Novus Energy : China Connection ? Jack A. Bass Managed Accounts

Novus 2
Novus 2 (Photo credit: Wikipedia)

Novus Energy* (NVS : TSX-V : $0.86)
Chinese buyers emerge? The Hong Kong Economic Times reports that China-based Yanchang Petroleum International Ltd.
plans to acquire Novus Energy for C$500 million (or ~C$2.00 per share). At the time of this writing, Yanchang shares remain
halted in Hong Kong and Novus was halted on the TSX Venture Exchange. Recall, Novus reported Q2/13 results last week and commented on its ongoing value maximization process.

The company confirmed that it is currently in exclusive negotiations with respect to a potential transaction. In that regard, Novus received an order of the Court of Queen’s Bench of Alberta, as well as confirmation from the TSX Venture Exchange, that it may delay its annual general meeting of shareholders until October 24, 2013. This may save the company the expense of holding an additional meeting, should the company undertake a transaction which requires shareholder approval. On December 4, 2012, Novus announced that it had retained 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 company cautions that there can be no assurance that a potential transaction will result from the current negotiations, and Novus does not intend to disclose future 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 or required.

Novus’ Q2/13 production averaged 3,452 boe/d (80% liquids) falling short of Canaccord  forecast of 3,844 boe/d and consensus of 3,939 boe/d. Production was down 15% quarter-over-quarter due to weather conditions which adversely affected its field operations. Second-quarter CFPS of $0.07 was commensurately below Toth’s estimate and consensus of $0.08 given reduced production volumes.

The company has ramped up activity in Q3 with current production of 4,050 boe/d. Subsequent to June 30, Novus has drilled an additional 17 wells in the Dodsland area with continued focus on well costs that have averaged ~$875,000.

Safe Bulkers Raises Returns On Jack A. Bass Managed Accounts

The Justice Society Returns
The Justice Society Returns (Photo credit: Wikipedia)

1 % monthly payouts are not effected by this rise in (any) particular holding.



Above Average
As of 22 Aug 2013 at 12:46 PM

ATHENS, GREECE — (Marketwired) — 08/21/13 — Safe Bulkers, Inc. (the “Company”) (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three- and six-months period ended June 30, 2013. The Company’s Board of Directors also declared a quarterly dividend of $0.05 per share of common stock for the second quarter of 2013.

Summary of Second Quarter 2013 Results

  • Net revenue for the second quarter of 2013 decreased by 12% to $41.4 million from$47.0 million during the same period in 2012.
  • Net income for the second quarter of 2013 increased by 14% to $24.6 million from $21.5 million, during the same period in 2012. Adjusted net income(1) for the second quarter of 2013 decreased by 36% to $15.1 million from $23.7 million, during the same period in 2012.
  • EBITDA(2) for the second quarter of 2013 increased by 14% to $36.1 million from $31.6 million during the same period in 2012. Adjusted EBITDA(1) for the second quarter of 2013 decreased by 21% to $26.6 million from $33.7 million during the same period in 2012.
  • Earnings per share (“EPS”) and Adjusted EPS(1) for the second quarter of 2013 of $0.32and $0.19 respectively, calculated on a weighted average number of shares of 76,679,328, compared to $0.28 and $0.31 in the second quarter 2012, calculated on a weighted average number of shares of 76,653,848.
  • The Company’s Board of Directors declared a dividend of $0.05 per share of common stock for the second quarter of 2013.

Transocean : Ichan Creeps Up

English: Transocean Wildcat (Aker H-3 design) ...
English: Transocean Wildcat (Aker H-3 design) drilling rig in Cromarty Firth, Scotland. (Photo credit: Wikipedia)


RIG : NYSE : US$58.17
I wonder what Bill Ackman thinks?

Carl Icahn disclosed his stake in Transocean increased to 5.6% late Friday, sending shares of the offshore driller higher. Additionally he has asked management to declare a dividend of at least $4 per share, and has said that if the company doesn‘t, he will propose it at the next shareholder meeting. He said, in a filing, ―Under Swiss law and the Issuer’s Articles of Association, a shareholder has the right to propose a dividend at a company’s annual meeting, and if a majority of shareholders support the proposal, the dividend is declared, whether or not the company’s board supports such  proposal.

Transocean responded in a statement that read, ―We will review Mr. Icahn’s filing carefully and respond in due course. We appreciate the opportunity to hear from our shareholders and look forward to continuing a dialogue with Mr. Icahn.

