Twin Butte Energy Ltd TBTEF

My plan for TBE and other oil stocks

[Analysis98]

I'm in mostly cash position right now and am thinking about buying 40,000 - 50,000 shares of TBE.  After living through all the market craziness, here is how I'm seeing things:

1. Right now the market is pricing in the eventual $50.00 oil price.  As a result, the big swings in SP will moderate significantly as the shock and panic effect wears off and the media headlines start becoming old news.
2. There will be SP gaps up but don't expect them to be fully sustained.  Up days will be followed by declines.  I'm expecting sideways direction for the next while.
3. Tax loss selling is significantly affecting TBE because of the big SP drop.  After next week that will be over and the 5 to 10% one day drops will also be over.
4. I'm expecting a capex cut to be announced soon along with lower production targets for 2015 because of the high decline rates.  I don't expect much market reaction to this news. 
5. Dividend will remain at .016 until end of Q1 as previously stated by management.
After that I'm expecting a cut to the dividend of up to 50% providing a more reasonable yield.  Based on the new market reality, this should support the SP.  Personally I don't care if they buy back stock or pay down the debt.  Either action will make TBE stronger for the longer term and help the company take advantage of any good acquisition opportunties that might come along.

Based on these five factors, my intention is to take  a 1/2 position next week.  The timing of the next 1/2 will depend on market developments and trends.  No expert here but I'm feeling good about this strategy and about TBE prospects.