Mon, Jan 14, 2013
Investment analysts at Barclays Capital dropped their target price on shares of PetroBakken Energy (TSE: PBN) from $14.00 to $13.00 in a note issued to investors on Monday.
Shares of PetroBakken Energy traded down 6.30% during mid-day trading on Monday, hitting $9.37. PetroBakken Energy has a 52 week low of $9.71 and a 52 week high of $11.12. The stock’s 50-day moving average is currently $10.51. The company has a P/E ratio of 45.45.
A number of other analysts have also recently weighed in on PBN. Analysts at RBC Capital downgraded shares of PetroBakken Energy from an “outperform” rating to a “sector perform” rating in a research note to investors on Monday. They now have a $11.50 price target on the stock, down previously from $14.00. Analysts at TD Securities cut their price target on shares of PetroBakken Energy from $15.50 to $13.00 in a research note to investors on Monday. They now have a “buy” rating on the stock.
The company also recently declared a Dec 12 dividend, which is scheduled for Tuesday, January 15th. Investors of record on Sunday, December 30th will be given a dividend of $0.08 per share. The ex-dividend date of this dividend is Monday, December 24th.
PetroBakken Energy Ltd. (PetroBakken) is an oil and gas exploration and production company. PetroBakken's activity is focused in three main areas of western Canada; southeast Saskatchewan, central Alberta and northeast British Columbia.
from what I understand, they have reduced their cap ex spending for this year, never a good sign for an energy company, we shall see. I was in this a year ago, out now but I would buy in at a lower price.
This firm has delivered what it promised both on the operational and financial side of business. See my earlier posts for a detailed discussion, including last Friday's conference call.
Last time we saw this negative price action was in September 2011...at that time WTI prices were much lower, Europe was on the verge of a meltdown and Petrobakken had this famous put option on its debt that was callable and that could have created massive dilution...
Since then, the firm has built an impressive drilling track record (just see their Cardium production on their investor slides!). They have restructured their debt maturity with a much more favorable profile with long term debt. They have fully separated from the parent company. They have acquired promising new land leases, a cheap stake in ARN and sold nicely a few assets.
You cannot fault this firm. But, Friday was the coming out of a firm that has decided to be cautious. And it is being punished for it. In this industry, it means they are going to do less drilling and hence less growth. The market seems to want it both ways, plenty of growth but reduced debt and no dilution.
The valuations are becoming extremely attractive now, with a 10% yield. Of course, just about everyone (including me) is sitting on capital losses. When a stock can lose 20% of its value in one week on no news, it is scary. We are in the "falling knive" or "risk off" scenario, usually those are the best opportunities but one has to take a long-term view and stomach this kind of volatility. Not for everyone obviously. The stock can drop further, at which point, it will be a massive buying opportunity for those who can go against the wind.
Think of their star director Lambert who has been accumulating millions of dollars of the stock at much higher prices...insiders are not selling! There is no "secret" bad news lurking.
The dividend is secured for the time being. If they cut it, it would be because of falling oil prices, in which case, I would want them to save the cash. If that happens, all E&P will cut their dividends and Petrobakken will still be in good shape to weather the storm. The macro risk is still the #1 concern. All E&P firms are highly dependent on oil prices. I do think however that Petrobakken has had a complete meltdown since September that is uncorrelated with oil prices which have rebounded from their lows. The spinoff was surprisingly misunderstood and in my mind creates a buying opportunity. But please do your own D&D before investing, this is a volatile stock!
Sentiment: Strong Buy
share volume is 4 times normal so it seems one of the Canadian stock brokerage analysts must have said something to their clients to cause them to unload shares today.
What is known can only be guessed at. I suspect that their are transportation issues effecting the Canadian energy producers as they produce more energy and do not have the infrastructure to move ever increasing quantities of energy to the U.S. and to their distribution points. Remember, Canada is about the same size as the U.S. with 90% less population, so they need other markets and more pipelines just as the U.S. needs more pipelines.
I keep reading that many new wells are shipping production by trucks to processing plants and distribution points. Trucks are not efficient.