First time Post - We all have an opportunity hereIn an oil market where we have seen oil prices beaten up where should we look to invest or not invest.
This is my first post ever but thought i'd begin to share my thoughts on oil companies.
I am in the oil and gas industry and have been for many years now in Calgary having experienced several downturns. I think I can probably can answer a lot of question as i do have accumap and have a good understanding of the Western Canadian Sedimentary Basin.
I came across Blackbird as i was searching for small cap high torque players in Canada.
As my title suggests we have a opportunity here with Blackbird.
As there have been significant negative funds flow from Energy recently everything has been clobbered regardless of quality. Blackbird was not spared.
Here is the interesting thing, Blackbird has no production yet (so it is not losing money on a marginal basis per bbl), has two wells behind pipe and has a $23.5 million.
Furthermore, Blackbird has no reserves booked (i am sure this will come). Once reserves are booked, the company can obtain a reserved based lending facility to continue development without dilution.
I have seen some people comment on here about economics. This play is one of the most economic plays in North America. If you look at Blackbird's first wells and what is being developed at Encana's pipestone block (13-22: 350 bbls/mmcf) - these wells have probable break even of 40$ per barrell - but wait thats $40 CDN - currently with condy trading at par with WTI and our canadian currency in the perverbial toilet this means WTI break even is more like $30 (accounting for fx adjustment) - this is incredible and most plays do not match this by a longshot.
But to be honest, at the stage that Blackbird is at, economics do not matter as much as delineation.
Oil prices will come back and companes will be looking for liquids-rich gas resource that is de-risked, delineated and ready to be develop on a full cycle basis. Blackbird is one the of the few small caps actually doing this de-risking for the big boys that is not private equity backed. THis means its one of the few opportuinities that a general investor has to access an opportunity like this.
This means that Blackbird has a LOT of upside. Especially at these prices. Currently there is ~$0.06 per share in cash so investors are being asked to pay for $0.06 for the land (78 sections), production behind pipe, and upside.
I think people should begin to do their due diligence on the industry becasue when prices come back, Blackbird will ride that wave much higher.
I do beleive the maangement team (Garth et al) are doing an excellent job moving this forward, Times are tough but this company with the choices they have made will be able to take advantage of the market and grow.
I'll be posting more on this company and others and I hope you appreciate my commentary.
Stay tuned for more analysis on this company and others.
This is the opportunity investors. do you due diligence as always but now is the time to be investing great names.