Introducing the CVI - Punch Card Portfolio Newsletter

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Tuesday, January 31, 2012

Here is What Petrobank Sold for $225mil

Almost 700 million barrels of contingent resource.  I would have thought they could have received double the actual proceeds.

I do like the strategy change though.  Clean up the balance sheet and focus on smaller, faster Saskatchewan Heavy Oil.

May River June Resource

Petrobank Sells May River


CALGARY, ALBERTA--(Marketwire - Jan. 31, 2012) - Petrobank Energy and Resources Ltd. (TSX:PBG.TO - News) announces that we have entered into an agreement with Grizzly Oil Sands Ulc. to sell our May River property, which includes the Conklin demonstration project, for gross cash proceeds of $225 million subject to normal closing adjustments. Proceeds from this transaction will initially be used to repay outstanding bank debt and will result in Petrobank having a significant positive cash and working capital balance.
This sale allows us to focus our resources and expertise on our near and medium-term conventional heavy oil growth opportunities. Petrobank's 2012 focus is the commercialization of our Kerrobert THAI(R) project targeting increased production and reduced per-barrel operating costs. The May River disposition provides additional balance sheet flexibility to further evaluate our properties at Dawson, Plover and Luseland, as well as pursue additional opportunities.
The transaction is subject to satisfaction of certain customary conditions, including receipt of required regulatory approvals, and is expected to close by the end of February 2012. As part of this sale, the May River regulatory application is expected to be withdrawn.

Natural Gas Supplies Hit Another Record

When do we see a price under $2?

BlackPearl Resources Down On Q4 Results

BlackPearl exits 2011 at 9,500 barrels per day which is lower than exit rate guidance of 11,000 barrels per day.
Chart forBlackPearl Resources, Inc. (PXX.TO)




CALGARY, ALBERTA--(Marketwire - Jan. 30, 2012) - BlackPearl Resources Inc. ("BlackPearl" or the "Company") (TSX:PXX)(FIRST NORTH:PXXS) is pleased to announce the results of its 2011 year-end oil and gas reserves evaluation, contingent resource evaluation and to provide an operations update on the Company's current activities.
Highlights include:
  • 44% increase in total proved and probable reserves to 35.8 million barrels of oil equivalent;
  • Reserve additions of 13.8 million barrels for the year were offset by production of 2.8 million barrels, representing replacement of 495% of 2011 production;
  • The increase in reserves is primarily attributable to new drilling at Mooney and John Lake, as well as initial recognition of reserves for the Blackrod SAGD pilot;
  • Over 99% of reserves are heavy oil; 
  • 752 million barrels of contingent resources (best estimate) on our 3 core properties;
  • A portion of the contingent resource barrels attributable to our thermal project at Blackrod is expected to be recognized as reserves in 2012 after a commercial development application is submitted;
  • Our largest property is the Blackrod SAGD project with 2P reserves and best estimate contingent resources of 650 million barrels of oil and potential production of 80,000 barrels of oil per day;
  • Q4 production of 8,734 boe/day; year-end production in excess of 9,500 boe/day.
John Festival, President of BlackPearl, commenting on the new reserves and resource evaluations indicated that, "Our reserve additions in 2011 are a reflection of the growth we have seen in 2011, but more importantly it is a validation of our three core properties and their performance. The ultimate potential at Blackrod, Onion Lake and Mooney is identified in the resource report and as we advance each project, barrels will be moved from the resource category to the reserves category.
"At Mooney, additional drilling extended the pool to the west, which will eventually lead to an expansion of our ASP (alkali, surfactant, polymer) flood. At Onion Lake, we are delineating the pool with primary drilling and production, and this will lead to a full-scale thermal project on these lands. Our pilot results at Blackrod have moved two million barrels from resource to reserves and we expect many more barrels to be recognized as reserves as we file our 80,000 barrel per day commercial application in 2012.
"Over the last three years we have grown production from 5,000 to 10,000 barrels of oil per day. However, 2012 will be the start of a transition period for BlackPearl as we have now set the stage for growth to 30,000 barrels of oil per day by 2016 as we bring on our thermal projects. We did not meet our 2011 exit target of 11,000 barrels of oil per day due to our decision to alter our primary recovery development plans at Onion Lake to accommodate our thermal project which are over the same lands. We expect to maintain a production level of 10,000 to 13,000 barrels of oil per day over the next several years during this transition period. Some of our cash flow will be spent keeping our production at these levels and the remainder will be used to fund the development of our thermal and ASP flood projects. We are currently evaluating additional funding alternatives to develop these major projects."

Ron Baron Q4 Report

Baron Funds Quarterly 123111

Mart Resources MMT.V Dropping On News Release

Chart forMart Resources Inc. (MMT.V)

Mart Resources dropping hard this morning on the following press release which reveals production shut in for a third of December due to export constraints and a nasty surprise relating to "pipeline losses"


