RE:VLEI read the press release this morning. It got my attention, enough to try to find out more about the company.
Prior to that this company was nominally on the periphery of my awareness. I am intrigued by O&G, although I have not much exposure to them at the moment. I have had a few successful base hits in a couple names this past spring. I am looking for exposure to some O&G names, but I am selective.
Knowing that this company has production and more cash than market cap, made me sit up and notice. However, I have had this happen before with other companies that are valuation traps - with similar type of situations.
I am hesitant with the company operating in Turkey, but that has not stopped me before as one of my most successful O&G trades had offshore operations in the Nile Delta before it got taken over.
What is the compelling story here?
Why should I buy?
traderlong2 wrote: Another international junior, Turkish gas producer Valeura Energy Inc. (VLE), added 1.5 cents to 32 cents on 368,400 shares, after releasing a second quarter operational update. Unlike Eco, Valeura has a bit of production, averaging about 521 barrels of oil equivalent a day (mostly shallow gas) in the quarter. That represented a 27-per-cent drop from the prior quarter amid a reduction in Turkish economic activity during COVID-19. Valeura noted that economic activity is starting to recover, which could help in its efforts to attract a new joint venturer to its much-hyped BCGA deep gas play. (The previous joint venturer, Equinor, made an abrupt exit in February, about four years after the companies started working together. They did not accomplish commercial production during this time. To ask Valeura, of course, they made incredible progress in identifying "sweet spots" and demonstrating "long-term potential.")
Other plans could be even more ambitious. Valeura disclosed that it has hired RBC Capital Markets to aid in "evaluating several potential inorganic growth transactions, including mergers and acquisitions." It emphasized its debt-free status and its $30.7-million (U.S.) in cash (about 48 cents a share, compared with today's close of 32 cents). This not only represents "compelling value," in Valeura's view, but it could also allow the company to benefit from a "flow of new deal opportunities" to boost its own scale and production. Investors seemed mildly intrigued. With one quiet little gas business and another asset that may never become commercial, Valeura is in need of something to attract new investors. Ideally, RBC will help it think of something quickly.