All posts tagged Alberta

Twin Butte Energy Ltd.

Official seal of Lloydminster

Official seal of Lloydminster (Photo credit: Wikipedia)

TBE : TSX : C$2.12
BUY 
Target: C$3.20

COMPANY DESCRIPTION:
Twin Butte Energy Ltd. is an intermediate producer focused on heavy oil development along the Lloydminster fairway of Alberta and Saskatchewan. The company adopted a yield plus modest growth strategy upon closing its acquisition of Emerge Oil & Gas in early 2012.

Investment recommendation
Twin Butte released first quarter results largely in line with its guidance and CG/consensus estimates. Despite headwinds from wide heavy oil differentials, strong condensate prices that factor in its blending costs, adverse weather, and isolated production challenges at Primate, Twin Butte maintained a payout ratio below 100% with average production down only 1.6% QoQ. We have maintained our BUY rating on the stock and target price of C$3.20, based on a 1.0x multiple to NAV and reflecting a 2013 EV/DACF multiple of 6.8 times.
Investment highlights
Q1 in line, no surprises. Production averaged 17,254 boe/d, in line with our estimate of 17,326 boe/d and consensus of 17,190 boe/d. CFPS of $0.13 was also in line with our $0.13 and consensus of $0.12.
Prudently scaled back CAPEX in January but narrowing differentials could enable re-acceleration in H2/13. Capital spending was previously scaled to $85 million (from $110 million) given isolated issues at Primate and widening heavy oil differentials. Given an improved differential outlook, we see potential for a H2/13 CAPEX increase of $5 to $10 million.
Payout ratio remains best in class; current dividend is solid. Twin Butte maintains one of the lowest total payout ratios amongst the high yield Intermediate E&P group with a total payout ratio pre/post DRIP of 100/95% on our 2013 estimates.
Valuation
Twin Butte trades at a 0.7x multiple to CNAV, a 5.2x EV/DACF multiple and $41,800 per BOEPD based on our 2013 estimates, compared to peer group averages of 0.7x CNAV, 7.8x EV/DACF and $64,400/BOEPD.

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by jackbassteam on May 16, 2013  •  Permalink
Posted in Energy, Intermediate
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Posted by jackbassteam on May 16, 2013

http://amp2012.com/2013/05/16/twin-butte-energy-ltd-2/

Veresen Inc.

VSN : TSX : C$13.40
BUY 
Target: C$14.00

COMPANY DESCRIPTION:
Veresen Inc. is an energy-focused company with operations in the pipeline, power and NGL businesses. Veresen holds a 50% interested in the Alliance Pipeline and wholly owns the Alberta Ethane Gathering System. In the midstream business the company has a 42.7% interest in Aux Sable and 100% interest in Hythe/Steeprock gas gathering and processing complex. It also owns several power generation entities in Canada
and the United States.
All amounts in C$ unless otherwise noted.

SOLID Q1/13 DESPITE LOWER NGL FRAC SPREADS
Investment recommendation
Veresen reported first quarter recurring cash flow of $0.25 per share, modestly above our $0.23 estimate and just below the $0.26 consensus
estimate. We note that our recurring cash flow calculation removes about $0.02 per share of funds that were released from a reserve account at the East Windsor cogeneration facility. Both the Hythe/Steeprock natural gas processing facilities and the Power business delivered solid results. As expected, continued low ethane and propane-plus margins negatively impacted cash flow in the first quarter although Aux Sable generated $6.3 million (or ~$0.03 per share) of margin based cash flow that was not recognized in the quarter. If frac spreads remain at current levels or improve during the remainder of the year, we expect the company could recognize in excess of $0.12 margin based cash flow from the first quarter and from remainder of the year.
The company has narrowed its 2013 distributable cash flow guidance range to $0.97 – $1.15 per share from $0.92 – $1.19 per share, previously. While we are making no changes to our 2013 and 2014 CFPS estimates, we are raising our target price modestly to C$14.00 from C$13.50 to reflect stabilizing NGL fractionation spreads (and our view that frac spreads will improve modestly through the year) and to account for some liquids rich natural gas transportation contracts the company has signed on Alliance Pipeline.
Valuation
Our 12-month target price is based on a net asset value approach and a combination of sum-of-the-parts valuation. NGL fractionation margins
are volatile and difficult to predict, and we have assumed longer-term fractionation margins are below the average of the last three years.