CALGARY, ALBERTA--(Marketwire - Jan. 31, 2012) - Mart Resources, Inc. (TSX VENTURE:MMT) ("Mart" or the "Company") and its co-venturers, Midwestern Oil and Gas Company Plc. (Operator of the Umusadege field) and SunTrust Oil Company Limited are pleased to provide an operational update on the Umusadege field, onshore Nigeria.
UMU-9 Well Update
The UMU-9 well has reached a final total drilling depth of approximately 10,848 feet. As previously announced, the intermediate section drilled to 8,311 feet indicated 260 feet of gross oil pay from eleven sands based on open hole logs. 9 5/8 inch casing was run in the intermediate hole section. The lower 8 1/2 inch deviated section of the well drilled from 8,311 feet to 10,848 feet was open hole logged and indicated an additional 170 feet of gross oil pay in eight sands. This resulted in a total cumulative gross oil pay of approximately 430 feet in the 19 sands encountered by the well.
Pressure and fluid sample tests were taken on the six deepest sands in the 8 1/2 inch hole section with preliminary results indicating five sands containing light oil and condensate and one sand containing mainly gas. Further analyses are being conducted on the samples collected over these sands. The deviated 8 1/2 inch section of the well has now been cemented off, as this hole section was never intended to be completed in the UMU-9 well. Completion and testing operations are currently being conducted on the 9 5/8 section of the well. The Company has retained RPS Energy, independent reserve evaluators, to prepare new reserve reports as of December 31, 2011 and intends to update the year-end reserve report at a future date following testing of the UMU-9 well.
December 2011 Production Update
Crude oil deliveries into the export pipeline from the Umusadege field for the month of December averaged 6,230 barrels of oil per day ("bopd"). Umusadege field downtime during the month was approximately 11.5 days, mainly as a result of export pipeline maintenance and pipeline injection constraints due to limits on export storage tank capacity. The average field production based on producing days was 10,804 bopd.
January 2012 Production Update
Crude oil deliveries into the export pipeline from the Umusadege field for the period of January 1, 2012 to January 30, 2012 averaged 6,959 bopd. During this same period, there was approximately 12 days of field production downtime due to various shutdowns of the export pipeline and export storage tank capacity constraints at the third party export terminal. The average field production based on producing days was 11,754 bopd for the period.
2011 Pipeline Losses
The owners of the export pipeline have notified Mart and its co-venturers that export pipeline owner's estimate of the Umusadege field's share of crude oil lost or taken from the export pipeline during the 2011 calendar year is approximately 213,000 barrels of oil. Mart's share of the crude oil lost or taken will be calculated based upon its average share of production in 2011. The final export pipeline losses to be allocated to the Umusadege field for 2011 are expected to be reconciled with the export pipeline owner by the end of Q1 2012. Mart's share of the estimated charge will be reflected in Mart's December 31, 2011 financial statements.

Chesapeake's Simple Business Strategy?

http://seekingalpha.com/article/327362-despite-what-market-says-chesapeake-energy-believes-it-actually-has-a-simple-business-strategy

Petrobank Lays Off 20 Workers

http://www.calgaryherald.com/business/Petrobank+Energy+lays+workers/6076369/story.html

It would be hard not to read this as making the likelihood of a May River monetization more likely.

Monday, January 30, 2012

Novus Energy (CVE:NVS, NOVUF)

Watch Novus Energy before the open tomorrow morning.  The stock surged 4% in the last half hour of trading on no apparent news to hit a multi-month high of $0.99.

Novus is a small light oil producer focused on the Viking resource play in Alberta and would make a perfect addition to the development inventory of larger Viking players.

Most analyst targets for Novus are in excess of $1.50 so a takeover could be at a significant premium.  At $1 per share Novus trades for  its booked reserves which means the market is ignoring hundreds of unbooked, undeveloped Viking drilling locations.

Chart forNovus Energy, Inc. (NVS.V)

Fairholme Final 2011 Results Are Out

FAIRXFactSheet

Veraz Petroleum Now Up 30% on the Day on Big Volume

Company only has one well, and it is being drilled.  Could be material news for PMG shareholders (80% partner on that well):

Chart forVeraz Petroleum Ltd. (VRZ.V)

Veraz Petroleum (CVE:VRZ) Up Big

Tiny little Veraz Petroleum up from $0.45 to $0.68 on no published news in a couple of days.

Veraz is the 20% partner of Petrominerales (PMG:TSE) on a high impact well in Peru that is currently being drilled (La Colpa 2X).

One has to wonder if something good isn't happening for Veraz and Petrominerales given the movement in the Veraz share price.

Gurus Gone Wild January 30, 2012

Jim Rogers Thinks People Getting MBAs Are Making a Mistake

Emerging Markets Guru Mark Mobius Believes Inflation Is a Concern

Mark Mobius Likes China and Russia

Emerging Markets Guru Mark Mobius Believes Inflation Is a Concern

Pzena Investment Management - Is Value Investing Dead?

Pzena Investment Management Q4 2011 - Is Value Investing Dead?

Chesapeake January 2012 Investor Presentation

CHKJan2012

Saudi Arabia Close to Full Capacity

New Homerun Portfolio Pick - 21st Issue of CVI Newsletter

I sent the 21st issue of my weekly newsletter to subscribers on Sunday.

The newsletter includes two portfolios that I call the Punch Card Portfolio and the Homerun Portfolio.

Included this week was my second addition to the Homerun Portfolio, which is a portfolio that is going to be a diversified collection of high risk / high reward opportunities.  The concept being that a couple of ten baggers will more than offset the inevitable disaster.

My first Homerun pick is up 74% since December 24, which can only be attributed to lucky timing.  This portfolio will be volatile to be sure.

I'll continue to invest my personal capital primarily along the lines of the Punch Card Portfolio which is a much more concentrated portfolio of opportunities that I believe have minimal downside risk and above average upside potential.  This portfolio is also beating the stock market since inception in September, but I don't think  returns should be published until a longer track record is established.

