Chris Damas
Contrarian, newsletter provider, commodities, industrials

DeeThree Exploration: Undervalued Production Growth

DeeThree Exploration (DTHRF) is one of the fastest growing light and medium gravity oil producers operating in the province of Alberta. The company has proven production growth of high netback oil at a reasonable drilling cost.

DeeThree shares are fundamentally undervalued based on cash flow generation in spite of a 95% increase in reserves reported March 10. DeeThree has the potential to materially increase proven and probable reserves beyond 2014. The stock appears oversold at the March 12 closing price of $8.85 CAD, having lost 10% from the high price reached on March 10 after the 2013 reserves were released.

My DeeThree target price range is 5 times my estimate for 2014 Funds From Operations per share of $2.26-$2.32 for...

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