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by jackbassteam on May 10, 2013  •  Permalink
Posted in Pipelines
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Posted by jackbassteam on May 10, 2013

http://amp2012.com/2013/05/10/veresen-inc/

Paramount Resources Ltd.

Drilling companies most often lease the rights...

Drilling companies most often lease the rights to drill for and produce oil. (Photo credit: Wikipedia)

POU : TSX : C$35.44
BUY 
Target: C$44.00

COMPANY DESCRIPTION:
Paramount has a 35-year history of successful operations in Western Canada. It takes a long-term approach to exploration and development activity of both oil and natural gas, and boasts over 50% insider ownership. Near-term growth is focused in the Deep Basin of Alberta.
All amounts in C$ unless otherwise noted.

Investment recommendation


Paramount reported Q1/13 results largely in line with CG/consensus estimates. The company remains capacity constrained at Valhalla; however, third party restrictions have begun to abate at Musreau leading to potentially higher volumes near term. Construction of its Musreau deep cut gas plant remains on time and budget.

We have increased our expected NGL yield on its Resthaven Montney gas wells given increased long term confidence by the company, which plans to add a 12,000 bbl/d expansion to the condensate stabilizer system at its Musreau plant in 2014 at a cost of $35 million. We are increasing our
target price to C$44.00 (from C$40.00) based on a commensurately higher NAV estimate and an unchanged 1.0x multiple, while also increasing our rating to BUY (from Hold), given a potential return to target of 24%.
Investment highlights
Q1 a slight beat; third party constraints abating. Q1 production averaged 22,591 boe/d, largely in line with CG/consensus of 22,186/22,375 boe/d.
Operating CFPS was $0.15, also in line with CG/consensus of $0.16 and $0.17. March production averaged 23,600 boe/d, a record volume.
Step change in growth approaches; contemplating another step. Its 200 MMcf/d Musreau deep cut plant remains on schedule for commissioning
in late Q3. Additionally, it now plans to add a 12,000 bbl/d expansion to the condensate stabilizer system in 2014 to handle higher condensate
yields. Finally, Paramount is in preliminary stages of planning an additional natural gas processing plant for its Deep Basin core area.
Valuation
Paramount currently trades at a 0.8x multiple to CNAV, 33.4x EV/DACF, and $169,200/BOEPD based on our 2013 estimates, versus peer group
averages of 0.7x CNAV, 9.9x EV/DACF, and $75,600/BOEPD.

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by jackbassteam on May 9, 2013  •  Permalink
Posted in Oil
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Posted by jackbassteam on May 9, 2013

http://amp2012.com/2013/05/09/paramount-resources-ltd/

Capital Power Corporation A Questionable Strategy

English: Capital Power Corporation logo

English: Capital Power Corporation logo (Photo credit: Wikipedia)

CPX : TSX : C$21.64
HOLD 
Target: C$23.00

COMPANY DESCRIPTION:
Capital Power has interests in 16 facilities across North America, with about 3,600 MW of net owned or operated power generation capacity as well as 371 MW of capacity owned through power purchase agreements (PPAs). The company has an additional 595 MW of capacity under construction or in advanced development.

Investment recommendation


Capital Power reported first quarter recurring earnings of $0.36 per share, modestly below the $0.39 consensus estimate and well short of our $0.45 expectation. There were two main drivers behind the earnings miss versus our expectations. One factor is a lower than expected contribution from the New England assets with market fundamentals that continue to challenge profitability. The second factor is reduced Alberta portfolio optimization revenues despite a higher average spot price in the quarter. It appears that the New England facilities will continue to be impacted by lower market conditions, and we are adjusting our 2013 EPS estimate by $0.10 to $1.35 to reflect this earnings drag. Our lower 2013 EPS estimate also reflects our expectation of lower Alberta portfolio optimization earnings for the full year. Additionally, we question the company’s strategy of selling newly constructed or purchased assets to fund the development of its interest in the Shepard facility. We are lowering our target price by $1 to C$23.00. Our HOLD rating is unchanged.
Valuation
Our target price is based on a combination of valuation metrics, which include dividend and earnings yields relative to long-term interest rates, dividend discount models, and earnings and cash flow multiples relative to both historical valuation and its power and pipeline peers.

