RE: First Energy - Overperform Buy Agree its dirt cheap and a no brainer on every metric price per flowing barrel,price per proven and probable reserves.
Nothing can compare.
Using what Twin Butte is paying for heavy oil producer Waseca ($14.14 per P/P reserves) Rock Energy with
8,300,000 proven and probable reserves are worth $117,362,000 divided by 40 million shares outstanding
equals $2.93 per share value.Add the fact they are debt free and you have to wonder
at the markets lack of recognition for this great asset.
Rock Energy still in the dog house due to history of never meeting expectations.
In their presentation they suggest growing into a 5000 to 10000 boe producer.
Well they can start by taking a good look at Palliser oil.PXL has a debt load that can be managed with current oil prices but vulnerable if energy prices were to slide significantly.
It would be a great match if most of Palliser's team were retained. They have appeared to have mastered
the secret sauce on High Volume Lift. Many competitors are not getting near the same results.
Combined entity RE and PXL would have a very oily production base of over 5000 boe.
If RE could get their share price up towards a more reasonable $1.75 they could make an all share offer for PXL
This new company could model themselves similar to Twin Butte and consider paying a dividend at some point in time.
I could see a significant gain in share price towards $3 once such a deal were consumated .At that level a financing would be appropriate to allow the company to grow more agressively. Longer term $4 and $5 per share
would be realistic within a few years. Hope Arc gets behind management and considers this.
In the short term I would like Rock Energy to initiate a normal course issuer bid.They are trading at a ridiculous
$17,000 per flowing barrel and $5 per proven and probable boe! Insane.
Why are insiders not buying?
And why have they chosen not to have a contact email address for investors to make enquiries to senior management on Website? I dont like playing telephone tag.
Arc Energy should stop being a passive 20% holder and shake things up.