Petrobank in Barron's

By VITO J. RACANELLI
AN DEVELOPER OF OIL SANDS and heavy oil, Petrobank Energy & Resources (PBG.Canada) is unusual: It trades at a sizable discount to a separately traded asset in which it has a 59% stake— PetroBakken(PBN.Canada). That stake is valued at C$1.7 billion, and is worth more than the C$1.5 billion total market cap of Petrobank itself. PetroBakken's market cap is C$2.9 billion. Petrobank closed Friday at C$14.25, while PetroBakken finished at C$15.25, a spread of C$1. The Canadian and U.S. dollar currently trade at about par.
PetroBakken explores for more conventional oil and gas, and produces about 50,000 barrels of oil-equivalent per day (BOE/D). The rest of Petrobank's assets, like the May River oil sands and Kerrobert heavy-oil projects, among others, are in the exploration and evaluation stage. Even so, Petrobank has 95 million barrels of reserves, not including PetroBakken.
How is this anomalous valuation possible, one might ask, especially since Petrobank has less than C$60 million of its own debt, and also owns those interesting—albeit risky—heavy-oil and oil-sands development projects? It would seem that a holder of Petrobank is getting the non-PetroBakken assets for free.
Let's step back a moment. Both companies are profitable; however, Petrobank has had ups and downs, and derives its operating budget mainly from some C$50 million in cash dividends provided by PetroBakken. Petrobank holds about 1.03 shares of PetroBakken for each Petrobank share. Just one year ago, Petrobank shares traded at a C$3 premium to PetroBakken, but that premium turned negative through 2011, and was as wide as a C$3 discount a few weeks ago. It has since narrowed, but is still at a C$1 discount. Shouldn't Petrobank trade at a premium to Petrobakken?
David Heden, a hedge-fund manager at K2 & Associates Investment Management, says several issues account for the discount. First, Petrobank pays no dividend, but PetroBakken does, with a yield of nearly 6.3%. So the search for income last year made PetroBakken more attractive than Petrobank. In 2011, PetroBakken shares fell 41%, but Petrobank fell 58%.
Additionally, says Ben Cubitt, a principal at hedge-fund Samara Fund, there's the cost to hedgies who might buy Petrobank: Such an investment would typically involve shorting PetroBakken, incurring both the cost to borrow and the carrying cost of paying out that dividend to the lender of PetroBakken shares. Third, and perhaps most important, he adds, many hedge funds are betting that Petrobank will accomplish a complicated, tax-free spinoff of its PetroBakken shares to Petrobank holders, but the spread between the shares waxes and wanes with speculation about the spinoff.
A tax-free spinoff won't be easy, and afterwards Petrobank would have to find a revenue source, as currently its budget is funded by those PetroBakken dividend payments. But oil-sands and heavy-oil projects typically work with crude oil above $85 per barrel. Heden believes that Petrobank management is shareholder-friendly, and that a spinoff will happen this year. K2 maintains a large holding in Petrobank and shorts PetroBakken. Heden notes, for example, that Petrobank was able to make an analogous tax-free spinoff of Petrominerales (PMG.Canada) in late 2010, so there's a track record. The company hasn't officially said anything about a spinoff. It didn't respond toBarron's requests for comment by press time.
Heden says that in the event of a spinoff, the resulting Petrobank stub, which would own the non-PetroBakken assets, could be worth about C$5 per share. A recent BMO Financial Group report gave the stub a C$2 to C$4 value. Petrobank's May River project, for example, could get a go-ahead year and can produce 10,000 BOE/D, Heden says.
Theoretically, in a tax-free spinoff, the Petrobank holder would get roughly one share of PetroBakken—now worth C$15.25 each—plus a stub share in Petrobank's remaining businesses, for a total of C$17.25 to C$20.25 per share.
It's a popular play among hedgies in Toronto. While Petrobank does have some interesting unconventional oil plays, the hedge funds are in this stock for the spinoff. If it doesn't happen or is delayed, however, the value could take much longer to materialize, if at all.
Both companies' stocks also trade over the counter in the U.S. (tickers: PBEGF and PBKEF, respectively), but trading is illiquid.

Thursday, January 26, 2012

Apache Makes $2.85billion Anadarko Basin Acquisition

Apache to Acquire Cordillera Energy Partners III LLC for $2.85 Billion 

- 254,000 net acres in liquids-rich plays in Anadarko Basin of Texas, Oklahoma 
- Net production of 18,000 barrels of oil equivalent per day 
- Proved reserves of 71.5 million boe 
- 14,000 potential drilling locations 


HOUSTON, Jan. 23, 2012 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today announced that it has agreed to acquire Cordillera Energy Partners III LLC, a privately held company with substantial operations that include approximately 254,000 net acres in the prolific Granite Wash, Tonkawa, Cleveland and Marmaton plays in western Oklahoma and the Texas Panhandle, for $2.85 billion. 

In addition to estimated proved reserves of 71.5 million barrels of oil equivalent and current net production of 18,000 boe per day, Cordillera has assembled a leading acreage position with significant resource potential including 14,000 potential drilling locations in liquids-rich Anadarko Basin plays. The acquired acreage is characterized by high working interest and operatorship; approximately half is held by production. 

"This is an important growth step for Apache — a unique bolt-on opportunity that more than doubles Apache's acreage in a highly liquids-rich fairway in the Anadarko Basin," said G. Steven Farris, chairman and chief executive officer. "Apache has been active in the Basin for more than 50 years; the experience we have gained drilling 500 wells in the Granite Wash play — including 79 horizontals drilled since 2009 — gives us an in-depth understanding of the geology and the operating environment and will enable us to hit the ground running. 

"Multiple, stacked horizontal targets provide decades of potential drilling locations," Farris said. "Because 80 percent of revenue comes from liquid hydrocarbons production, this transaction provides compelling economics at current commodity prices." 

The acquisition is expected to be accretive to Apache's earnings and cash flow beginning in 2012. The development drilling program is self-funding beginning in 2013. 

The sellers, including EnCap Investments, other institutional investors and Cordillera management will receive approximately $600 million in Apache common stock subject to customary lock-up provisions. The balance of the consideration will be paid in cash to be funded with debt. The effective date of the transaction is Sept. 1, 2011, with closing anticipated in the second quarter, subject to regulatory approval and customary closing conditions. 

