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Credo Petroleum (CRED) is another company flying under the radar.Recent chart bottom and improved oil demand is positioning CRED to do very well in 2012.
It seems Credo is worth a look. Starting in 2006 and lasting a decade, Credo appreciated its stock price from around a half dollar to $30. It seems they were a natural gas company with Calliope, a natural gas recovery system.
Since then they have converted to oil in quick fashion, with a 150,000 gross acreage in Kansas and 7,200 gross acreage in the Bakken. They also have another 70,000 acres in Western Oklahoma and the Texas Panhandle that Credo has stated will start to drill as soon as gas prices improve. In January, Credo completed its third Bakken well. This created a large spike in stock price from around $8 to $12. It is currently trading around $9.50.
This company is a play on the Niobrara (remember different area), as Samson is. Double Eagle has 70,000 net acres and is planning to drill one test well this year.
A very important note, Double Eagle's asset is in the Atlantic Rim that is approximately 200 miles from where Samson/Chesapeake/Halliburton (HAL) are. Also, Double Eagle is the 12th largest coal bed methane producer in Wyoming, so this company is not to be valuated like a company with substantial liquid reserves.
At the end of the third quarter of 2010, gas was 97% of the business. This company also has a pipeline-based income. On February 22nd of this year, Brookfield Asset Management upgraded the company from hold to buy based on third quarter earnings.
It seems that Double Eagle is maintaining a profit. This company could have significant upside if its Niobrara holdings are oily, but this is a play on speculation.
Nice call on the bottom it rebounded nicely with oil prices. This becomes more attractive the higher the prices and as DD pointed out with new government things are likely to continue getting better.
Summary:
Suncor Energy Inc. (SU) is an integrated energy company involved in the development of petroleum resource basins in Canada, transportation and refining of petroleum and petrochemical products in Canada and marketing of crude oil and natural gas in Canada and internationally.
Financial highlights:
Due to its integrated structure, SU’s financial performance is directly tied to international oil prices and this has reflected in its profitability performance during the last three years when after a significant 37% drop in its 2009 earnings over 2008, SU roared its way back with the highest every profit of $ 3.6 billion in its entire history, a colossal 228% ascent (on YoY basis). And the story doesn’t end here as the company is expected to come out with yet another bumper year in 2011 i.e. an EPS growth of 82% along with a 15% growth in 2012.
In light of these expectations, the year-to-date drop of 14% in the stock's price has only polished its potential as SU is not only trading at a 27% discount in terms of price-to-earnings ratio to its closest competitor, Imperial Oil Limited (IMO), it is also trading at a steep 44% to the industry and this is in addition to a 1.4% dividend yield.
Key points to consider for DNR going into year end and 2012.
Denbury Resources, Inc. (DNR) is a small-to-medium sized energy company engaged in extraction of oil and natural gas in the Gulf Coast.
DNR’s recent financial history has been contrary to being “typical”, with wide swings in its topline during the last five years and more than doubling in 2010 over the previous year. However, the consistent pattern of net margins, which was disturbed due to a turbulent 2009, is still far from return to normalcy as the number for 2010 came out half (14%) against an average of 28% (2005-2008). Despite a consensus 2011 expectation for earnings growth of 78%, the stock is down 13% since the start of the year, which is only making it attractive.
The firmness of the case of “mean-reversion” of DNR’s price can be corroborated from the expected net margin for 2011 i.e. 23% which is a clear sign of consolidation of the company around its lost ground.
Anadarko Petroleum Corporation (APC) is one of the world’s largest independent oil and gas exploration and production companies. It markets natural gas, crude oil, condensate, and oil and natural gas liquids (NGLs), as well as owns and operates natural-gas gathering, processing, treating, and transportation systems.
The stock comes second in our list with a year-to-date return of 8%. The company’s financial performance during the last five years reflects its heavy exposure to the international oil prices. In terms of revenue, though APC registered a net 5-year CAGR of 12% (2005-2010), there are significant variations in between which are almost identical to international oil price movements.
More importantly, in times of rising oil prices (2006-2008), the company’s profitability followed its sales pattern almost exactly; however, this relationship has weakened during the last two years which shows certain shortcomings in adjusting its cost structure required to maintain the past margins. However, this transition is expected to be completed in the current year as the company is all set to grow its bottomline by 77%.
