One also needs to account for the US/Canadian exchange rate fluctuations.
Canadians look at cashflow as the best metric for junior energy companies, so looking at earnings to estimate whether or not the shares will appreciate is not too valid a metric. But if that's what makes you comfortable, go for it.
And it is production growth that is usually the key driver, not commodity prices. Production growth (or lack of it) usually trumps commodity prices. If Rival exits at 1200 boed, just extrapolating Q3 numbers, that's $0.20 CF. And presuming modest success in '06 with their expanded capex (say 1500 boed ave), that's ~$1 fully dilluted CF.
Typical Canadian juniors trade 4x-8x FDCFPS. Juniors such as Rival will trade at the low end due to uncertain management and land/growth issues.
Still, 4x cf = $4 in '06, which is a double from here. I was kicking myself when I passed up buying at $0.90 earlier in the year (even though I figure the company was worth $2 based on cf) and saw it run to $1.80 or so a few months ago. When it came back down to the $1.30 range a few weeks ago, I started buying. And when earnings came out, I bought a ton at ~$1.50.
I would expect nitwits to take profits after this runnup, especially if oil or gas prices drop. But that is a temporary buying opp imo.