"This transaction presents a tremendous opportunity for Apache to combine the Cordillera assets with its legacy western Anadarko Basin position, creating a platform for a multi-decade development program in some of the most economic, oil- and liquids-rich gas targets in the onshore United States," said George H. Solich, Cordillera's president and chief executive officer. "The combination is an excellent outcome for the Cordillera shareholders. We are taking a meaningful amount of the consideration in Apache shares, reflecting our confidence that the quality of the asset base will continue to yield economic growth in production and cash flow for years to come." 

Cordillera will continue to acquire acreage in the area on Apache's behalf through closing. 

A wash, including the Granite Wash, consists of a series of thick, multi-layer, liquids-rich sandstones and conglomerates. While it is considered "tight" by conventional standards, the Granite Wash possesses reservoir properties superior to typical shale resource plays, and responds well to horizontal drilling with multi-stage fracturing completions. A typical producing column in the acreage fairway is more than a mile thick with up to five liquids-rich Granite Wash targets and five additional oil-bearing tight sandstone targets. Approximately 50 percent of the hydrocarbon stream is liquid — condensate and natural gas liquids. Additional deep gas horizons include the Skinner, Atoka and Morrow. According to Oklahoma regulatory agencies, more than 60 separate formations currently produce oil and gas in the fairway. 

As a result of Apache's shift to horizontal drilling with multi-stage completions, horizontal wells drilled in the last three years — all successful — now account for about half of Apache's Central Region production which totaled about 40,000 net barrels of oil equivalent per day at year-end 2011. "With this growth step, we expect to more than triple the pace of our operated activity in the multi-play fairway of combined Apache and Cordillera acreage during 2012," Farris said. 

Petrobakken Drilling at Swan Hills

http://www.investorvillage.com/groups.asp?mb=17397&mn=2889&pt=msg&mid=11384338

Some of that 120k acres we know little about and most certainly pay nothing for in the current share price.

Tweedy Browne Q4 2011 Commentary

TweedyFundCommentaryQ4,Final

Gurus Gone Wild January 26, 2012

Muhlenkamp Presentation

Ron Muhlenkamp Presentation - U.S. Politics, Europe and China - Why Do We Care?

Mark Mobius on the Year of the Dragon

Emerging Markets Guru Mark Mobius – The Year of the Dragon

Goodhaven (Former Berkowitz Partners) First Annual Report

First Annual Report from Former Fairholme Partners Pitkowsky and Trauner

Ackman's New CEO Explaining What He Is Doing With J.C. Penney

Ackman

Petrobakken Issues $900 Million in Notes, Repays $450 Million of Convertibles

http://ca.finance.yahoo.com/news/petrobakken-announces-pricing-terms-senior-133000350.html

Upon completion of the Notes Offering, PetroBakken will have significantly improved our balance sheet and liquidity position. Proceeds from the Notes Offering will be used to repurchase US$450 million of convertible debentures, with the remainder used to repay a portion of our secured credit facility. Following the completion of the Notes Offering and the recently announced asset sale, we expect to have approximately $675 million drawn on our credit facility, which is anticipated to be increased to $1.5 billion upon closing of the Notes Offering. 


So after this Petrobakken is going to have available in 2012:


- $825 million under the credit facility ($675 million drawn out of $1.5 billion)
- If you go to page 8 of this report (http://www.petrobakken.com/wp-content/uploads/2012/01/PBN-2012-01-13-Corp-Pres.pdf) you will see that at $100 WTI Petrobakken will have $1.1 billion to $1.2 billion in funds flow from operations

That $1.1 billion is at roughly 52,000 barrels per day average for 2012, which is guidance assuming $700 million in capex.

So Petrobakken has $825 million under the credit facility plus $1.1 billion in cash flow.  That is $2 billion of liquidity available in 2012 with a stated capex budget of $700 million and a dividend payment of about $100 milllion.  That is about $1.1 billion of cash not spoken for.

They likely need to keep $300 million available to for the remaining converts, but you have to think that either capex and production are going to be increased significantly or something else is in the cards.

Gurus Gone Wild January 25, 2012

Leon Cooperman

Hedge Fund Legend Leon Cooperman on His Market and Economic Outlook

Ackman on J.C. Penney and CP Rail

Bill Ackman on CNBC – Getting JC Penney Back on Track, Discussing CP Rail

Wednesday, January 25, 2012

Petrobakken Ups High Yield Issue to $900mil

http://online.wsj.com/article/BT-CO-20120125-718202.html

They have so much liquidity now I almost think they might be about to do something.

Papa Shifts EOG Focus to Stay Ahead of the Trend

http://www.rigzone.com/news/article.asp?hpf=1&a_id=114525

Latest Wild Stream Presentation

Wild Stream Nov 2011 Presentation

Wild Stream Acquisition News Release

CALGARY, ALBERTA (January 24, 2012) – Wild Stream Exploration Inc.  (TSXV:
WSX) ("Wild Stream") is pleased to announce that it has entered into an arrangement
agreement (the "Agreement") whereby Crescent Point  Energy Corp. ("Crescent Point") will
acquire all of the issued and outstanding common shares of Wild Stream in a transaction valued
at approximately $770 million (the "Arrangement"). Under the terms of the Arrangement each
common share of Wild Stream shall be exchanged for 0.17 common shares of Crescent Point,
1.0 common share of a new light oil focused junior exploration company ("Newco")  and 0.2 of
a common share purchase warrant ("Newco Warrants").  Each whole Newco Warrant will
entitle the holder to acquire one common share of Newco at an exercise price equal to its
defined net asset value of $1.61 per share at any time on or before the close of business on
thirtieth (30th) day following the closing of the Arrangement.  The price and corresponding
defined net asset value is subject to review and final approval of the TSX Venture Exchange, of
which there is no assurance


