Lyxr $ Frn Discussion Threads

[fangorn2] 12/6/2013 15:07

Any thoughts on Spectra Energy Matt?

Natural Gas producer, 4% yield - Spectra Energy.
Raising divi a chunky 50% to 12cents(from 8 cents)

Just come across this from mad Money

Cramer: Spectra Energy's Big $50 Billion Plan
hxxp://www.cnbc.com/id/100807876

[mattybuoy] 05/6/2013 23:53

Another BNN clip on developments regarding East Coast LNG exports. Basically an off-take agreement has been secured with German uber-utility company E.ON.

hxxp://watch.bnn.ca/tuesday#clip940042

Corridor has an estimated 60 TCF of gas-in-place contained within the Frederick Brook shale in New Brunswick which could be sold via this infrastructure if and when it gets built. That is in addition to their estimated 12bn barrels of oil-in-place on Anticosti Island and the huge but untested Old Harry structure offshore.

I personally suspect that if LNG exports from Canada do ever happen it will be the East Coast which gets there before the West Coast. There are pipelines already in place for one thing, and there is less opposition. Note that the guy in the interview would obviously much prefer to be exporting native Canadian gas than US gas from the Marcellus.

So what does Corridor need to develop the Frederick Brook shale?

1) A decent fiscal regime in New Brunswick. This is apparently currently under discussion by the bureaucrats.
2) A JV partner with big pockets. It may be that this arrives after the above point is resolved.

Overall I just love the stupendous optionality in this stock, and they have no need to dilute the equity any time soon due to cash flow from the existing McCully gas field.

[mattybuoy] 04/6/2013 23:41

BNN interview with Darren Gee of Peyto.

http://watch.bnn.ca/#clip940133

[andy] 29/5/2013 23:39

ZEN.V moving up nicely after their recent announcement and London presentation!

CAD.V also on the move after the recent fall, Haywood report and price target seems to have woken up the market.

Royal Nickel also up sharply.

[mattybuoy] 29/5/2013 19:25

Corridor Resources (T.CDH) is experiencing huge volume today and is up 6% or so to 79c.

There have been some press articles out of Quebec suggesting that fracking might be allowed in places without large populations like e.g Anticosti Island.

This stock traded at $11 (with a similar number of shares out as today) before Quebec announced its fracking moratorium in 2009.

[mattybuoy] 24/5/2013 11:09

The CEO of Zargon continues to buy on the market. Another 100,000 shares or so which is $600,000 worth, adding up to over $1.3m in purchases recently. That really is putting your money where your mouth is.

Although Zargon is perceived as a "no growth coupon clipper" this may not in fact be the case. There is substantial growth potential over the medium-term from their ASP project. They are the only small outfit playing in this area of tertiary recovery, and if/when it is proven to work they ought to start to get deals on other smaller "exhausted" oil pools which the big boys are not interested in. That could be a lot of oil relative to the company's size, and again (like heavy oil) ASP (polymer flood) is long-term low-decline production.

Just enjoy the 11% yield while you wait.

[jonno1] 20/5/2013 09:45

Nordic Oil % Gas, which has been slaughtered the last year or two may be getting its act together, also in LLoydminster at about 3 cents

[mattybuoy] 17/5/2013 20:45

Interesting. I shall have a look, thanks.

[langland] 17/5/2013 20:24

MB,

Interesting that you should have focussed on Twin Butte. Have you looked at Edge Resources. Same business quoted also here in London EDG. Smaller mkt. cap but probably now more that 1000bpd.....Henderson and L and G are big holders. Brokers with targets at 32p against current 12.

[mattybuoy] 17/5/2013 20:04

I just noticed, Peyto hit $31. Marvellous, it just keeps creeping up, as indeed it should.

You may be interested to know that Don Gray, who founded Peyto and is now the non-executive chairman devotes most of his efforts these days to a private heavy oil operator called Gear Energy.

This guy is a bit of a legend in the oil patch and you can bet that if and when Gear goes public it will make waves. I will certainly be buying it anyway.

The future of heavy oil is very bright IMO.

[mattybuoy] 17/5/2013 19:51

Heavy Oil

Not to be confused with oil sands (bitumen) heavy oil is easily understood:-

GOOD - Wells have reasonable capex, low decline rates and long-life production. This is the opposite of fracked wells.
BAD - The pricing differential to WTI (the light oil benchmark) can be volatile.

IMO the current wide differential will not persist. In fact I can foresee a day when it moves to a premium instead of a discount. Not soon perhaps, but worldwide the refinery business is gradually removing light oil capacity and adding heavy oil capacity. This is simply because there is far more of the latter around than the former, and fracking of tight light oil will not be able to compensate for conventional light oil decline rates in anything other than the short-term.

