Replies to post #27 on Double Eagle Petroleum (DBLE)

[OilStockReport]

Such a great small cap stock.

Double Eagle Petroleum (Nasdaq: DBLE )
Double Eagle is a small exploration and production company whose main assets are in the Atlantic Rim and the Pinedale Anticline in Wyoming. For a company with such a small market cap, Double Eagle already produces very strong cash flows. It generated $25 million in operating cash flow in 2010 alone, compared to its market cap of just $94 million as of yesterday's close. That's less than four times cash flow!

What's more, this company has amassed more than 70,000 net acres in the Niobrara shale. While this company's cash flows and reserves consist mainly of natural gas, Double Eagle may add a meaningful amount of oil to its production and reserve mix as it starts to explore its Niobrara acreage.

[OilStockReport]

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.