Newco will be a new publicly listed junior exploration and production company led by Neil
Roszell as President and CEO and four members of Wild Stream’s current management team.
Newco will be a growth entity with approximately 1,000 boe/d of 100% oil weighted
production.  The production is 100% focused in the Dodsland area of southwest Saskatchewan
and is complemented by a dominant land position consisting of approximately 57,000 net
undeveloped acres prospective for Viking light oil  in the area.  The Agreement contemplates
that Newco will assume $43.5 million of existing Wild Stream debt and that Crescent Point will
obtain 2.65 million shares of Newco at a deemed price of $1.61 per Newco Share.
Wild Stream’s board of directors and management view this as an advantageous transaction for
Wild Stream shareholders.  Existing Wild Stream shareholders will receive value for a large
portion of the corporation through the diversification and liquidity of the large oil portfolio
provided by Crescent Point as well as access to an  anticipated monthly dividend stream.
Additionally, Wild Stream shareholders will maintain ownership in Newco, which will own
assets that Wild Stream’s management believe to contain value and which under its direction,
can be unlocked.


The Arrangement
Consideration Received by Wild Stream Shareholders
 1.0 common share of Newco     $1.61/share
 0.17 common share of Crescent Point   $7.94/share
 Total Value (not including Newco Warrants)   $9.55/share


Newco Net Asset Value January 2012
 Oil Assets$ 134.9 million
 Undeveloped Land$    29.0 million
 Less:  Assumed debt    $    43.5 million
 Net Asset Value    $ 120.4 million
 Basic shares74.8 million shares
 Net Asset Value    $1.61/share


Assuming the Newco Warrants are fully exercised, approximately $23.1 million will be raised for
Newco which will initially be used to reduce the indebtedness assumed from Wild Stream
pursuant to the terms of the Arrangement.  The exercise of all or any of the Newco Warrants
referred to in this news release cannot be assured and assumptions made in this respect are
solely for the purposes of the calculations set forth herein.
Concurrent with the completion of the Arrangement, Newco will complete a private placement
of up to 14.375 million units ("Units") of Newco at $1.61 per unit.  The private placement will be
offered to the proposed employees of Newco as well  as the proposed management and
directors of Newco and their close relatives, friends and business associates.  Each Unit will
consist of 1 common share of Newco and 1 common share purchase warrant of Newco
("Purchase Warrant"). Each Purchase Warrant will entitle the holder to acquire one common
share of Newco at an exercise price of $2.00 for a  period of three years from the date of
issuance.  Completion of the private placement is subject to certain approvals, including TSX
Venture Exchange approval and disinterested shareholder approval.
If all Newco Warrants are exercised and the private placement is fully subscribed, Newco would
have had a positive cash position of approximately $3 million as at January 1, 2012.
Transaction Metrics
Based on the above expectations for the Arrangement, and after adjusting for estimated land
and seismic value of $18 million, the estimated acquisition metrics offered by Crescent Point,
excluding Newco, are as follows:


Production:
• $109,800 per producing boe based on 5,400 boe/d
Reserves:
• $20.66 per proved plus probable boe based on 28.7 million mboe
• $33.69 per proved boe based on 17.6 million boe


Strategic Rationale
The Arrangement is a culmination of over two years  of exploration and development over
which the Company grew production from approximately 425 boe/d to current production of
approximately 6,400 boe/d. Management views the Arrangement as an opportunity for Wild
Stream shareholders to realize value for a large portion of the Company’s assets while
continuing to participate directly in the upside of the Dodsland play.
Through ownership in Crescent Point, the Arrangement allows shareholders to participate in
the continued development of the Upper and Lower Shaunavon plays and gain exposure to a
large, highly liquid, premium oil company with a dominant position in the Bakken, a rapidly
growing Beaverhill Lake position and an extensive development drilling inventory on their large
oil pools throughout Saskatchewan and Alberta. Shareholders will also receive a monthly
dividend on each Crescent Point share held in accordance with Crescent Point’s dividend policy.
The Arrangement also allows Newco management to immediately apply its expertise at
creating value in junior oil and gas entities following completion of the Arrangement. Newco
will be well-capitalized at inception with a cash balance, no net debt, significant management
ownership and a premium focused portfolio of assets. Management believes the Dodsland
asset has upside potential for shareholders with over 300 drilling locations and 57,000 net acres
of undeveloped land.
The Wild Stream team has a solid track record of building shareholder value at junior oil and gas
companies for over 10 years with Wild Stream, Wild  River Resources Ltd., Prairie Schooner
Petroleum Ltd. and Great Northern Exploration Ltd.  Based on the initial financing completed in
each venture Wild Stream generated a 108% return over 27 months while Wild River Resources
Ltd. generated a 100% return over 28 months.

Crescent Point Buys Wild Stream for $770mil

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/crescent-point-to-buy-wild-stream-for-770-million/article2314227/

Thursday, January 19, 2012

Gurus Gone Wild January 19, 2011

Marc Faber

Marc Faber – Could Be Time to Get Back into European Stocks

Scroggin Capital

Scoggin Capital Co-Founder Sees Asset Managers as Good Investments

Hagstrom on Microsoft

Buffett Author and Investment Manager Hagstrom Likes Microsoft for Its Growth Potential

Pickens on Obama and the Pipeline

Boone Pickens – We Are Complete Fools for Canceling the Keystone XL Pipeline

Analysts on Petrobakken Improvements

http://www.investorvillage.com/uploads/8056/files/72513-DL_PBN_01192012.pdf

http://www.investorvillage.com/uploads/8056/files/blackmont46291.pdf

Record Lows for Natural Gas

Anyone feeling contrarian out there?