In addition, the stock has kept its “premium” momentum over its closest competitors, Apache Corporation (APA) and Canadian Natural Resources Limited (CNQ), since July 2011 which is expected to sustain on the back of rising oil prices internationally.
The stock is the top performer in my list with a net return of 14% since the start of this year with a peak of 29% touched in July 2011. Financially speaking, SWN has reflected considerable growth during the last five years. With a 5-year CAGR of 31% in its topline, not only was the company able to absorb the oil market crash of 2008 (with a minor dip in sales and a slightly red bottomline), its average annual profitability growth excess over revenue growth tells that it has also been able to generate better returns for its shareholders.
From an investment perspective, though the company appears as expensive based on its earnings comparison with its closest competitors like Chesapeake Energy Corporation (CHK) and Williams Companies Inc. (WMB), the justification of this premium lies in SWN’s operational superiority over CHK and WMB.
During the last four quarters, in contrast to WMB’s $ 525 million loss and CHK’s net margin of 10%, SWN was able to come out with a towering net margin of 22% (2006-2010 net margin – excl. 2009: 22%). Therefore, I expect SWN to continue to trade at premium multiples.
Posted a link to your DD and the most recent chart here: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68768137
New high volume speculation Kentucky oil & gas play CAMS
Some recent pictures of operations and DD: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68763401
Chart may be bottoming out. Great swing trade potential from here if they demonstrate a means to develop these wells.
Yeah natural gas is very interesting. LNG is increasingly popular because traditionally natural gas is regional and not imported / exported like oil. Because of this there are limited markets and with all the new drilling / fracing technology the market is over saturated.
It is however increasing in demand and will continue to do so as oil breaks triple digits again and it is pushed by Pickens and the media as an alternative to oil. The nice thing about the price of natural gas is it will not be hard to move 50-100% in price which makes natural gas stocks & etf's worth that much more.
TSD thanks for updating me with the pictures. The nice thing about Kentucky wells is they are shallow and low to maintain.
If there is a history of oil production on these wells then chances are good they can be reworked for low costs and produce steady amounts of oil. My experience you see about 5-10 BOPD per well but it can be economical since the rework costs are low.
Do we know if CAMS has the capital to rework this and what the AFE for each well is? My guess is it may be around $25,000 per well AFE.
KY wells typically do not have significant reserves but they can produce for years with a steady rate. Even modest success and demonstration of new production positions CAMS to make a stronger move and a good ROI for us. JMHO
Great read AS and interesting points. Many people think just cause oil is selling at high prices that the margins are way up. In fact everything from the cost of labor to even C02 as you pointed out increases along with the price of oil.
Certainly there is still a lot of upside for oil E & P companies but the EOR economics are critical to the success. I think the most likely scenario here is that they will push for the sale, the reserves and NOL option is very attractive for the right company and with Latimer's connections this should not be difficult.
All very interesting points to help make the case for this one as a comeback or bounce play. I think it will find a base here somewhere soon maybe even in the $.11-.13 range. The risk / reward scenario makes it very attractive based on his track record alone.
I have had some experience with both gas injection and water flooding. I think it depends more on where the play is and what has been best known for working in that geological picture.
Some key points about gas injection:
Gas reinjection is presently the most-commonly used approach to enhanced recovery. In addition to the beneficial effect of the pressure, this method sometimes aids recovery by reducing the viscosity of the crude oil as the gas mixes with it.
Gases used include CO2, natural gas or nitrogen. Air cannot be used to repressurize the reservoir because the oil will quickly catch on fire.
Oil displacement by carbon dioxide injection relies on the phase behaviour of the mixtures of that gas and the crude, which are strongly dependent on reservoir temperature, pressure and crude oil composition. These mechanisms range from oil swelling and viscosity reduction for injection of immiscible fluids (at low pressures) to completely miscible displacement in high-pressure applications. In these applications, more than half and up to two-thirds of the injected CO2 returns with the produced oil and is usually re-injected into the reservoir to minimize operating costs. The remainder is trapped in the oil reservoir by various means.
Some key points about water flooding:
Flooding an oil field with extraneous water has been a widely accepted method for increasing a reservoir's recovery since the 1950's, but to the uninitiated it may seem odd. After all, water production is a bad thing; it increases lifting costs, puts more strain on equipment, and may even prevent flowing wells from flowing. Plus, the produced water must be dealt with in an environmentally sound way, which also adds to the operating costs.
