Delphi Energy Corp. DPGYF

RE:RE:RE:What Gives?

[jerrybe]

bonjovi and bigbab? My fellow friends from LTS and PPY respectively...respectively my worst and best buys in the space.

I wish I had never heard of LTS...I did not average down, I refuse after having put so much in it...but I have actually averaged up on PPY! That firm is taking all the right steps.

I totally agree with you bigbab, it is all about the debt load. PPY, AAV, CR all have much lower debt levels than DEE. They are also larger and basically can withstand more headwinds.

That being said, I have gone through all the numbers and operationally, DEE is one of the best Montney drillers, period. 

They just turned free cash flow neutral. They should remain so through 2015 and build their reserves throughout the year. 

Their Q3 was impacted by some curtailments but the latest volumes are clear: The firm is on track to meet its exit rate.

On the latest well, they are trying out a new fracking technique (more sand, etc.). These guys are very serious when it comes to drilling. Much more professional than our chumps at LTS!!

Anyhow, I bought more today. I added to AAV and DEE. The former because Q3 numbers were just superb (talk about drilling efficiency, lowest cost producer in the Montney)...and DEE due to the low valuation. The weak quarterly results provide a very nice opportunity to add...I will keep adding below $1.80, unless something changes.

There is absolutely nothing wrong with this firm. Yes, it has low debt but they said it: To remain free cash flow neutral they simply drill one fewer well in 2015 if prices maintain their current low levels.

I do not think we will see oil at $70 next summer...but even if we do, then DEE will weather the storm. They are going to get $3 extra per boe with some of the midstream solutions they just got online. That softens the blow as well. Will it go lower? Maybe...but at these levels, with all the production coming online at a steady rate, I think we are safe.

For those not afraid of further oil price movements...check MEI...much smaller, market cap absurd relative to prospects....as long as oil prices behave that is.

GLTA!