plus an astonishing webcast presentation (CAPP) are available on the site. Marketcap is $35m USD fully diluted but due to substantial taxpools of C$40m, it’s Enterprise Value is actually below USD $20m - plus the company is debt free.. looks like Grand Banks isn’t going to pay taxes for quite some time.. They guided towards a C$20m drilling program for FY2005, 3/4 of which to be conducted in the second half.
Metrics are pristine for a growing NG play in Canada with exploration upside:
Marketcap per flowing barrel is around $30.000 USD
And EV (due to the Taxpools) per flowing barrel is only around $16.000 USD
Production is almost 90% NatGas right now. What sets this company apart from others is that despite enjoying a nice baseline production of around 1000boepd, they are actually doing EXPLORATION, not just development work. Their recent issuing flow-thru shares fits perfectly with this strategy, since proceeds from flow-thru money can only be applied to domestic Canadian exploration outlays and not development or foreign concessions.
Their core areas are also spread between BC, Alberta, Manitoba and Sasketchewan, a plus in times when inclement weather takes its toll on producers concentrated in one region. The company has been growing from ZERO production to their current level above 1000boepd all thru the drill bit.
This fall - 5 further high impact NG exploration wells in Canada are going to be drilled. EACH (!) of which could bring the company 500boepd NET to the company. Plus they amassed land in Manitoba and Sasketchewan where BAKKEN OIL plays are to be tested in Q3 and beyond (7 well program, 3 verticals and the rest horizontals)
Totally, more than 70 drilling locations were defined.. I think this is THE company to capitalize on exploration success AND higher NG prices this winter. Some experts feel a spike of $15-20 for US NG is conceivable, especially after the hurricane fallout which is about to materialize.
Insiders own more than 20% of the stock. The entire management team, including President McFeely have been buying shares at the open market for quite some time. I talked to President McFeely recently.. he said a strategic plan is in place to bring the compnay towards the 5000boepd level. Beyond that it's either a sale to a royalty trust or if they hit a mega-home run potential - a new strategic plan will have to be crafted.. I tend to really like his straightforward attitude.. And by the way, McFeely was the gentleman, who started .. Canadian Superior (Amex: SNG) some time ago
best rgrds
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