Twin Butte Energy Ltd TBTEF

Intermediate Action

[bshort92]

While the trading volume in TBE stays way under normal volumes pending the closure of the Avalon purchase in two weeks or so lets examine the merger of intermediates 15,000 boe/d GO and 11,500 boe/d WFE. The new entity is a decent sized intermediate 26,000 boe/d production, 125 million shares or so out, $400 milion of debt (1.9 debt to cash flow), over a million acres of inventory, 50/50 oil to gas, about $1.3 billion of tax pools and a solid Viking presence with good technical and respected management team (hot frac. pioneers). Is this merger amid close to $94 oil a trend? The lesson of this deal is to watch your debt levels.  Balance sheet strength is an attribute. Don't be surprised if going forward WCP, FEL, PCE, BXE, DEE and CLT are not in play. Stay tuned.