Richard - Francoise - Don / Tusk Energy
Just commented on Tuske Energy at another site and am pasting here
also. Would like to hear another opinion. Comment is as follows:
Hello Don,
Just noticed this thread existed. I own a few shares of Tusk Energy.
However, I do have a concern. Cash flow for the 1st quarter was
$0,11 and the 2nd quarter was $0.07, a decrease of $0.04. They
pronounce year to year increase and annualized increases (which
I dislike) and never mention the quarter to quarter decrease and the
reason for it. I looked at $ revenue and decrease occurred here also,
even with an improved oil price of over $5.00/bbl. This was the first
decrease on a quarter to quarter basis after 5 consecutive increases.
By any chance, did you question the company on this? It could be
due to the sale of the Haslet Unit in Saskatchewan on April 1st. I'm
sure it contributed, but to what extent?
I saw the report by Investors Guru, a service I'm not familiar with.
Quite frankly, I don't place much emphasis on it. To begin, I don't
know the date of the report, but I do believe it was released after
August 28th-----which was the date of the six month report issued by
Tusk. The report projected $1,137,000 in cash flow while the actual
total was $841,000---that's 26% less than projected. They further
project $3,000,000 cash flow for 1996 and I don't think that will
happen either. Let's say the interest acquisition of the D-2A Meekwap
Unit doubles production for the remaining 6 months of 1996--------I
would estimate an increase of $1,000,000 to $1,200,000 incremental
cash flow over the 1st half of 1996. Using the lower amount, cash
flow would be $2,600,000 for the year. I have not considered added
production from other existing properties or potential new acquisitions.
Based upon 4.8 million shares outstanding, this amounts to $0.54 cash
flow per share. Keep in mind, this is based on the company not issuing
additional shares to raise equity. Any new issue of shares would dilute
shareholder value per share as well as cash flow per share.
If the report date by Investors Guru is later than August 28th, they are
not doing justice for investors like you and me. I also believe the
numbers projected were company numbers, not from their analysis. By
any chance, is Investors Guru paid by the company to report on their
activities and progress.
I like everything else about the company, especially their agressiveness
in land acquisition. However, minority interests prevent them from
controlling their own destiny. This will change with increases in
production. The shares are selling at a low multiple to cash flow and
at a discount to net asset value. (year ending 1995)
I hope we have a winner .
PS: Just reviewed report @ Investors Guru. The report is dated
10/15/96. Just goes to show one, we should rely on our own
homework and not accept everything we read. They could of least
updated it with current information.
2nd PS: Francoise & Bobby, hope you're proud of me. I've got this
pasting down pat. |
