Rival Energy Ltd (fka rgylf)

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QIS comments:
QIS CAPITAL Comments:

The year-end results are disappointing given Rival's momentum going into the fourth quarter; however, it is important to note that were are very few junior producers that got the rigs they wanted during Q4 as rig availability has been extremely tight over the past 6 months. Originally, the company had scheduled the drilling of 7 wells by the end of 2005 and also planned to tie-in another 100 boepd which was behind pipe. These activities did not occur prior to year-end due to rig availability and other delays. Rival also lost a few wells in late November which watered out prematurely.

Rival’s production should return to previous levels and regain record territory once drilling rigs have been secured and the company can implement on its drilling plans.

We were able to take some profit on Rival in the $2.30 to $2.50 range after an impressive run over the last 6 months of 2005. Now that the share price has drifted back to the $1.50 level, Rival is presently trading at only 2.5 to 2.7 times a more conservative cash flow forecast for 2006. It should also be pointed out that Rival has actually reduced its commodity price forecast for 2006, a move that will likely precede many other oil and gas producers