There is one other factor to consider with heavy oil and that is the price of "diluent". This is needed to upgrade the oil's API so that it can transported via pipeline. I believe the minimum API in most pipelines is around 21/22 API whereas the raw heavy oil is typically around 8-15 API.

What is diluent? Well it's basically NGLs (natural gas liquids), and these are also priced at a differential to WTI. NGLs have uses other than diluent of course but in simple terms the more wet gas drilling that is occurring the better for heavy oil producers.

[mattybuoy] 17/5/2013 19:33

I've been looking more at Twin Butte Energy (T.TBE) and I think I really like it. At the very least you have to love the name, although it should be pronounced "bute" not "butt".

The company is basically a smaller version of Baytex (T.BTE) which is Canada's premier heavy oil player. They are both operating mostly in the Lloydminster area on the Alberta/Sask border, and both have suffered recent negative sentiment from abnormally wide heavy oil differentials combined with high debt and dividend payouts.

Baytex produces around 56,000 boepd and has a market cap of nearly $5bn.
Twin Butte produces around 17,000 boepd and has a market cap of under $600m.

You would have to think that at some point this valuation discrepancy will narrow, if for no other reason than Baytex uses its stock to do a take over.

I'm not in a position to do a pairs trade so I will have to content myself with being long TBE.

[mattybuoy] 16/5/2013 19:19

Uranium.

Various pundits are saying that now might be a good time to get into uranium. If you should agree then this looks like a goodie.

Fission Uranium (V.FCU)

They achieved simply stunning results from their first drill program in the west Athabasca basin.

It's not super cheap at around $85m market cap but interesting nonetheless I feel.

[fangorn2] 15/5/2013 20:45

CALGARY, ALBERTA--(Marketwired - May 15, 2013) - Freehold Royalties Ltd. (Freehold) (TSX:FRU) announces first quarter results for the period ended March 31, 2013.



Impact of lower Oil price on revenues/Net income.
Divi a healthy 14 cents per month.

[mattybuoy] 14/5/2013 18:50

NRN doing well today. It's the 5% nickel in sulphides that has the punters excited I guess, and they might even drill a hole later this year.

[mattybuoy] 13/5/2013 18:46

OK here is a punt for a change.

Northern Shield Resources (V.NRN)

Has just acquired a nickel project in Greenland which looks promising:-



They also have some interesting assets in the virginal Ring of Fire area in northern Ontario, which some day will become a very large mining camp.

I have been following this stock for ages. They never raise enough money to do any serious work but what they do achieve is always interesting. The strategy would seem to be to try and attract bigger partners to do the heavy lifting.

Anglo-Pacific, Sprott, HudBay Minerals and now Teck are all large holders.

168m fully diluted shares at 17c gives a $28m market cap. Note recent over-subscribed PP.

[mattybuoy] 12/5/2013 18:16

It's a nice deposit but it's all about financing at the moment.

[cagey76] 12/5/2013 14:11

Matty, cheers for the thoughts.

[mattybuoy] 11/5/2013 20:43

If you're feeling reckless how about this one?

Spyglass Resources (T.SGL)

The yield is 14% and there is loads of debt. Spyglass was formed by a merger between 3 distressed companies.

This Seeking Alpha article from yesterday posits that the company might not actually be completely hosed.

[mattybuoy] 11/5/2013 20:11

Whitecap Resources (T.WCP)

Very oily. Market cap $1.4bn, yield 5.7% (monthly payout).

Aggressive growth strategy including acquisitions.

It's not remotely distressed and the analysts like it.

[mattybuoy] 10/5/2013 21:20

Interesting article on royalty companies.



There are some new tiddlers in the space which I wasn't aware of. Nice.

[mattybuoy] 10/5/2013 14:48

Corridor Resource revisited.

Q1 Results are out today:-



They are now getting $10/mcf for their gas. That is 3 times the AECO (Alberta) price. If that price level persists then the company will easily be able to pursue all its plans without any dilution, subject to regulatory issues and finding farm-in partners.

I have now bought in. It is one of my "warrants". The various high-yielders are my "bonds".

[mattybuoy] 10/5/2013 14:42

Hmm ... Undergoing a strategic review, not promising.

Lots of shale but it's in the Northern Territory, which is about as remote as you can get. Therefore mondo capex to get anything going.

An analogue would be Central Petroleum on the ASX, which now has well over a billion shares out i.e. it has had to dilute itself to death to survive. It looks like PFC doesn't even have that option.

[cagey76] 10/5/2013 13:23

I have had a small high risk punt on this lot.



would be interested in any opinions.

[mattybuoy] 10/5/2013 13:18

Rail aside, if you want to take a view on whether Keystone XL will be approved then Transcanada (T.TRP) is the stock. As the major pipeline player this is also another nice yield play regardless of what happens with Keystone.

The other big pipeline player is Enbridge (T.ENB).