Twin Butte Energy Ltd TBTEF

RE:Asset purchase

[bshort92]

On his last BNN appearence Eric Nuttall indicated there was over 250,000 boe/d for sale in the WCSB. Nuttall can be criticized for some of his picks but I don't see a reason for him to make up that figure. Could TBE make an asset purchase for shares or debt? Those are the only two ways to make an accretive asset purchase.Therefore to make one the other party must be willing to sell at a price that does not impact TBE's ability to pay the dividend, fund capex, grow at a stated 3-5% pace (so far only a theory) and not spend 100% of cash flow. Sounds good although TBE has contracted from 19,200 boe/d down to 16,200 boe/d production in nine months. You can borrow a page out of the George Fink playbook (BNE's briliant operator) and just focus on one area that offers compelling returns...in his case the west central Alberta cardium. I think TBE has the formula (concentrating in the Lloydminster corridor) but they can't grow unless they stabilize production (a nine month grease fire!) and reduce their decline rates. The Wildmere/Auburndale property solves a lot of the issues with the huge emphasis on 70-80 boe/d wells with horizontal drilling. The map on the Andrew Johns-Raymond James August update shows TBE's land postion there. It is quite extensive skirting all over the area in and around lands operated by HSE, Perpetual, CNQ, Crew and privately held Gear. They could make an asset purchase (into light oil?) or they might just expand there growing potentially dominant land position at Wildmere.