RANCHO SANTA FE,
California -- Here this morning with one of the energy-minded folks at Torrey Hills Capital. We are sharing notes.
I own so few energy developers -- oil, uranium, hydrothermal -- I can count them on one hand.
Energy is working for the home portfolio, just barely. One of the companies I track, and own, have owned for about a year now, is
Lynden Energy (
TSX:V.LVL,
Stock Forum).
The Calandra Report:
All of my personal holdings -- about 40 -- are listed under the
tcalandra heading for the Stockhouse
portfolio function, which is free. (I also own Yangarra Resources of Calgary, a Cardium well operator whose shares have doubled recently. One or two obscure uranium developers from Canada and Australia, including Lakeland Resources. A Cambodia prospector that is sniffing around prospective oil fields in that nation. And Rango Energy, an off-the-charts-high-risk real estate assembler in California's San Joaquin Basin. Of those, only Rango is, or was, a Torrey Hills client, but I bought my RAGO shares in the open market.)
I consult to
Torrey Hills Capital here, about a quarter-mile from the city of San Diego's northern border. As it happens, one of the firm's energy clients is Lynden, but I knew about the company, and followed it, years ago, when the now-late geologist Raul Madrid assisted in chairman and founder
Richard Andrews' exploration endeavours in Texas. Raul lived near me, in Napa County, California, as did (and does) Rich.
I remember Rich and Raul sprawling maps of Texas on the hood of some big, old truck in the breakfast joint parking lot we were at.
Clay Chase here at Torrey Hills has been tracking Lynden for years. As they say here in Rancho Santa Fe, which has cult-like devotion to golf, thoroughbreds, dressage and 25-for$5 bags of avocados, Mr. Chase drank the draught on Lynden years ago.
Lynden Energy calls Vancouver corporate home. The energy explorer controls 40,000 net/net acres in the Permian Basin of west central Texas.
At 8.0+ 2014 Ebitda range, Permian producers and explorers are lathering investors who seek ideas in the basin. Energy analysts throw estimates of 50 billion barrels remaining, recoverable oil (equivalent) for the basin.
Pioneer (
NYSE:PXD,
Stock Forum), Concho (
TSX:V.CXO,
Stock Forum), Laredo (
NYSE:LPI,
Stock Forum),
Diamondback (
NASDAQ:FANG,
Stock Forum), Athlon (
NYSE:ATHL,
Stock Forum) and others have seen major rises in market/share price values, Diamondback shares have tripled since their IPO in late 2012.
Lynden is a non-operator producer with current net/net production of around 1,200 BOE/day. Based on the capital budget and past drilling success, Clay Chase at Torrey Hills foresees 1,500 BOE/day in the near future ... giving it a multiple of 2 times
Ebitda. The peer group is trading as rich as 8.5 times 2014 Ebitda, my energy guy says.
Here is a chart; I don't think Lynden even makes the cheap end of the graph.
Lynden also controls a
Mitchell Ranch (Mitchell County) property, part of a larger parcel (110,000 acres) held with operator partner
Crownquest.
About a third of this land was farmed out to
Chesapeake Energy (
NYSE:CHK,
Stock Forum) in 2012.
Mitchell Ranch, located east of the Midland Basin region of the Permian, has the Pennsylvanian/Mississippian, Wolfcamp Shale (up to 5 benches), and the Cline Shale. "So with the company's core Wolfberry/Permian land anchoring both the share price ... the Mitchell Ranch position could be a game changer for shareholders," says my energy guy.
Lynden shares are priced at $0.82 Canadian, giving them a market worth of $94 million.
For sure, Torrey Hills benefits if Lynden shares rise. So there is this full disclaimer information at
https://www.babybulls.com/index.cfm/cdid/10297.
I am in no rush to sell the shares that I bought; they are a few cents in the money.
Clay Chase's full report is at
https://www.babybulls.com/index.cfm/page/Is-Lynden-Energy-Getting-Ready-to-Bask-in-the-Permian-Glow/cdid/12353/pid/10255.
BELLHAVEN: I already have received six or eight notes and two calls about BHV's proposed 5-cent financing, which could raise $1.3 million or so.
What can I say? I own 2.3 million shares of the Colombia and Panama prospector at an average above 20 cents Canadian. I still love La Mina and the surrounding area there for its respectable grades of porphyry gold and copper, with some silver.
Am I participating in the
Bellhaven Copper & Gold (
TSX:V.BHV,
Stock Forum) financing? Well, I have to report home first before I pony up any more money for the Belle, which I helped turned around 4 1/2 years ago along with Julio, Paul and Patrick and Millie. The shares went as high as $1 from 20 cents or so. I sold zilch in the run-up. That part should fill my cup to the brim with self-loathing.
Strangely, it does not. Now in Year 5, I accept our Belle like a mantra that clears my head. Losing money does that. So I have to wait a few more years for the London flat. So the kids only get two guitars and two pianos and one mountain bike each. So I only purchase two pairs of $140 running shoes each year instead of three.
Oh Screw!
I believe large
BHV shareholders are willing to keep their stakes intact, thus participating in the private placement of equity. This is what I hear, anyway. The large holders include
Iamgold (
TSX:T.IMG,
Stock Forum), a 12 percent or so holder of our Belle.
If metals equities continue higher, as they seem to be this month of October, a 5-cent purchase with an 8-cent warrant good for three years is a splendid proposition.
Bellhaven stopped drilling to conserve cash. But its compliant resource at La Mina, and estimated all-in costs for pulling gold, with byproduct credits, out of the Middle Cauca mineral belt of Colombia, appears to be among the lowest in Latin America. Maybe the world.
See the chart below.
Go seek out the press release about the offering yourselves. I do not want anyone to say I was distributing something that could make anyone in our
TCR audience as crystal clear-minded as a quartz vein running through granite. Or cutting through
caca for that matter.
Like I said, I probably am in for a little more, if my superiors and underlings at home do not toss the book at me this weekend.
Your friendly,
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