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Choice Resources (fka CZEKF)

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Last Post: 1/26/2010 8:45:45 AM - Followers: 3 - Board type: Free - Posts Today: 0
Choice Resources is a natural gas driller in Canada. They have long life reserves and are growing production after selling off some non core production. Current production is 1349boepd.
Choice is undervalued with very low cashflow to price ratios. Choice earned C$.02 in the qtr ending 5/31/05 and is currently priced at C$.87.

The company has been focusing on paying off debt and gathering acreage around their key production areas.

In August 2005, Choice began drilling a high potential horizontal well at Pincher Creek. Total depth and testing should be completed by early October 2005. The well is part of a land package that contains several big prospects. Choice will operate the Pincher Creek well in a partnership with Running Fox Resource Corp. The details of the well and its prospects are contained in the following two PR's:

http://www.stockhouse.com/news/news.asp?newsid=2887044&tick=CZE
http://www.stockhouse.com/news/news.asp?newsid=2888110&tick=CZE

EARNINGS REPORTS

http://biz.yahoo.com/ccn/051027/200510270293917001.html?.v=1
http://biz.yahoo.com/ccn/051027/200510270293917001.html?.v=1
http://biz.yahoo.com/ccn/060130/200601300308081001.html?.v=1

PROJECTIONS
 

Qtr Q4
Date 2/28/06
Avg Prod 1475
Total BOE 132750
Price C$60
Gross Revs 7,965,000
Royalty Exp 1,624,860
% 20.4%
Credit
Net Revs 6,340,140
Op Exp 1,500,000
$/boe 11.30
Trans Exp
Depletion 1,250,000
$/boe 9.42
G&A Exp 250,000
Interest 65,000
Accretion
Stock Exp 210,950
Total Exp 3,275,950
Net b/f Tx 3,064,190
Inc Tax 980,541
Net Inc 2,083,649
EPS .034
C/F 4,525,140
C/F shr .074
Avg Shrs 61,000,000

This projection is based on the PR dated 2/16/06. Sounds like they had some trouble hooking up production from the previous qtr because they are still projecting 1600-1700 by end of Feb/early March. Last qtr they were saying they would be at 1600 after hooking up behind the pipe production. So I used 1475bpd avg production to be conservative and lowered the boe price to C$60. While about the same as Q3, if they can avg 1700 for q1, that will be a 15% increase from Q4 and probably add more than that to eps and c/f. That would put c/f around .085 to .09 per share. If you annualize that number, you get .36 or less than 3 times the current share price of C$.94. Choice remains one of the cheapest Canadian juniors. Once they show consistent production growth, I believe the stock price will increase closer to the middle of the normal range for Canadian juniors of 5 X c/f, which would result in a stock price of C$1.80.

Bobwins
PostSubject
#4   Too bad there isn't a basket of of bigpike 09/07/05 01:33:33 PM
#3   Lentinman.... Canadian juniors Bobwins 09/02/05 07:03:31 PM
#2   BW: You remember when you mentioned your list of lentinman 09/02/05 05:45:04 PM
#1   I have high hopes for Choice. They are Bobwins 09/01/05 09:11:28 PM
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