Manitok Energy Inc MKRYF

RE:RE:RE:Shorts still hanging in here

[jerrybe]

My view is that they will have a very low drilling activity for H1 2015. The last press release (what we have to go on sadly) states they will drill a couple of wells before spring break up. 

They are putting online all of their Entice wells drilled up to date. At least of couple were supposed to be hooked up in December and a couple more by the end of this month...they drilled quite a bit in 2014 and the test results (let's see production) indicates real success at Entice. 

IF oil prices manage to recover within a reasonable time frame then this stock has to multi-bagger potential. Debt has ballooned to close to $90M according to the November guidance but the stock-buyback program was stopped in order to divert any extra funds to reduce the debt. Given the very low capex planning for H1, I expect debt will be kept under control during this period.

Market cap is USD36M....CAD45M. If Entice is the success we expect it to be and prices recover over the next two years, we will look back and think of these prices as an insane bargain. The discount is somewhat justified by the lack of news for the time being sadly. It is unusual to have so little disclosure for a firm that discloses quite regularly considering they trade on Venture.

At this point, markets are in a complete panic about oil. The worry is that all of the oil cut will have to come from North America as OPEC and other producers seem bent on not curbing their production. It is fascinating to see OPEC members taking turns each week in the media saying each time how oil at $25 is OK for them. It might be where they break even but that is by no means "OK" for them. Breakeven means zero losses on new production, it also means zero contribution to their budget from their oil production. A completely untenable situation in the long-term for any of these membership countries...just look at Venezuela and Algeria....

Their will be gems to pick up in the weckage and I believe MEI will be one of them. Yes, they can definitely do better in terms of disclosure and I hope that as they grow, they will be able to improve on their governance, disclosure and liquidity. In the meantime, this could well be an amazing buying opportunity. GLTA!