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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (9537)	10/10/2014 8:47:33 AM
From: Goose94	Read Replies (1) \| Respond to of 203666

Marquee Energy (MQL-V) strengthens it's balance sheet Marquee recently sold some non-core assets for $14 million. This money will be put toward debt reduction and future financial flexibility. The company maintains production guidance which is solid. On September 30th Marquee Energy announced the closing of the sale of its non-core assets in the Pembina area in western Alberta for $14 million. I first had profiled Marquee in July saying that it was a compelling oil and gas junior long term play. The shares though have been in steady decline with the rest of the E&P field, down about 25% since my initial profiling. With this sale and the steep decline in price, it could be time to initiate a long position in this junior that has lots of potential in the future. The company has two core areas, Michichi and Lloydminster both of which are located in eastern Alberta and both focused on production of oil. Its assets that were recently sold on the other hand were located in western Alberta and mainly focused on gas production. Some takeaways from the sale include the good news that it does not alter guidance. Any production lost from the sale was not significant enough to alter the year-end production forecasts. But the best news comes with the fact that it will use the proceeds to pay down debt and for better financial flexibility. Q2 results looked fairly solid as well. The company reported EPS of 1 Canadian cent and production numbers were up 25% from Q1 and 138% from year-end 2013. Average production was 5,035 boe/d and guidance calls for an exit rate of anywhere between 5,500 and 5,700 boe/d. It is important to note the company continues to make progress in transitioning to more liquids weighted versus gas. For Q2 production was only 43% liquids but guidance has the company exiting 2014 with 49% of production liquids. In conclusion, with the sell-off in E&P sector dragging Marquee along with it, the shares are extremely cheap. Obviously, falling oil prices are a concern here, but the possibility of another very cold winter could play out nicely for Marquee. Regardless, Marquee does have about 30% of production hedged through at least next March and a little through next June. With this sale strengthening its balance sheet, the company looks much more attractive and going forward looks promising. By Jack Banser