SCP - Due Dilly Finished DD on SCP. Any feedback is welcome!
Overall, even under conservative/liquidating scenarios I still see considerable upside at these price level, and I initiated a position in the company yesterday.
I hope management can liquidate some of the private holdings (they're being discounted almost 90% at these prices!). Any private liquidation should have an immediate and positive impact on the share price. Union Agriculture looks like the one to go. It's a mature business that has hundreds of other shareholders and a very savvy, money-raising, CEO.
Proform NAV (worst case) is $1.45 / share. Please keep in mind, I'm trying to find a floor NAV.
- Long Run Exploration
- public
- absolutely smoked since collapse in oil prices (down 80% since Sept 30)
- oil and gas producer in Peace River
- seems capable to maintain production and maintence CAPEX at these lower prices
- poised for a good return if prices recover
- One Earth Oil & Gas
- private
- heavy oil exploration in Alberta, via partnerships with aboriginals
- limited information available
- company seems like a dog; SCP has been pumping money into this thing since day 1
- NAV heavily discounted in our valuation (80% of SCP’s book value)
- could years before this investment is accretive at current oil prices
- InPlay Oil Corp
- private
- limited information available
- light oil exploration and development in Alberta
- confusing that the carrying value of the company has increased over the last year during the oil price collapse, while they haven’t invested any further capital
- NAV is estimated based on identifiable land holdings (proven reserves)
- very likely there is more to this company, but the information isn’t available
- Independence Contract Drilling
- public
- drilling services for oil and gas producers in the US
- I believe they have proprietary shale equipment
- good analyst’s estimates/sentiment
- Corsa Coal Corp
- public
- met coal producer with operations in Pennsylvania and Tennessee
- trading at 75% of book value
- made a large acquisitions in 2014 and then found themselves shutting in some of their other mines – not a good sign
- One Earth Farms Corp
- private
- initial investment idea was to create one of the world’s largest farming companies (1 mil hectares … crop and cattle farming). They never got close to that size and quickly ran into too many issues trying to manage a large farming operation (lack of flexibility)
- the business has changed focus, they now create “farm to fork” products and have purchased several brands over the last year
- I suspect the book value of this company is made up of some intangibles/goodwill, which are discounted in our valuation
- Union Agriculture Group
- private
- largest corporate agricultural landholder in Uruguay
- very likely the land alone (130k hectares) is worth the market cap of the company
- company has reported losses over the last few years and are currently restructuring/renegotiating all of their debts/commitments – this seems like a red flag
- valuation of the company is based on the low pricing scenario of its land holdings (less debt)