RE:Nice move up this past weekI 'll jump if it crosses 5.50. Read TOL press release, looks like its biggest shareholder LTS is looking to buy the entire company and they are in talks and hope to conclude by August. This is the catalyst we need. Light oil being snatched up by domestic players who know darn well its cheaper to buy established proved and probable than devloping organically. The quick negotiation deadline suggests the two sides arent probably too far aprt in price. Other parties are gonig to act quickly now to grab these deals before they are gone. There is no opposition at all to keeping that oil in Canadian hands. This could be worrisome for international players who were trying to bottom feed the best oil ( light oil) in the safest jurisdiction in the world.
Two weeks ago there were like 700 calls purchased when the stock was like 4.80 and the purchaser even though the price at that time was about 30 cents, they bought everycontract to 60 cents. I remember seeing that and thinking mmm , thats odd. On most days LEG does not trade any where near 700 k shares. I thought at that time , some one must know something to buy and pay 50 % premium on option to ensure a big inventory was purchased. Then there was no follow through on the share price and no real option activity since then.
I have had discussions with two members from the Board. They have made it VERY CLEAR the company is ALWAYS available for sale at the right price, but not a FIRESALE. These guys are great operators, in my view, the best management team in the country, delivering in FY 2012 production, exceeding Q1 production, and even brushing aside notions that the flood impacted production . Other parties would try to pin poor performance on the flood to disguise lousy operations but not these guys. They execute well, strong balance sheet, nodividend to impact capex ( the best model ), and higher commodity prices this year.
Last year oil was so so but gas was the fat bridesmaid no one wanted to dance with. WTI and Brent differential is almost non existent now. Remember that low NG prices have caused alot of drills to be put in oil or liquids while gas prices recover. Despite NG rigs near record deployments, all those extra rigs arent really getting alot of oil supply commensurate with the equipment thrown at it!!!!!
The next two weeks will be very interesting. If TOL is snatched what next ? SGY, LEG, BIR, ATH?