Thomas / Barrington Petroleum
Here are some analyst comments on the company.
exchange2000.com
exchange2000.com
exchange2000.com
Barrington shares have moved up sharply within last month. Most analysts estimate 1997 cash flow to be in neighborhood of $7.50 to $8.00/ share. I feel the high end will be realized.
Net asset value (12/96) is $6.47 per fully diluted share. This was before recent new issue of shares. It is my feeling that added reserves and Cube acquisition will more than offset the dilution. Same thought applies to cash flow. Contact the company for a clear and precise understanding.
I lke the operational plan to grow primarily via the drillbit. The company is historically a low cost producer. Disposition of non-core assets will strengthen the balance sheet. I have no problem with their debt load. They are very-very confident in hitting their 1997 objectives and this factors in delays which occurred in the first half. Not many companies of this size are in this position with most scaling back operational forecasts. Third quarter reports will begin to truly reflect my comments.
Long term steady growth can be anticipated with Barrington. I feel Barrington has been underfollowed and thus was undervalued up to this point in time. Superb land holdings and management will take the company forward on firm footing.
About the warrants. Figure this time next year shares should be at a minimum of $8.00/share. I'll leave the math up to you.
If you seek more info on Barrington, scroll down to the bottom of most pages at S.I. and use their search feature (Text Option). The feature will save you an enormous amount of time. Unfortunately, it doesn't go back to much in terms of time.
Since you are new to this thread, permit me to tell you that I'm not the resident authority here. I just try to keep subject content going at a good pace. There are many, no - numerous, people here who have a handle on investment into the oil & gas sector. I'm just one pea in a pod. As example, the two replies you got before this one were from very sharp individuals.
Forgot to offer opinion on Barrington being a takeover target. If I developed a listing of takeover candidates, they would probably be on it, but near the bottom of the list. If someone is to act or attempt a go at them, now is the time. Cash flow multiple is still a little attractive and net asset value is also. Shareholders would have to realize a good premium on share value offer. I, for one, would have to be convinced a preditors offering is better than living with current anticipated growth and progress of current management.
On the other hand, if conditions are right, I can see them enhancing their core areas via acquisitions of their own, using the bulk of the monies received via property dispositions. Thus, this would put the company into a position of lowering their debt load via increased production and cash flow. If forecasts are to be exceeded and factoring in added production from a takeover, the company would be in position to handle it.
The only negative I personally have with operations is the fact that 12% of current production is heavy oil. Looking at liquids only, the percentage increases to about 25% of the total.
Keep in mind, just one man's opinion - this time it was mine. |