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by jackbassteam on May 6, 2013  •  Permalink
Posted in Pipelines
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Posted by jackbassteam on May 6, 2013

http://amp2012.com/2013/05/06/capital-power-corporation-a-questionable-strategy/

Twin Butte Energy Ltd

A workover rig.

A workover rig. (Photo credit: Wikipedia)

TBE : TSX : C$2.05
BUY 
Target: C$3.10

COMPANY DESCRIPTION:
Twin Butte Energy Ltd. is an intermediate producer focused on heavy oil E&D activity within the Lloydminster fairway of Alberta and Saskatchewan. The company adopted a yield plus modest growth strategy upon closing its acquisition of Emerge Oil & Gas in early 2012.

Investment recommendation


Twin Butte announced its 2012 year-end reserves and an operational update. Its reserve additions and FD&A costs ($24/boe) were in line with
expectations and prior management guidance. From our perspective, the clear takeaway from the release was the workover and performance
update at Primate, where production is up month-over-month to 2,600 boe/d; this should alleviate market concerns over recent production
performance and in our opinion provide a positive tailwind for the stock.
Our NAV estimate drops modestly based on our roll-forward; therefore, we have trimmed our 12-month target price to C$3.10 (from C$3.15)
and maintain a BUY rating on the stock. Our target is based on a 1.0x multiple to NAV and reflects a 2013E EV/DACF multiple of 7.1 times.
Investment highlights
Primate update the key takeaway from the release. Its January 31 update on Primate prompted a massive pullback on the stock; however, the company has announced that production has stabilized at 2,600 bbl/d through February (up from ~2,500 boe/d) given workover efforts,
including installation of five oversized pumps on existing wells (high volume lift). Its operational capabilities are also confirmed by our review
of Frog Lake performance on pages 6 and 7 of our note. Reserve update was in line with expectations. All-in FD&A of $24/boe and a 1.0x recycle ratio were in line. It had 5.3 mmboes of positive extensions (mostly Waseca and Avalon), and it booked 1.6 mm boes at Primate, versus 1.1 mmboes last year with 1.0 mmboes of production.

Valuation
Twin Butte trades at a 0.7x multiple to CNAV, a 5.2x EV/DACF multiple, and $41,200 per BOEPD based on our 2013 estimates, compared to peer
group averages of 0.7x CNAV, 10.6x EV/DACF, and $73,500/BOEPD

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by jackbassteam on March 1, 2013  •  Permalink
Posted in Alberta, Energy
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Posted by jackbassteam on March 1, 2013

http://amp2012.com/2013/03/01/twin-butte-energy-ltd/

RAY SMITH PRESIDENT AND CEO OF BELLATRIX EXPLORATION – update

Sunset in Central Alberta

Sunset in Central Alberta (Photo credit: HandsLive)

RD:  Ray, where are you at for production right now?
RS: We exited the year at 19,500 barrels equivalent so for four consecutive years we have met our guidance for annual and we have met our guidance for exit rates. We expect to average around 20,000 for the first quarter plus or minus and continue to grow as we go through the year and
target end of the year at over 31,000.

RD: How much of that is oil and liquid rich?
RS: It’s all oil and liquid rich. We are staying on the liquid side between 32% and 35%, depending what is on and what’s off on any given quarter. We don’t expect that to change much. But what we are drilling is hugely profitable, whether it contains gas or not. So for example the Notikewin/Falher play in Central Alberta using new technologies that we are using on our latest group of wells, have been giving between 6 and 8 BCF per well or coming  on at 12 to 15 MCF/day with 35 barrels per million of liquids. These wells are producing in the first 90 days of production a BCF of gas. The finding costs are $0.60, the lease operating costs are $0.60 – that is $1.20 all in and our liquids alone have recovered $3.25. Hugely profitable.

