Twin Butte Energy Ltd TBTEF

The Lloydminster corridor

[bshort92]

TBE now producing once the Waseca purchase closes 16,000 of their 19,100 boe/d in the Lloydminster corridor. BTE still producing 19,800 boe/d heavy oil of their 20,800 boe/d in this area. TBE's undeveloped land position now 220 K acres vs BTE's 268 K. 32% of BTE's 250 mmboe reserves or 80 mmboe is derived from this corridor. TBE's reserves probably now close to half that number on their Lloydminster lands. It's an inventory/reserves comparison worth making since BTE, that well run $5.8 billion concern, is a company worth emulating citing their great growth and consistent dividend payout. They are getting a lofty $108 per flowing boe valuation in the market not just because of their profitable Lloydminster operations but because of their massive Peace River area "Seal" 17,500 boe/d and growing heavy oil effort. Their debt to cash flow ratio is .08 X's. BTE gets terrific $38 per boe netbacks on their 54,000 K boe/d production. Their capital efficiency is highlighted by a terrific multi zone targeting technical team, an efficient,  well run trucking infrastructure component and now they transport 40% of their production via rail closing the heavy oil differential and bypassing glutted pipeline infrastructure. Granted BTE has great institutional coverage and multiple exchange exposure listed not just on the Toronto Stock Exchange but in the US on the NY Stock Exchange. Last two days TBE has been hit by some profit taking while BTE a favorite of analysts just clips along. They do set the tone in the heavy oil space but TBE is a now a big player too in this arena and this years rapid fire M&A effort has propelled them in the Lloydminster area as right on BTE's heels. OK TBE trades at $39,950 per flowing boe. But with each paying dividend month, each solid performing quarter of consistent performance, each accretive acquisition then the market will recognize another player maybe not worthy of $108K per flowing boe but getting a higher valuation than $39,950 per flowing boe. Stay tuned.