Twin Butte Energy Ltd TBTEF

When oil goes up

[konzelmann]

When oil returns to sane levels in the $80 range, TBE is going to actually come out of this in a pretty good spot because they've cut the dividend to a more manageable level in the process of surviving these low oil prices. They will have the option of either having a bit more growth, or raising the dividend as oil strengthens. Production will also go up a bit faster than expected (I think) because some of the 'lost' production is only due to them shutting down heavy oil assets that aren't as economical at low oil prices. The low prices have also sped up the process converting to more medium oil production, which will be better long-term. If you're bullish on oil, you should be bullish on Twin Butte. Of course, it all depends on future oil prices - I don't feel that oil will be $60 in 6 months, I feel it'll be over $70. And at $70, TBE is fine. At $80, it'll be looking really good again. There's potential for a double, without a doubt, as long as production doesn't fall too far during these low oil price days with lower capex. So the question is, how long does oil stay this low? I say, less than 6 months to go. And for that reason, I say TBE is fine.