quote from article in Canadian Oil Journal last ye
WestFire Energy Ltd. (WFE/TSX) WestFire is focused on the Viking tight oil play in southwest Saskatchewan, where Mr. Nuttall says the market has failed to notice the resource upside in several names. He notes low initial production numbers have investors viewing this opportunity all wrong, creating an opportunity for those who recognize the strong economics of several projects due in part both to US$100-per-barrel oil prices and large royalty incentives.
WestFire is more than 70% weighted toward light oil and should hit production of about 5,500 barrels per day in 2012. It has about 925 risked locations in the Viking within three different areas, each of which Nuttall notes has had successful wells.
“It’s cheap on current production, so that gives you downside support,” the manager says, noting that the stock trades at less than 5x cash flow.
WestFire’s compelling risk-reward has prompted him to make it an unusually large weighting in the fund at 7.5%. While it has been trading around $8.50 recently, he estimates it could be worth $50 per share.
“They’re not going to be around long enough to ever realize that $50 because they think they are going to be consolidated along with everyone else,” Nuttall says, noting that tight oil plays such as this often require large contiguous acreage.