RD: All I ever hear is Alberta Oil and Gas – no one interested. What do you say to those investors?
RS: I think a lot of that has to do with the overall energy market, the fact that a lot of companies have balance sheets getting in distress which has caused the companies to start selling assets and reduce values. We have had a weak gas environment in North America and western Canada is predominately a gas market, but there are only a few gas plays that are still drillable at these weak gas prices that have a great rate of return. So it’s like saying I don’t like cars anymore

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by jackbassteam on February 18, 2013  •  Permalink
Posted in Alberta, Energy, Oil
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Posted by jackbassteam on February 18, 2013

http://amp2012.com/2013/02/18/ray-smith-president-and-ceo-of-bellatrix-exploration-update/

Pinecrest Energy Insider Buying

Red Earth Creek, Alberta Location

Red Earth Creek, Alberta Location (Photo credit: Wikipedia)

PRY

 TSV : $1.19

According to new insider filings, Wade Becker, President & CEO of Pinecrest Energy, bought 400,000 common shares of the company through the public market at a price of $1.15 on February 13. In addition, Dan Toews, CFO, also purchased 150,000 common shares through the public market at a price of $1.15 on February 13.

Last week, PRY approved a $136-million budget for 2013, focusing on the Slave Point light oil play in its greater Red Earth project in Alberta. The company said in a statement that the budget accounted for the drilling and completion of 24 for 30 wells targeting the Slave Point formation, in addition to tie-ins to pipelines and facilities. The budget also accommodates for waterflood schemes and maintenance. The company said itwould be financed with a combination of cash flow and the company’s expanded credit facility. In a move to accelerate the  implementation of the waterflood schemes, PRY had drilled 12 infill horizontal wells in Q3/12 and Q4/12.

As well as the Red Earth project, the company has been approved to perform three additional waterfloods, at its Loon, Evi 3 and Otter projects. The Loon project is scheduled for injection in the middle of this month. PRY also reported that its first operated waterflood scheme, at the Evi 2 project, had resulted in oil production from the offset wells increasing from 95 barrels per day to 280 bpd. Year-to-date, PRY has fallen nearly 23%.

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by jackbassteam on February 18, 2013  •  Permalink
Posted in Alberta, Energy, Insider buys
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Posted by jackbassteam on February 18, 2013

http://amp2012.com/2013/02/18/pinecrest-energy-insider-buying/

Pineecrest Energy : Update

Red Earth (video game)

Red Earth (video game) (Photo credit: Wikipedia)

PRY :

TSX-V : $1.28
Pinecrest Energy has approved a $136-million budget for 2013, focusing on the SlavePoint light oil play in its greater Red Earth project in Alberta

The company said in a statement that the budget accounted for the drilling and completion of 24 for 30 wells targeting the Slave Point formation, in addition to tie-ins to pipelines and facilities. The budget also accommodates for waterflood schemes and maintenance. The company said it would be financed with a combination of cash flow waterflood schemes, Pinecrest had drilled 12 infill horizontal wells in the third and fourth quarters of 2012.

As well as the Red Earth project, the company has been approved to perform three additional waterfloods, at its Loon, Evi 3 and Otter projects. The Loon project is scheduled for injection in the middle of this month. Pinecrest also reported that its first operated waterflood scheme, at the Evi 2 project, had resulted in oil production from the offset wells increasing from 95 barrels per day to 280 bpd. 

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by jackbassteam on February 11, 2013  •  Permalink
Posted in Alberta, Energy, Oil
Tagged , , , , , , ,

Posted by jackbassteam on February 11, 2013

http://amp2012.com/2013/02/11/pineecrest-energy-update/

Bellatrix Exploration

Bellatrix Exploration

(BXE : TSX : $4.67)

Bellatrix has entered into a joint venture (JV) agreement with an unnamed South Korea-based company, to accelerate development of company’s extensive undeveloped Cardium land holdings in westcentral Alberta. Under the terms of the agreement, the JV partner will contribute 50%, or $150 million, to a $300-million JV to participate in an expected 83 Cardium well program.

Under the agreement, the JV partner will earn 33% of Bellatrix’s working interest in the Cardium well program until payout (being recovery of the JV Partner’s capital investment plus an 8% return on investment) on the total program, which is expected to occur prior to a maximum of seven years, reverting to a 20% working interest after payout. The effective date of the agreement is April 1, 2013 but with the ability of the JV Partner to elect to invest in the wells drilled between January 1 up to April 30, 2013.

