As per CC and release this AM, 15 % increase on production in 2010 is conservative in that expansion of LA and West Texas drilling is possible during year. Added acreage in West Texas and Hackberry is promising. Reserves will increase by 22 mill bbls about end of 2010 just from Alge L project.
Sorry to see a fan go; I think it is a mistake to drop out here, although a small fallback in S.P would not be a surprise after the run-up we have seen. I think the basic facts about increased land holdings, drilling and production that were in place in Tx and La at the beginning of 2010 will make for surprise earnings through this year beginning this Q. Secondly, I think the Tar sands have come back nicely from a downturn last year. The IPO was not the first positive event; there was a sale of acreage to china and then last fall there was another sale to Exxon. All these events tend to increase the value of the Grizzly acres, because they involve adjacent lands. Grizzly could be bought out, or they could do an IPO.
*Closing Long Position*
The areas that will be newly open for exploration in the Gulf are much further offshore that GPOR has gone in the past. I doubt they will be moving in on the Atlantic coast areas.
I sold around today's high.
Check out the graphic below.
The announcement by itself was maybe not enough to warrant the two-day surge in the stock price, but taken in the context of what has happened over the past year, it does. GPOR is and has been primarily exploring for and producing oil, and up until a year ago it had steadily raised production to just above 5000 bbls/da. Owned properties were good and the same as they have today except for some good sections in the Bakken of N.D and Mont. They became a little to aggressive with borrowing on their line of credit and were caught by the drop in oil prices. Bank forced them to cut back on new drilling in Texas and La and to sell most of their acreage in the Bakken. However, they managed to keep some pretty good production going through well re-completions in La, and used the money wisely to buy new acreage in La, Texas and the Alberta Tar sands. Also kept the plans for first SAGD project in Alberta moving forward. They also drilled a few new wells in La and Tx, and finished the year with oil production at ~4850 bbls/da.
Now, with oil prices up and costs well in control, they are predicting additional 15% increase in production over next year. Earnings should increase sharply, particularly if oil stays at $75-80 or even increases.
The Tar sands acreage (130,000 to GPOR) could be worth a much as $14,000/ acre according to latest near-by Exxon purchase, and is a great asset IMO. I doubled up yesterday mid-day.
I agree. Good report, good cc. I got into GPOR about 3 years ago; due to big potential of Grizzly. Just don't know if I will live long enough to see it fully developed. As you mention, increased drilling and production in La and Permian; as well as improved pricing should move share price up. They are in great shape with low debt and cash flow adequate to finance drilling and grizzly. Grizzly is at least 3 years off. (regulatory approval 12 months+ construction 18 months, ramp-up 6-12 months. see Connacher Oil--they have a 10000 bbl/day SAGD project also at Algar Lake coming on April 1 with commercial prodution Aug. 1} I still like long term prospects.