CommentaryFrom the good folks at Stockwatch
Alberta producer Traverse Energy Ltd. (TVL) gained 0.5 cent to 19 cents on 200,300 shares. Late last week, it released its full-year results, including production of 768 barrels of oil equivalent a day (49 per cent oil and liquids). This is up from 690 barrels a day in 2016. The company also increased its proved plus probable reserves to 2.23 million barrels of oil equivalent at year-end 2017 from 2.16 million barrels at year-end 2016.
More interestingly, Traverse provided an update on its recently drilled well in the East basin Duvernay in Alberta. The well produced 41.6 barrels of oil a day in March. This result is better than that from January and February, when the well produced 36 barrels of oil a day, but the result for March nonetheless fails to inspire excitement. Investors have seen more pleasing results from other East basin explorers, such as Raging River Exploration Inc. (RRX), which today gained 37 cents to $6.73, and Crescent Point Energy Corp. (CPG), which today gained 33 cents to $9.48. Raging River reported in February that its first East basin well was producing 190 barrels of oil a day. Meanwhile, Crescent Point and the private Artis Exploration have together drilled an East basin well that produced 515 barrels of oil equivalent a day in its first 90 days. Both Raging River and Crescent Point are new to the East basin. Raging River's core assets are in the Saskatchewan Viking, while Crescent Point's core assets are in Saskatchewan and Utah. The East basin Duvernay, which is not as developed as the Kaybob Duvernay to its northwest, began attracting attention from oil and gas explorers only in the past year or so. Consequently, the price of land in the basin has gone up, but it is still relatively cheap. Crescent Point paid $315 per acre on average. It quietly accumulated 355,000 acres, mostly in 2017. (In yesterday's Energy Summary, we discussed Crescent Point in connection with the emergence of a dissident shareholder, Cation Capital, which is demanding a board overhaul. Cation has said nothing about Crescent Point's East basin endeavours, which the company announced only a week ago.)
Returning to Traverse, it plans to spend $15-million on its capital programs this year, down from $17.7-million last year. It does not say how much it aims to produce this year. In 2014, when it was producing about the same as in 2017, approximately 770 barrels of oil equivalent a day, its stock traded up to $1.45. Besides drilling various parts of the Duvernay, Traverse drills the Coyote Mannville in Alberta. The company's president and CEO, Laurie Smith, was previously the president and CEO of Petromet Resources, which peaked at $10.12 in 1994, and Raven Energy, which peaked at $2.40 in 2006.
Today, Adam Wells, a director of Traverse, bought 50,000 shares in the market at 20 cents. He now holds 640,000 shares. He is also a director of consulting and deals at PricewaterhouseCoopers LLP.
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