John/Neutrino Part II
For the fiscal year ended Dec. 31, 1996, Neutrino's daily average
production soared 231% to 851 boe/d, producing a profit of $436,373
($0.04 per fully diluted share) and cash flow of $1.9mil. ($0.14 per
fully diluted share) on revenue of $6.6mil. compared with a loss of
$598,518 ($0.14) and negative cash flow of $255,921 ($0.06) on
revenue of $1.8mil. in 1994.
For the first half of 1996, daily average production rose 171% to 1,531
barrels of oil equivilant (not including 362 barrels from the Pine Creek
acquisition) from 566 boe/d in the first half of 1995. Net income
jumped 41% to $675,387 ($0.04 basic), revenue soared 125% to
$6.2mil. and cash flow leaped 166% to $2.2mil., not including the
$613,206 of cash flow from Pine Creek, which was applied to the
purchase price. Debt is $6.8mil..
Arsenych (CEO) forecasts that for fiscal 1996, Neutrino's daily
average production will increase to 2,000 barrels with earnings of
$1.3mil. ($0.08 fully diluted) and cash flow of $4.8mil. ($0.26 fully
diluted) on revenue of $13.5mil.. These forecasts do not include a
10% interest in a high potential exploratory gas well on the Tsuu
T'ina Indian Reserve southwest of Calgary. The well has been
drilled and will be production tested shortly to determine its potential.
Neutrino's growth has not been reflected in its stock, which at $1.05
is trading at only 3.6X forecast 1997 fully diluted cash flow and 60%
of fully diluted net asset value per share. The company also is not
widely followed. Neutrino shares (NTO-TSE) traded last week at
only $0.82/share, less than half of its net asset value of $1.76. The
stock gatherred some momentum this week.
Sprott Securities does not follow Neutrino, but research associate
Zane Reiter says the junior oil & gas companies with market cap.'s
below $130.0mil. it does follow have price to 1997 cash flow
multiples ranging from 2.6 to 5.4 with a median of 4.2. Nonetheless,
Neutrino has caught the attention of some institutional investors.
ARC Financial Corp. is one of Neutrino's 16 founding shareholders;
Citibank Canada acquired Neutrino's $5.0mil. debenture on Wed. and
Citibank vice-president Greg Daniels joined Neutrino's board; and
Denro Fund Management Alberta Inc. acquired 250,000 of Neutrino's
$1.05 special warrants in April. "We've been following Neutrino for
quite some time," says Denro president Robert Knight. "We like
Neutrino's aggressive deal-making skills and ability to manage down-
side risks." "Our company has positions in likely a dozen oil co.'s.
We're bullish on the industry in general and we really like the small
companies that are being aggressive with expansion. And agressive
small companies are going to be where the big gains are made."
Neutrino's insiders, who own appoximately 40% of shares, have been
heavy buyers over the last nine months, according to insider trading
reports filed with the Alberta Securities Commission. In addition to the
purchase of 150,000 warrants at $1.05, insiders have acquired
312,500 shares at prices ranging from $0.63 to $0.80.
END OF ARTICLE & PART II of III Pages. |