Petrobank Presentation Webcast Wednesday Jan 18, 2012

Interesting question posed on whether May River is up for sale:

http://www.petrobank.com/investors/presentations-webcasts

Billionaire Harold Hamm on Obama and Keystone Pipeline

Wednesday, January 18, 2012

Petrobakken Deals With The Feb 2013 Bond Put Option

As I have tried to suggest to anyone who will listen.....the put option would be dealt with.

Step one create room under (and increase) the existing credit facility:

CALGARY, ALBERTA--(Marketwire - Jan. 18, 2012) - 

NOT FOR DISSEMINATION IN THE UNITED STATES OR RELEASE OVER UNITED STATES WIRE SERVICES

PetroBakken Energy Ltd. ("PetroBakken" or the "Company") (TSX:PBN), today announces that we plan to commence, subject to market conditions, a private placement offering of US$750 million aggregate principal amount of senior notes due 2020 (the "Notes"). The Notes will be senior unsecured obligations and guaranteed on a senior basis by each of the Company's subsidiaries who are guarantors under our senior secured credit facility and certain future subsidiaries. 

A portion of the net proceeds from the proposed offering of Notes will be used to fund our tender offer for up to US$450 million aggregate principal amount of our outstanding 3.125% convertible bonds due 2016, which was also announced today, with remaining proceeds used to repay indebtedness under our senior secured credit facility. 


Concurrent with the Notes offering PetroBakken has requested that our existing senior secured credit facility be increased by $150 million, providing for total credit availability of $1.5 billion, with a maturity date of June 2, 2014. As at December 31, 2011, we had $1.2 billion drawn on this credit facility.


Step two retire a good chunk of the convertible bonds:


CALGARY, ALBERTA--(Marketwire - Jan. 18, 2012) - 

NOT FOR DISSEMINATION IN THE UNITED STATES OR RELEASE OVER UNITED STATES WIRE SERVICES 

PetroBakken Energy Ltd. ("PetroBakken" or the "Company") (TSX:PBN), is pleased to announce an invitation to eligible holders of the Company's 3.125% Senior Unsecured Convertible Bond Issue bearing ISIN NO 001 0563240 (the "Existing Bonds") to submit offers to sell their Existing Bonds to PetroBakken for cash consideration (the "Invitation"). The Invitation is in connection with a proposed issuance by the Company of US$750 million senior notes (the "Notes Offering"), which was announced today, will be made for Existing Bonds having an aggregate principal amount of up to US$450 million, and will be conditional upon the successful completion of the Notes Offering on terms satisfactory to PetroBakken. The purchase price range under the Invitation for the Existing Bonds is from US$95,000 to US$100,000 per US$100,000 of principal amount, with the final price to be determined based on a modified Dutch Auction Procedure. 

The modified Dutch Auction Procedure will allow bondholders to submit either: (i) competitive offers specifying the price per Existing Bond that a bondholder would be willing to accept as the purchase price and the principal amount of Existing Bonds that the holder is tendering at that offering price, subject to certain minimum amounts; or (ii) non-competitive offers to sell Existing Bonds to PetroBakken that do not specify a price but do specify the principal amount of Existing Bonds that the bondholder is willing to sell. All bondholders whose offers are accepted by PetroBakken will be entitled to the same purchase price, determined at the discretion of PetroBakken, subject to certain limitations. 

The Next Bakken Homerun

http://seekingalpha.com/article/320158-the-next-bakken-home-run

Tuesday, January 17, 2012

Venoco Getting Taken Out at $12.50 Per Share

I tried to tell you......of course I didn't listen to myself either.

Venoco (VQ) to Be Acquired at 66% Premium to the October 2011 Price When the Company Was Suggested by GuruFocus

Saudis Want $100 Oil

What happened to $75 being the "desirable" price for both producers and consumers?

As a holder of a portfolio loaded with oil reserves and resource plays I would like to say thank you.

As we saw even in 2009, if the Saudis want the price up they can get it done.  I'm not sure I believe that they can hold it down however.

http://www.google.com/hostednews/afp/article/ALeqM5hEkWwDBZNDKG72X4uFx49AsnrDdg?docId=CNG.15cf2b0f43c60cddc27639ac79e24966.391

Saturday, January 14, 2012

Newsletter Issue Number 19 - Will Be Sent to Subscribers Sunday

The 19th issue of my weekly newsletter will be sent to subscribers Sunday, January 15.

This week I will be making an addition to the Punch Card Portfolio and will have updates on several existing holdings which had news in the past week.

The Punch Card Portfolio attempts to invest with companies that have assets that protect downside risk and offer lots of upside if the stars align.

Friday, January 13, 2012

Petrobank January 2012 Presentation

PetrobankJan2012

Slowly Starting to Learn About Petrobakken's New Oil Plays

http://seekingalpha.com/article/319497-petrobakken-playing-cards-about-new-oil-resource-plays-close-to-the-vest

