Value Microcaps Junior Energy

[dr_airtime]

PTA.V - Board in need of some inspiration...

...Some of you may of followed the writer Value Digger on Seeking Alpha. He's basically an EV/EVITDA comparative analysis O&G specialist who seems to have his eye on most of the "investable" junior public oil producers worldwide. Value guy first and foremost.

He basically finds dirt cheap producers. He is pounding the floor on PTA.V now as they are realistically trading at 1X EV/2015 EBITDA (Brent @ $90 though) and calling it one of the most ridiculous mispricings he has seen in his career. Here is a quick test:

Current MC: $CAD 240 = $USD 213M
WC is $CAD 74M, Cash is $CAD 68M. WC supports using cash for EV. No debt. $CAD 68M = $USD 60M

EV = $USD 153M
At $90 Brent and conservative $50 netbacks, PTA needs 8400 bopd average in 2015 to trade at 1X EV/EBITDA. If you follow PTA.V this should be no problem at all for 2015 as they'll potentially exit 2014 there.

The WC/Cash numbers are from SEDAR at June 30, not quoting blindly of course.

PTA.V is in Columbia, receives Brent pricing and is also a potential takeout by any of their operating partners.

All PTA.V's production has been mostly non-operated to date so that is reason for discount but that will change as he points out as the Suroco acquisition is integrated. The also only had a 2-3 year RLI before Suroco so 2X EV/EBITDA was fair value.

Hard to lose at 1X even if world does fall apart.

Everything else you need to know in two articles below.

Value Digger also has a new no-frills $10/month newsletter. You don't get much detail but just have to trust his reccomendation like CL001's newsletter. He has quite the SA following but releases his newsletter picks to subscribers before SA. During the raginig O&G bull that has ended his picks would all rocket.

http://nathansbulletin.com/

http://seekingalpha.com/article/2549985-petroamerica-oil-welcome-to-the-cheapest-oil-producer-worldwide-part-1

http://seekingalpha.com/article/2562065-petroamerica-oil-welcome-to-the-cheapest-oil-producer-worldwide-part-2

Enjoy - I have made PTA my second biggest O&G position behind MMT.TO last week.