RE: Bobwin & Casey???? So this is what I posted on several boards. I didn't know that Casey sent out anything on Stream but I can guarantee you one line about Stream to Casey's mailing list is worth a couple thousand of my posts. Notice trading volume has gone down the tubes. I am a value investor so I don't want a big jump in volume followed by silence. So it certainly wasn't my intent to create some kind of minibubble of volume. We need continued improving production and cashflow results. We need financing for the Delvina horizontal and we need somebody to buy the expected output. Once those are all inplace AND we hit Delvina at expected levels, we should be ready to rock and roll. See you next summer.
I have a new favorite oil stock. It's got big upside with a fairly short timeline to find out if it's real. Profitable, cheap but not particularly liquid.
Stream Oil and Gas, SKO.v/SOGAF C$.85
66,637,801 shares outstanding
3,830,752 warrants
3,055,000 options
73,523,553 total FD share count X C$.85 = C$62,495,020 market cap
Last reported qtr ending 5/31/12. Earned .07eps FD. That's a fwd p/e of 3. Very high netbacks.
24.8 million boe proved + probable (2P) NPV10: C$527MM(2P); $816 MM(3P)
•Added possible, contingent & resources-in-place
•Less than 8% recovery to date
Operating in Albania, Stream along with Bankers Petroleum, BNK.to, is doing workovers to large old fields that were discovered in the 60's and 70's but neglected once primary production started fading. Secondary and tertiary EOR were sparsely used in these wells until Stream took over. They produced 1141boepd in Q2 but should report 1500-1800boepd for Q3 ending 8/31/12. They had capacity for 2000boepd if all jetpumps were installed and that was all done before the end of Q3. Should boost eps to .10 to .12.
Company is projecting production of 12,500boepd by 2015!
https://www.streamoilandgas.com/_resources/presentations/SKO_AGM_Presentation_17May12.pdf
WHY INVEST?
1. already profitable, cheap producer selling for 3X or less fwd p/e and less than 1/10 3P NAV.
2. fiscal regime is very favorable going forward. Stream pledged a high percentage of existing production when they took over fields but they get the increased production from workovers, new wells.
3. High netbacks due to Brent pricing and high European ngas prices around $10/mcf.
4. More workovers scheduled for 2012 but big catalyst is Delvina field horizontal well. Delvina is one of the largest ngas fields in Europe. There are two vertical wells producing but Stream is going to drill a horizontal well in spring 2013 at a cost of $15million. They are trying to arrange a complicated sell forward financing that should be non dilutive. Once that is done, they also need a purchase agreement from and enduser. They are working with a company planning to restart a power generation plant but haven't finalized the deal.
5. Planning waterflood to enhance one of the fields. Will use produced water from other two oil fields to provide water and eliminate disposal costs.
6. Stock is relatively undiscovered. I was told about it by Sskilz, who noticed that Valuemind had included it in PSL22.
Appreciate any comments/criticisms etc. It's not particularly liquid so you have to be careful when you are buying. I was not successful in buying at the bid so had to pick a day and buy at the ask. Probably wasn't patient enough. I expect financials for Q3 to be published 10/31/12 so we have several weeks before then to buy. I talked with CFO Jim Hodgson and was favorably impressed.
Bobwins