Painted Pony Pete Ltd PDPYF

RE:PPY blows the doors off

[jerrybe]

Absolutely fantastic numbers! I am going to load up the truck tomorrow...was so close to buying today...I will have to pay a 5% premium tomorrow I imagine but now I have peace of mind that this little pony is going to go all the way!

I loaded up on CPE, ECA, CR, PPY, AAV and DEE in December...yes, the last few months have been very good to me. I am not selling due to the massive tax impact I would suffer...but when I hear all of these firms reporting their Q1s, the story is the same across the board: Better netbacks (obviously), better cost control, better handle of the balance sheet, better well completion techniques. I think the latter is an important key that my favorite people at EOG have kept on saying for years now: The technology is improving fast on these wells...the type curves are being upgraded regularly, reserves are being increased, we are really at the beginning of a true revolution here.

The key now is for takeaway capacity to follow up, which would provide much more clarity on the pricing front...even in the US we are seeing some serious bottlenecks popping up in key plays...this is the biggest threat for the industry, with the increased risk of tighter regulations. In Canada, the bottleneck issue is the more pressing one. In the US, the regulatory risk (to the point of banning fracking) is the more pressing one. Hopefully, both will be resolved with a positive outcome for all stakeholders.

Prices have gone up a lot. We have seen some pullback lately, it was expected after such a run up. I do believe that there is more price increases to come in the coming 18 months as the story unfolds. ECA is just at the beginning of a massive and successful turnaround. PPY will be bought out, I have no doubt about that. It is just a question of when and at what price. In the meantime, I will let them improve their well economics and prove further their land...the takeout price will be that much racier! GLTA and do your own D&D!