Prior to enactment of the Unlawful Internet Gaming Enforcement Act [UIGEA] passed in October 2006, licensees' revenue from Europe-based players was approximately 70% of total revenue; now all revenue is from non-U.S. based players.
In our view, the Company is in a win-win position. Should legislation introduced by Massachusetts representative Barney Frank to repeal the unpopular UIGEA become law, CRYP would benefit handsomely.
However, even without repeal, management is positioning the Company for sustainable growth outside the United States. Recent initiatives include (i) signing new customers, such as an exclusive three year contract for on-line poker with the World Poker Tour; (ii) making a strategic acquisition, which was the acquisition of the poker brand and related assets of Parbet.com, a popular Scandinavian online poker room; (iii) entering a joint venture in Asia to penetrate the high- growth Chinese market with CryptoLogic 's existing games, and (iv) entering a new market: Government-owned casino (a signed three-year agreement to provide both poker and casino software for Holland Casino, the Netherlands' government-owned casino operator).
Provident Energy Trust
Provident Energy Trust (PVX) is the only Canadian Energy Trust to combine upstream oil and gas production in both Canada and the United States with Canada’s second-largest midstream natural gas liquids businesses.
The Company’s upstream production reflects a geographically diverse footprint, from predictable producing regions in the western Canadian sedimentary basin to operating crude oil wells and natural gas facilities in Southern California, west Texas, and Wyoming. Production is approximately 95 percent oil and five percent natural gas. U.S. operations give Provident long-life reserves and an excellent platform for future growth.
Provident’s Canadian upstream business will be strengthened by the May 3, 2007, announcement of the Company’s intention to acquire Capitol Energy, which owns a conventional oil field in Canada's Alberta province. Provident estimates the field holds 30 million barrels of proved and probable oil reserves, which increases Provident's Canadian proved plus probable reserves base by 40 percent.
Consolidated per-barrel operating costs are estimated to be below $5.00 per b.o.e. at Capitol’s producing field.
In addition, Provident calculates the Capitol Energy purchase will increase the Company’s total reserves life index [RLI] by 10 percent to 13.6 years. RLI is a simplified representation of the number of years of oil & gas reserves remaining if production remained constant at current rate(s) of production.
Midstream is a business with long-life physical assets (plants, pipelines, storage facilities, etc.) that complement Provident's upstream production business units.
In our view, the integration of upstream and infrastructure assets offers investors a sustainable yield-play (of 11 percent) with long-term value potential.
PVX vs. CRYP 1-yr chart:
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