So why add water? For two reasons: First, injecting anything into a reservoir will increase the reservoir pressure, and second, water and oil don't mix. This second reason may again seem odd, but because they don't mix water, under higher pressure, will displace the oil it contacts.
So what does this mean? First we need to understand that most oil reservoirs are solution gas drive reservoirs*. This means as the oil is produced the reservoir's pressure is reduced and the gas that was held in solution begins to breakout and expand, thus "driving" the oil towards the producing wells. This is a familiar process we see when opening a bottle of soda (Mentos added for emphasis).
The problem with a solution gas drive reservoir is when the gas breaks out of solution it is free to flow to the producing well and be produced, and once the gas is produced the reservoir's energy is lost. Typically a solution gas drive reservoir will only recover 5-20% of the reservoir's original volume of oil leaving a large portion behind.
By injecting water in a controlled manner, the loss of reservoir pressure can be controlled and reversed. Water is injected into dedicated injection wells strategically located throughout the reservoir, and the water itself can be used to displace the remaining oil towards the producing wells. If properly designed and operated, a water flood can double the reservoir's oil recovery.
Even with double the recovery (10-40%), we are leaving large volumes of oil behind in these solution gas drive reservoirs, and with the ever-growing oil-thirsty economies around the world we need to do better. This is where enhanced oil recovery (EOR) techniques come to play, but that discussion is for another day.
This all sounds great and water flooding has been used successfully for decades, however, it is important to take care to design and operate the flood appropriately, otherwise all the bad things we mentioned at the beginning may be all you get. There are may factors to consider when designing a successful water flood including:
reservoir permeability (both absolute and relative)
beginning and ending fluid saturations (oil, water and gas)
reservoir heterogeneity
oil gravity and viscosity
water source and compatibility
formation clay content
depth and lifting costs
But if done right, a well run water flood will significantly improve oil recovery and produce attractive returns for many years.
Some additional points to consider:
Lucas Energy is a small company with a market cap of $38.72 million. The stock trades with a price of $1.80. On March 1, the stock was trading at $2.09 and on March 7, the stock traded at 52-week highs of $5.23.
The company recently released operating and quarterly results in which the company posted a high net loss despite having increased sales in crude oil and natural gas. The company's inability to produce a profit despite sales demonstrate operational issues.
Seems he is likely just putting together the right deal for CFW and its shareholders. You said it took him 2 years though last time?
Seems to want to grow some legs here for year end. The company seems to have a good position going into 2012 from here. It still has a speculative edge here but a 50% + move is not uncommon for deals like this.
The price has become much more attractive since its summer declines. The chart seems to have found a sideways pattern and is likely to hold up these levels which prepping for their 2012 plans.
I like KWK mainly because of its model which engages in the acquisition, exploration, development, production, and sale of natural gas, natural gas liquids, and oil onshore in North America. It focuses primarily on unconventional reservoirs in fractured shales, coal beds, and tight sands.
The company’s “normalized” financial position depicts a healthy picture as the topline of the company grew consecutively during the last five years, depicting average annual growth of 24%. In terms of profitability, though the company suffered considerable losses in 2008 and 2009 by virtue of extensive losses on sale of investments and “unusual” items ($1 billion in each of these years), KWK registered a $430 million profit in 2010.
The stock comes last in my list with a negative 42% return since the start of January majority of which occurred in the five trading sessions (from August 2003) leading to its second quarter results date (August 2008) which saw KWK losing three-tenths of its value.
This has landed the stock in a very attractive category as, despite expectations of a soft second half in terms of earnings, the long term potential in the company remains intact.
Spread the knowledge my friend. Together we can be informed and make smart investment decisions.
Thanks CW it is such an interesting sector right now in generate from the 600 BOPD wells in South Texas to the gas boom in North Dakota, the Utica Shale is another fantastic opportunity.
I like it at this valuation. The chart looks good setting up for the year end. I don't think there is anything substantial to move this either direction in that period of time but has good potential for a solid ROI going into 2012. JMHO
Those discount firms are very tough to deal with if you intend to deposit any stocks for new companies or compensation. Most won't even take Pink or OTCBB. You have to use more full service firms which of course the fees are higher.
