₪ David Pescod's Late Edition March 20, 2007
RALLY ENERGY (T-RAL) $5.44 +0.14
If it wasn’t for good news, Rally Energy would probably have no news to announce at all over the last 12 months. Abby Badwi and his team just continue to come up with numbers that please people. A few weeks ago it was new reserve numbers that showed a huge increase and today it’s their production numbers for the previous year and the numbers for 2006 are quite pleasant.
Their exit rate from 2006 was 6350 barrels versus 2970 for 2005, a not bad 114% increase. Their average production for this past year was 4600 barrels versus 2500 for the previous year, up 78%. The average price they got for oil was even up, which of course is more luck than good management, but there you go. Revenue was up 114% and cash flow was $31 million versus $11 million. Not bad either!
Once again, Abby Badwi and his crew continue to deliver the goods and when we interviewed him on February 15th, he suggested his target for the company is to hit 25,000 barrels a day between the heavy oil that has been doing so well in Egypt and the natural gas, which will be getting interesting over the coming weeks in Pakistan.
For those into idle gossip, Rally continues to attract attention as a potential take-over target by many interests, à la Centurion.
For those who want to read the interview we did with Abby e-mail Sandra at sandra_wicks@canaccord.com.
TRUE ENERGY TRUST (T-TUI.UN) $5.57 +0.20
The chart for True Energy Trust kind of reminds you of some of those ski hills you find at Whistler or other very steep mountains, don’t you think? True has got a couple of problems being a unit trust that was hit by different tax changes, but its real problem is that it is mainly a natural gas company around 75% to 77% natural gas. And with service costs up and natural gas prices down, it’s not the best of all worlds. As a matter of fact, their chart looks no better or no worse than companies such as Delphi Energy (DEE) or a handful of others.
The problem of course for this sector is that there is still no sign of a bottoming for it. True Energy has almost a million acres of land (which is the good news) the bad news is that it also has some significant debt.
Obviously, some people aren’t too happy with what management has delivered because all of a sudden, there is a new slate of directors being proposed for an upcoming showdown. What happens next could be a little bit interesting, but more helpful for True and many other gassy stories is some sort of sign that natural gas prices might have finally bottomed and also the number of drilling rigs turning for gas in the U.S. might have finally peaked.
CAMECO CORP. (T-CCO) $44.68 -0.50
This is one of the world’s premier miners for uranium in Saskatchewan. Over the last while, they’ve had problems with their Cigar Lake mine. It’s known to be a mine that had big problems with water and was recently flooded out.
Management yesterday suggested that they hope to have this mine up and running by 2010 and somehow the market decided they liked that and moved it up yesterday, significantly.
As we talk to many people in the mining business on a usual basis, we should mention that while that sounds a long way out, three years should give you lots of time and lots of money to spend to rectify a mining problem, there are more than a few people suggesting they are going to have their hands full delivering on that promise and there are others that feel that the water problem is so severe, they might never be able to fix the problems there.
Of course this is one more good tidbit of news for those in the uranium business.
If you would like to receive the Late Edition, email Debbie at debbie_lewis@canaccord.com |
