Just inherited a nice stock portfolio from my now deceased great aunt. This company is on the list of many others. Seems rather stagnant. Does anyone know what prospects, strategies, recent discoveries or plans this puppy has? Should I hold on or dump this and acquire a more aggressive exploration company? I would appreciate any advise one could offer.
It depends on what your goals are short term or long term. If you are a day trader PETD is a good stock to play with as it usually goes up or down more that the market moves in a day. As an example yesterday, at one point in the day it was up more than 10% for the day. If you just wish to hold the stock in your portfolio it is probably a good investment because PETD's book value is just over $29.00/share. Most Exploration and Development (E & P) companies are worth more than there book value because they have to depreciate the well to a zero book value in seven years. PETD probably has more than a thousand wells that they are still producing but their books shows the wells as having zero value. If you look at other E & P companies their stock price is probably one and a half times or more to their book value. My best guess as the value of PETD is around 1.5 times book value of $29.00 = $43.50 or more if someone tries to buy them. Also, as one additional item PETD is spending a lot of their budget is doing a lot of recompletions of their their old wells. Their web site say they are getting 100% return on this investment in one year. That's hard to get in this economy.
The biggest reason for this stock being down is cheap gas. The biggest reason to hold for the long pull is moving to liquid rich shale plays. Both to the liquids part of existing leaseholds, but more importantly to the Utica Shale in eastern Ohio.
PETD has purchased the rights to 40K acres in the Utica and have started the exploration process. This area has a mixture of crude, NGLs and dry gas, but is much more valuable because it sends to be much higher in the liquids. They have said that the goal is to amass at least 100K acres in Ohio. One issue that has slowed them down is the deeds and rights to the land by those that own it. PETD's staff of leasehold experts are slowly working their way thru all the property to make sure they have legal access to the hydrocarbons.
There are not mant shares outstanding, so once they get some traction in the Utica this stock could have a qquick run. As in any of these new plays management is pretty secretive as to what they are doing because of competitors.