I do like most of the changes they have been implementing as it does weed out some of the trash and opens up more opportunities for those that work hard and have ethics.
I agree with your opinion here. I think this company has excellent potential for 2012 and it is clearly a hidden gem as I don't think the investment community is even aware of this one yet judging by lack of volume over the last few months.
I will be posting more DD here but think it has the recipe to show investors a good ROI from these levels.
Yeah I was thinking they may of been talking about a minimum share price which a split would help. Losses are only fixable through selling assets or getting a capital injection to develop their holdings. Going to be interesting to see what Latimer does as I don't see him taking it to Pinks either.
Yeah the delisting may be less of an issue if he is going to package it up and sell the company which could show a good return for current shareholders at these prices.
Continued negative pressure here today and I think this will likely keep up through the end of the year as you pointed out. Going to keep a close eye on it and buy on the dips.
I have faith in Latimer too, watching and waiting.
Yeah at this point the trigger will be positive developments in the form of new production or acquisitions. Doing more DD myself will keep posting whatever I come up with.
MGP thanks for your kind words but I am simply a man with some ideas like the rest of us. I will be sure to share some of these ideas with the group. I know of a reverse merger/acquisition coming up that will be a short to mid term play at the very least. Will post some DD once my NDNC agreement clears me to do so.
MGP thanks for your kind words but I am simply a man with some ideas like the rest of us. I will be sure to share some of these ideas with the group. I know of a reverse merger/acquisition coming up that will be a short to mid term play at the very least. Will post some DD once my NDNC agreement clears me to do so.
Thanks ATW I like the potential risk/reward scenario here. Chart seems to have found a bottom but volume is pretty low. If they move forward with these projects it could turn into a nice play.
I will see if we can reach back out to them. Potential to do well is here maybe they just need some help getting it organized. Will be staying tuned.
In case my question was misconstrued what I was asking was about the operator status and compliance issues was intended to be proactive. If they have someone to operate and the TRRC clears the way to production I would jump back into this myself. GLTA
Utica Shale boom. Posting some recent articles here:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68714693
You got that right!!
‘Fracking’ permits booming
Interest in natural gas embedded in Ohio shale shifted from talk to action in a big way in recent months.
Of the 45 horizontal-drilling permits that have been issued for Ohio’s Utica shale formation, more than half were issued since July. It’s the latest sign of the state’s boom in oil and gas exploration.
The figures, compiled by the Ohio Department of Natural Resources, show the rapid increase in the potential for the type of wells often associated with a controversial drilling technique known as hydraulic fracturing, or “fracking.”
A total of 27 permits were issued from July to September.
http://www.dispatch.com/content/stories/local/2011/10/13/fracking-permits-booming.html
Ohio’s looming natural gas boom is luring new investors
One more indication that Ohio is poised for a multibillion-dollar oil and gas boom is new information that companies from Texas and Michigan are making offers to buy up existing royalty rights from landowners.
The companies are offering cash — up to $250,000 in some cases — in exchange for the landowners’ royalties on future natural gas production.
The companies are gambling that they can make more money in the long run than they are spending up front to purchase the royalties on existing and future wells.
The fact that such companies are active in Ohio in the last few weeks is additional proof that Ohio is on the verge of a major natural-gas boom made possible by deep, horizontal drilling and fracturing in the Utica shale under the eastern half of Ohio. That boom may produce tens of billions of dollars of natural gas, oil and natural gas liquids: ethane, butane and propane.
Drilling companies have been securing leases on thousands of acres for the purpose of sinking wells. In some cases, property owners become members of an aggregation, joining other landowners to negotiate for the best offer possible.
http://www.ohio.com/news/local/ohio-s-looming-natural-gas-boom-is-luring-new-investors-1.243831
Do you know what the compliance requirements consist of? I would imagine share price may be one, do you expect a reverse split?
Eager to see what kind of stock can be picked up at a further discount with tax loss selling. Do you think it may make any moves before year end?
That is impressive. Have they made any statements of what their plan of attack is on making acquisitions and developments?
I read the news, another step in the right direction. I was wondering if the operator cleared up the TRRC issues cause that would clear the way to actual production.
Haha thanks friend. I think this is a good hold through 2012.
GGR is in play again. Posted recent chart and financial results here: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68714367