Thursday, January 12, 2012

Petrobakken Update - New Plays Test At Commercial Rates

CALGARY, ALBERTA--(Marketwire - Jan. 11, 2012) - PetroBakken Energy Ltd. ("PetroBakken" or the "Company") (TSX:PBN), is pleased to announce that average production for the month of December, 2011 (based on field estimates) exceeded 50,000 barrels of oil equivalent per day ("boepd") (87% light oil and NGLs), a 23% increase over third quarter 2011 production and an 18% increase over December 2010 production.
We remained active in all business units into December, with field operations tailing off through the end of the year as we completed our capital program ahead of schedule. Our December average production of over 50,000 boepd was comprised of more than 23,400 boepd from our Bakken business unit, over 16,500 boepd from our Cardium business unit (with 1,450 boepd currently shut-in awaiting tie-in operations), and the remainder of the production generated by our Saskatchewan Conventional and AB/BC business units.
2011 was another very active year for us, during which we drilled 293 (205 net) wells. Fourth quarter activity saw a total of 82 (54 net) wells drilled, with 23 (16 net) wells drilled in the Bakken, 34 (22 net) wells drilled in the Cardium, 21 (12 net) wells drilled in our Saskatchewan Conventional business unit and 4 (4 net) wells in our AB/BC business unit. At the end of the year, we had an inventory of 15 net wells waiting to be completed or placed on production. Of these wells, one was in the Bakken and eight wells were in the Cardium, with the remainder in our Saskatchewan Conventional and AB/BC business units. Of particular note, two of our new prospect wells in Alberta have tested commercial quantities of light oil with the other two wells awaiting completion and testing operations.
We are pleased to reiterate our initial capital plan for 2012, which has been designed to allow us to build on our 2011 operational success. We anticipate capital development expenditures of approximately $700 million, primarily focused on horizontal drilling and completions, predominantly in the Bakken and Cardium light oil plays. We expect that this drilling-focused activity will generate a 2012 exit production rate of between 50,000 and 54,000 boepd. Our estimated year-over-year average production growth is expected to exceed 15%, on an absolute and per-share basis. We anticipate this initial 2012 program to be executed entirely from funds from operations, with surplus cash flow available to fund dividends and debt repayment.
We previously announced our intention to expand our hedging program for the first half of 2012 to provide further cash flow security and we have achieved our intended target, with 20,000 bopd of WTI hedged at an average floor price of approximately US$84 and a ceiling of US$112. We continue to add to our longer term hedge position and for the second half of 2012 we have 9,750 bopd of WTI hedged at an average floor of approximately US$77 and a ceiling of US$119. In 2013, we have 8,000 bopd of WTI hedged with an average floor of approximately US$77 and a ceiling of US$121.
At the end of December, PetroBakken had $1.2 billion drawn on our three year, $1.35 billion credit facility (essentially unchanged from the end of June), leaving us with over $150 million of credit capacity available on the current line, in addition to our significantly increased cash flow due to our record production levels. As previously disclosed we are continuing to pursue or evaluate various alternatives to increase our liquidity in 2012, in advance of the potential exercise of the put option on some or all of our US$750 million convertible debenture in February 2013, over and above what is expected to be generated from our operations and our implemented Dividend Reinvestment Program. These alternatives may include adjustments to our capital program and/or altering our dividend to provide additional free cash flow, issuing additional debt instruments or equity, renegotiating the terms of the existing convertible debentures or realizing value through asset sales. We look forward to updating our shareholders as we make progress on these alternatives and execute our 2012 capital program.

Now the CEO of Connacher is Gone

http://www.theglobeandmail.com/globe-investor/connacher-ceo-exits-company-after-shakeup/article2299890/

Wednesday, January 11, 2012

Potential Exposure to 27 billion barrels of oil, Enterprise value under $100mil

This was the first addition to my newsletter's "Homerun" portfolio near the end of December.

Since it is up 50% (pure luck) since I included it in the newsletter, I didn't think subscribers would mind me writing publicly about the company.  I hope to add quite a few additional investments of this type to the portfolio through 2012 so that it is well diversified.

Thought it would be fair to provide one sample:

http://seekingalpha.com/article/318863-petrofrontier-sitting-on-27-billion-barrels-of-prospective-oil-resource

Cobalt Insider Selling Prior To Drilling Success

http://seekingalpha.com/article/318719-mixed-signals-from-cobalt-s-exploration-campaign-and-insider-activity

Bomb Kills Iranian Nuclear Expert

http://www.google.com/hostednews/ap/article/ALeqM5hufiPCvCZOut3uvQnPUWi07FPVbw?docId=521de902dd214937bec14b96f4ecb4eb

Shale Drilling Won't Cause Dangerous Quakes - UK Scientists

http://www.bloomberg.com/news/2012-01-10/shale-drilling-won-t-start-dangerous-quakes-u-k-scientists-say.html

Hunter Harrison Keen to Take Reins at CP

http://www.theglobeandmail.com/globe-investor/hunter-harrison-keen-to-take-the-reins-at-cp/article2298096/

Tuesday, January 10, 2012

Sunday, January 8, 2012

Reuters Article on GasFrac

http://www.reuters.com/article/2011/11/22/us-shale-propane-idUSTRE7AL1ML20111122?type=GCA-GreenBusiness&feedType=RSS&feedName=GCA-GreenBusiness&rpc=43

18th Issue of Investing Newsletter Sent to Subscribers

My weekly investing newsletter was just sent to subscribers.

This week I take a look at a tiny Canadian oil producer which has virtually all of its intrinsic value hidden in undeveloped unconventional acreage.  Insiders own 30% of the company and will surely look for a value realizing event at some point.

I also update my current thoughts on the 12 current holdings of the Punch Card and Homerun Portfolios.

Thursday, January 5, 2012

Globe and Mail on Connacher Oil and Gas

Pretty much the same take I had.  Perhaps an activist can force a sale.

