Painted Pony Pete Ltd PDPYF

Top 10 reasons to own PPY, the best energy stock in Canada

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1. When oil was at $104 PPY sold their Sask property to CPG for $100 million. They also sold shares to Altagas at $12 per share...When oil prices collapsed they didn't need to raise any capital at all and there was no dilution 

2. For the last 7 years they have averaged over 40% production and reserve growth per share 

3. Last years 2p recycle ration was 7.5 times, they replaced 5000% of their reserves even with those low gas prices, they have an NAV of $28.81 and an RLI of 140 years 

4. THeir 2p natural gas reserves are currently 4.2 TCF, the 4 largest in Canada. But they are not fully booked yet. It is estimated there is a total of 20 TCF on their land 

 5. PPY's land package is located to the right of BC's royalty line. Which means every well PPY drills qualifies for a $1.2 million tax break. As a result their royalty cost a percentage of revenue is currenly 3%

 6. Using Nov 1 strip prices, PPY's full cycle returns are between 77%-113%. Full cycle means that includes the cost of the land and the infrastructure. Most energy companies are crud and only report half cycle returns to make themselves look good. PPYs half cycle by the way is over 200% return 

7. Again using Nov 1st strip prices (which look very low compared to todays prices) PPY will free cashflow in 2019 and really ramp it up in 2020 to over $200 million

8. $200 million distributed to shareholders and assuming a 4% yield puts PPY over $50 a share by then 

9. PPY land is directly where a new LNG pipeline will be built if Petronas goes ahead and builds it 

10. PPY is fully funded and doesn't need to dilute, they might if they want to increase their land position. But go from the current production of 40,000 boepd to 200,000k is fully funded with cash flow and banklines.  


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