May 3 TradingI was hoping to forgo posting until the Q1/24 financials were relaeased.
I would like to make two corrections to my last post.
(a) the total proved oil reserve is 15.2 years, the total proved and probable reserve is 21.8 years, and
(b) the 'gain on acquisition' listed on the year-end financial statements relates, in part, to assets acquired from Shale Petroleum rather than Slate Petroleum.
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I would also like to comment on today's stock trading.....
The shares opened at $ 6.25, rose to $ 6.30 then steadily dropped to $ 5.37 before closing at $ 6.00.
What if Highwood worth ?
There are many ways to look at it. One common method is using a P/E ratio.
HAM's corporate deck lists financial ratios for similar junior oil producers....
All of those companues are larger in size than HAM.....
I have listed the P/E ratio from Yahoo Finance for thos companies:
Cardinal (CJ) 10.55
Journey (JOY) 14.75
Surge (SGY) 4.38
Petrus (PRQ) 3.35
InPlay (IPO) 6.53
Obsidian (OBE) 10.24
Gear (GXE) 24.00
Bonterra (BNE) 4.59
Saturn (SOIL) 1.16
Yangarra (YGR) 2.80
ROK (ROK) had a small loss
So out of the 11 stocks listed above,
7 (the majority) were trading at P/E's of over 4;
4 were trading at P/E's over 10.
As reference, Crescent Point, which has also recently made large acquisitions amd therefore carries a high debt load has a P/E multiple of 8.1.
If HAM's P/E (based on estimated 2024 profit) is less than 4, than I think that HAM is a good asset to hold in my portfolio, especially if management plans for growth.
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Another way of estimating share value is comparison of share value to book value.
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I don't want to mislead anyone......Do your own research.
What do you estimate the company's profit to be in 2024 ?
Have you made allowance for the Mannville well ?
The cost of that well is likely over $ 3,000,000.
Note that HAM issued 719.125 shares in April 2024 to directors, management and staff.
They had also issued options to certain employees.
At $ 6/share, the new shares issued are worth $ 4,315,000.
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I don't know why the share price bounced around so much today.
I have noticed that shorters have re-entered the market.
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I plan to keep my investment at the current level until the Q3/2024 financials are released.
I will be looking for HAM to remain profitable, reducing debt and look to have the ability to
repay the Boulder prommisory note in 2025.
In each quarterly release, I will be comparing results to 2024 guidance.
Note that WTI has been over $ 80/barrel, so I am expecting HAM to beat revenue estimates.