I don't own any.  And likely won't in the future.

http://www.theglobeandmail.com/report-on-business/connacher-oils-strategy-shift-leaves-shareholders-fuming/article2293110/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Home&utm_content=2293110

Buffett Insider Don Graham is Buddies with Zuckerberg

http://online.wsj.com/article/SB10001424052970203686204577116631661990706.html?mod=googlenews_wsj

Sandridge's Tom Ward Talking to Cramer

Gurus Gone Wild January 5, 2011

Gundlach, the bond guru:

Bond Guru Jeffrey Gundlach of Doubleline Capital on the Future of Bonds, Mortgage Market

John Burns, the housing guru:

Housing Guru Says It Is Time to Wager on Housing Recovery

Tom Russo, sensible value investing guru:

Housing Guru Says It Is Time to Wager on Housing Recovery

Charlie Munger, grumpy old guru:

13 Investing Quotes from Charlie Munger

Wilbur Ross, vulture guru:

Wilbur Ross Weighs In on the Republican Race and Problems Facing America

Another Day, Another $4 billion of Deals in the Unconventional Resource Sector

http://seekingalpha.com/article/317611-another-day-another-4-billion-of-transactions-in-unconventional-oil-and-gas-resources

Connacher's Board Throws Investors a Nasty Curveball

http://seekingalpha.com/article/317566-connacher-oil-s-board-throws-a-nasty-curve-at-investors

Wednesday, January 4, 2012

Top Value Trades from First Eagle

Homerun Portfolio Vs Punch Card Portfolio

Starting with the December 24, 2011 issue of my newsletter I added my first position to a high risk / high reward "Homerun" portfolio.

Over the past three years I've missed out on several multi-baggers because I refused to add what I viewed as more speculative names to my concentrated portfolio.  I'm a bit frustrated by this as I'm certain I've cost myself money and the Homerun portfolio will be my attempt to create a diversified portfolio of more speculative names. The idea being that the odd multi-bagger more than makes up for the odd disaster.

I've only added one name to the Homerun portfolio so far and wouldn't you know it is up 40% in a couple of weeks.

Clearly this is due to nothing more than luck at this early stage, but I'm extremely interested to see which of my two portfolios perform better over the next several years.  The concentrated Punch Card Portfolio or the diversified Homerun Portfolio.

The best part of the Homerun Portfolio for me is that it forces me to turn over more rocks for my subscribers increasing the chances I find something that might interest them.

Adding the $2 billion Total JV to the Chesapeake Scorecard

http://seekingalpha.com/article/317383-a-2-billion-deal-with-total-the-latest-update-for-the-chesapeake-energy-joint-venture-scorecard

Iran Oil Ban May Send Brent to $125 - SocGen

http://business.financialpost.com/2012/01/04/iran-oil-ban-may-send-brent-to-125-socgen/

ATP January 4, 2012 Presentation

ATP - Pritchard Capital Energize 2012 Presentation (Final v3)

Goldman Sachs Day on CNBC

Niobrara - The Upcoming Oil Boom

http://www.coloradoan.com/article/20120104/NEWS01/201040347/Niobrara-upcoming-oil-boom

Connacher Fires Top Executives - Shelves JV Initiative

Interesting.

Company says no thanks to anonymous bid for company.  Now gets rid of top execs and says operations have improved and are therefore shelving JV initiative.

http://www.theglobeandmail.com/globe-investor/connacher-oil-shakes-up-executive-offices/article2290967/

Tuesday, January 3, 2012

Iraq Holds Back on Exxon Kurdish Deal

http://ikjnews.com/?p=2743

Chesapeake PR on the Total/Utica Joint Venture

OKLAHOMA CITY, Jan 03, 2012 (BUSINESS WIRE) --Chesapeake Energy Corporation (NYSE:CHK) today announced the completion of a joint venture ("JV") transaction with Total E&P USA, Inc., a wholly owned subsidiary of Total S.A. (NYSE:TOT, FP:FP) ("Total"), whereby Total acquired an undivided 25% interest in approximately 619,000 net acres in the liquids-rich area of the Utica Shale. Of the JV acreage, approximately 542,000 net acres were contributed to the JV by Chesapeake and approximately 77,000 net acres were contributed by Houston-based EnerVest, Ltd. and its affiliates ("EnerVest"). The JV area covers all or a portion of 10 counties in eastern Ohio (the "JV AMI").
The transaction, which closed on Friday, December 30, 2011, resulted in combined value of approximately $2.32 billion, of which approximately $2.03 billion was received by Chesapeake and approximately $290 million by EnerVest. Approximately $610 million was paid to Chesapeake in cash at closing and approximately $1.42 billion will be paid in the form of a drilling and completion cost carry, which Chesapeake anticipates fully receiving by year-end 2014.
Chesapeake will serve as the operator of the JV and will conduct all leasing, drilling, completing, operating and marketing activities for the project. The agreement provides that Total will acquire a 25% share of all additional acreage acquired by Chesapeake in the JV AMI. Total will also participate with Chesapeake and EnerVest in midstream infrastructure related to production generated from the assets with a 25% interest.
Jefferies & Company, Inc. acted as financial advisor to Chesapeake on the transaction.
Management Comments
Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented, "We are pleased to extend our existing relationship with Total as a JV partner in the Barnett Shale to now include the Utica Shale. We believe that the Utica Shale is a world-class asset with world-class returns and now we have a world-class partner to help develop the play more aggressively than we could have with our own resources. This Utica transaction is our seventh significant JV and in these seven JVs, Chesapeake has sold approximately 1.5 million net acres for total leasehold consideration of $14.8 billion while retaining 3.6 million net acres as of the JV date with an indicated value by the JV partners of $45.7 billion."
Yves-Louis Darricarrere, Total Exploration & Production's President, stated, "Total is delighted to be building on our technical successes with Chesapeake in the Barnett Shale JV and to expand into the liquid-rich Utica Shale play in Ohio. This is consistent with our strategy to develop positions in unconventional plays with large potential and, in this case, with value predominantly linked to oil price. This JV will provide us with a material position in a valuable long-term resource base under attractive terms and with a top-class operator. Total is conscious of the environmental aspects linked to developing shale acreage and is confident in Chesapeake's capacity to manage the Utica Shale operations in a responsible manner, utilizing the highest industry standards in this respect."