As always, the Transocean Board of Directors will set dividend policy on the basis of financial prudence and the best interest of
shareholders.‖ Transocean initiated a dividend in 2011, but was forced to abandon the payouts in an effort to maintain its
balance sheet and investment-grade rating on its debt

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

KIT digital BUY Target $ 5

KIT Digital Logo
KIT Digital Logo (Photo credit: Wikipedia)

KIT digital |
KITD : NASDAQ : US$3.00   Target US$5.00

Aug 15
• Q2: messy, but positive trends
As expected, the KITD results were somewhat disappointing and 2012 guidance was reduced. This could put pressure on the stock. That said, there were some positives:

1) a higher percent of revenue (sequentially) was from large-scale

2) 61% gross margin was in line with our estimate;

3) OH is expected to rationalize going forward.

On the company’s earnings call, management was upbeat about its prospects and seemed reinvigorated by the recent strategic
review. Financials could continue to be impacted by efforts to right-size the company, which had expanded with M&A activity. Longer term, we still expect KITD will exploit the increasing global demand and supply for non-linear video.
• H2/12 expectations: Revenue guidance of $215m-$230m (down from $250m and our $260m estimate) implies $108m-$123m in 2H12. The backlog of $75m as of Q2/12 suggests $33m-$48m in incremental customer sales. Q3/12 normalized EBITDA BE “guidance” was not reiterated and we expect therefore not likely. Similarly, Q4/12 FCF BE was not reiterated. But with the company taking steps in the next month to rationalize OH, FCF BE could be possible in Q1/13.
• Fewer surprises. After extensive work with auditors (and the Q2/12 impairment charges), management indicated likelihood of fewer surprises
going forward. The company feels comfortable about its liquidity position and suggested that there were alternatives (i.e., debt facility) non-dilutive to shareholders that they could  access if needed

Agrium – BUY ; Farmers Will Be Aggressive – Target $ 113

East view of the Viterra plant site, Edmonton,...
East view of the Viterra plant site, Edmonton, Alberta, Canada. (Photo credit: Wikipedia)

Agrium Inc. 
AGU : NYSE : US$95.24 Buy , Target US$113.00 

August 7
• Q2/12 results in line; share repurchase announced; maintaining BUY rating; increasing target to US$113.00 (from US$106.00)
Investment recommendation
We expect the robust outlook for grain prices to continue through at least to the next spring planting season in the US. As a result, we anticipate robust retail earnings for Agrium combined with solid wholesale segment earnings over the next twelve months. We continue to believe that farmers will aggressively plant crops with normalized usage of crops inputs in most regions. We also appreciate
the company’s efforts to return cash to shareholders.

The announced C$900 million share repurchase program in addition to the announced dividend increase in July signals this improved effort.
Investment highlights
• Agrium reported adjusted Q2/12 EPS of US$5.47 versus our estimate of US$5.44, the consensus at US$5.45 and guidance of US$5.40-5.50.
• Agrium announced that it had entered into an agreement to sell Viterra’s 34% interest in the Medicine Hat nitrogen facility to CF Industries for C$915 million.
• The Board of Directors authorized a Dutch auction to repurchase C$900 million in common shares from early September to mid-October.
We continue to rate the shares of Agrium a BUY, but have increased our 12- month target price to US$113.00 (from US$106.00) based upon an 11x multiple to our 2013E EPS of US$10.24

UEX – Is It On The Cameco Shopping List ?

Cameco (Photo credit: Wikipedia)

UEX Corp.* (UEX : TSX : $057


Attractive price / Spec


Shares of UEX spiked Tuesday July 17 morning, as investors jumped into shares of the Athabasca-focused junior uranium explorer.

In a July 16 filing, it was reported that a member of UEX’s Board of Directors purchased 22,400 shares of the company in the public market on July 13 at a price of $0.50 per share. In late May, following the filing of a short form prospectus to raise up to US$1 billion by Cameco (CCO), the likes of UEX (which is ~23% owned by CCO),  Denison Mines DML) and Paladin Energy (PDN)  were in the spotlight as speculators and analysts attempted to rank the front-runners on a possible Cameco shopping list. The takeover talk frenzy has settled down in recent weeks.

Getting back to business, most recently on the exploration front, UEX and partner AREVA announced the results from its first three directional drill holes from the continued exploration of the Colette Deposit on the Shea Creek Project. The new results continued to outline thick unconformity mineralization at Colette. Shea Creek hosts the Kianna, Anne, Colette and 58B deposits and is one of UEX’s ten 49%-owned Western Athabasca Uranium Projects joint-ventured with AREVA.

At the conclusion of the 2012 exploration program, UEX intends to update its mineral resource estimate for Shea Creek to include the results from the 2010, 2011 and 2012 drilling campaigns