DYOLF / DOL.to appears undervalued.
from website:
"Dynamic Oil & Gas, Inc. is a rapidly growing, TSX and NASDAQ small cap, natural gas based energy company with a strong position in Western Canada. With natural gas and natural gas liquids making up well over eighty percent of it's proven reserve base, Dynamic has a strong commitment to this secure, clean, and abundant energy source."
Share structure:
21,311,112.... 6/30/2003 shares
1,064,667.... options
1,050,666.... royalty purchase
23,426,446.... total dilutive shares
Thus, at 6/30/03, DYOLF had a market cap in excess of C$100M.
President & Chairman owns 5.43% of shares, all officers/directors own about 10% of company.
President and other insiders converted thier 1% royalty into 1.05M shares, C$6.5M or C$5.25 per share. Based on annualizing the 2Q03 royalty paid of $471K = C$1.884M/yr., this works out to 3.46 times payback which appears reasonable.
EPS was $.23 for the first half 2003. Thus, selling at 11 PE ratio fully diluted at current market price of C$5.00
Canaccord Projects Cash Flow Per Share as:
2003... C$1.48..... price to cash flow = 3.38 times
2004... C$1.32
DYOLF had average production rate of 3,207 boe/d and exited 2Q03 at 4,150 boe/d. DYOLF goal is a exit rate as of 12/31/03 at 5,200 boe/d. That represents a 25% growth rate form the 2Q03 or annual growth rate of 50%.
It appears only some of the reserves from Cypress/Chowade were included in the 12/31/02 reserve estimate as certain wells had not been fully tested. Thus, there should be upside remaining from last year to increase proven reserves plus the apparently positive drilling results achieved thus far this year.
The company is really "under-owned" by institutions, but hopefully this will change... see ownership link, institutions apparently own less than 5% of shares outstanding.
DYOLF likely will report 3Q03 results this week, so we can determine whether it is making progress or not...