Certain conditions precedent are expected to be satisfied or waived by April 22, 2013 which is expected to enable closing to occur on or before April 30, 2013. Bellatrix will be required to provide a guarantee of the return of the JV partner’s capital investment of up to $30 million if not recovered within seven years. As a result of the JV, Bellatrix’s net capital expenditure plan for 2013 is expected to increase from the previously announced $180 million level to between $230-240 million not including JV Partner capital. Based on the timing of proposed expenditures,
downtime from anticipated plant turnarounds, completion of anticipated infrastructure and normal production declines, execution of the increased 2013 capital expenditure plan is anticipated to provide average daily production of 24,000 to 25,000 boe/d.

The company is anticipating a 2013 exit rate of 30,000 to 31,000 boe/d. Bellatrix’s second long reach horizontal well (50% WI) drilled in Q4/12 has been placed on production at the following rates for IP30 rate of 944 boe/d (25% gas and 75% liquids).

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by jackbassteam on January 24, 2013  •  Permalink
Posted in Energy
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Posted by jackbassteam on January 24, 2013

http://amp2012.com/2013/01/24/bellatrix-exploration/

Novus Energy Trading Alert

We have been waiting for the stock overhang to be removed. The stock could not get up to $ 1.10 because there was always 400- 500,000 shares available below that price.

This despite the company having put itself up for sale with the opening circular of December 17,2012.

Todays New Release helped volume yo overcome the overhang.

Here is the news release:

CALGARY, Jan. 15, 2013 /CNW/ - Novus Energy Inc. (“Novus” or the “Company”) (TSXV: NVS) is pleased to report it has met its corporate exit rate production target of 4,200 boe/d for 2012.

Estimated field level production for the last week of December averaged 4,234 boe/d with approximately 78% of these volumes comprised of oil and liquids. Based on field estimates, average production during December was 3,925 boe/d and fourth quarter 2012 volumes averaged 3,530 boe/d.

During the fourth quarter of 2012, Novus drilled 24 wells (24 net), all of which were Viking horizontal oil wells in the greater Dodsland area.  Throughout 2012, Novus drilled a total of 72 wells (72 net) and completed 68 wells (68 net), all of which were Viking horizontal oil wells in the greater Dodsland area.

During the most recently completed quarter, Novus drilled, completed and placed on production three key successful wells to the west of its Flaxcombe field.  The Company is pleased with the wells’ performance and believe they have the potential to validate a substantial amount of the Company’s land.  The western most well drilled in this successful extension is situated over 12 miles from the Flaxcombe field.  In 2013, Novus has drilled and cased three additional wells in the region and expects to bring them on production during the first quarter.  Novus controls approximately 14.5 sections of land in the region and with continued development success, the Company believes this land block may materially add to its drilling inventory.    Â

Novus now controls 210 net sections of Viking rights in the Greater Dodsland area of Saskatchewan and the Greater Provost area of Alberta.

Value Optimization Process

On December 4, 2012, Novus announced that it had retained Cormark Securities Inc. (“Cormark”), as lead, and FirstEnergy Capital Corp. (“FirstEnergy”) as its financial advisors to assist the Special Committee of the Board of Directors in exploring and evaluating a broad range of options to optimize shareholder value.

The data room is now available for interested and qualified parties who have entered into a confidentiality agreement with Novus. The Company has not established a definitive schedule to complete its review and consideration of options to optimize shareholder value, and does not intend to disclose developments with respect to the process unless and until the Board of Directors has approved a specific transaction or otherwise determines that disclosure is appropriate.

LEVEL 2 with 1.3 million shares traded ( versus an average of less than 500,000 a day.

Level 2 Quote

r Shares Bid Price Ask Price Shares
40,500 1.090 1.100 62,300
11,600 1.080 1.110 57,400
37,500 1.070 1.120 50,100
34,600 1.060 1.130 28,000
27,000 1.050 1.140 26,000
32,200 1.040 1.150 35,800
51,000 1.030 1.160 1,200
172,300 1.020 1.190 28,400
9,000 1.010 1.200 24,600
62,500 1.000 1.210 11,000
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by jackbassteam on January 15, 2013  •  Permalink
Posted in Takeovers, Trading Alert
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Posted by jackbassteam on January 15, 2013

http://amp2012.com/2013/01/15/novus-energy-trading-alert-2/

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