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Stan Holland

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  • Linc Energy Might Be A Positive Black Swan [View article]
    I am not the best person to ask about ASX listing verses SGX listing, but here is a 4-Oct-2013 video of CEO Peter Bond claiming the benefits.

    It seems to me that the ~$50 million capital raise was accomplished because of the switch.
    Dec 30 07:40 PM | Likes Like |Link to Comment
  • Vaalco Energy Offers An Asymmetric Risk/Reward Opportunity [View article]
    The November 26th, 2013 presentation gives more color on the "humongous" Ombundi Lead in the Kwanza Basin. Potential = 100-400-760 MMbls. This potential is depicted in the cartoon as being spread across three horizons. This makes the high 760 MMbls scenario very unlikely as all three horizons would have to be successful AND all three would have to be at the high end of their possible outcomes. Still very high impact potential for the company, but the risked high case is probably less than one half of the one billion barrels that I dreamed about in my article. The potential will most likely be revised after the 3D seismic is processed.
    Dec 7 09:32 PM | Likes Like |Link to Comment
  • Finding Canadian Oil Bargains - An Update [View article]
    I like the idea of EV/boepd/netbacks, but I am having trouble reconciling your numbers with Strategic Oil's numbers. Specifically, I see EV/boepd/netbacks = 72,600/3924/29.92 = $2,427. What am I missing?
    Sep 21 09:05 PM | Likes Like |Link to Comment
  • HRT Participacoes Has An Asymmetric Risk/Reward Profile - Part 2 [View article]
    After the conclusion of the gas monetization study, it doesn't appear that the natural gas in the Solimoes has much present value.
    Sep 2 09:34 PM | Likes Like |Link to Comment
  • HRT Participacoes Has An Asymmetric Risk/Reward Profile - Part 4 [View article]

    I am still long and haven't sold any shares. In part 2 (link in main article) I made the case how downside risk MIGHT be mitigated, but there is a lot risk here. Do not bet more than you can afford to lose. -Stan
    Aug 26 08:09 PM | Likes Like |Link to Comment
  • Seven Billion Reasons To Own Bankers Petroleum [View article]

    Please correct me if I am wrong, but my interpretation of Slide 11 of their latest presentation is that primary recovery to date in their core area is 7% and their reserves are based on 17% recovery factor. Possible upside in their core area thru water flooding and/or polymer flooding.

    In the southern and periphery area the primary recovery to date is 3% and their reserves are based on 11% recover factor. Possible upside thru primary (I assume they mean that the recovery factor may be similar to their core area), water flooding, and/or polymer flooding.

    Water flooding, when it works, typically yields recovery factors similar to the primary recovery. No guarantee that upside will happen, but with the stock trading at approx half of the 2P PV10 value, the upside is free.

    Aug 18 10:38 AM | Likes Like |Link to Comment
  • HRT Participacoes Has An Asymmetric Risk/Reward Profile - Part 4 [View article]
    According to the latest Chariot Oil & Gas Fact Sheet:

    "Kabeljou well on the Nimrod prospect drilled 3Q 2012. World class source rock encountered, no commercial hydrocarbons found."

    I believe that this is new information is new. The existence of world class source rock on the neighboring block increases the odds that I calculated for Moosehead substantially.
    Aug 4 05:41 PM | Likes Like |Link to Comment
  • Alberta Oilsands Inc - A Potential Cash Windfall That Could Change The Company [View article]
    no debt
    market cap = ~$30 million
    $6.7 million in cash
    Canadian Government owes the company $51 million + ~5% interest

    IMO, this meets the following definition of a Ben Graham Net-Net:
    Aug 4 08:55 AM | Likes Like |Link to Comment
  • Corridor Resources - Limited Downside With 3 Potentially Huge Free Options [View article]

    Per the link below, I believe Corridor had issues fracking the McCully Field and Frederick Brook Shale because both reservoirs are undersaturated to below irreducible water saturations (Sw) and using water based fracks damages the reservoirs.

    Apache tried slick water fracks in the Freddy Brook for economic reasons and appears to have damaged the reservoir badly.

    As far as generating enough cash flow to stay alive, the company has not been profitable from an IFRS standpoint, but has maintained positive cash flow by reducing costs and milking depleting PDP’s. Q1 2013 was very profitable however, as Corridor sold 2/3rds of their production for a fixed price of $8.52/mcf and did even better on the rest as local natural gas prices spiked much higher at Dracut. The company forecasts an elevated premium over Henry Hub for the next several years.

    YE2012 the company had $10.2 MM working capital ($8MM cash), no debt, and expects to have $15.5MM working capital by YE2013. Corridor had 22 producing wells in 2012. 5 more wells are already drilled, but need $19.2MM to hook-up to existing infrastructure. I think fracking is included in that $19.2MM too.

    I believe the worst is behind Corridor.

    Jul 27 11:38 AM | Likes Like |Link to Comment
  • HRT Participacoes Has An Asymmetric Risk/Reward Profile - Part 4 [View article]
    Murombe-1 is a dry hole

    Using the assumptions from the article:

    approx 6% chance of at least Moosehead P50 oil success = 1512 mmbo x $7/bbl x 79% ownership / 657 million fully diluted shares = approx. $13 per share

    approx 1% chance of at least Moosehead P10 oil success = 5500 mmbo x $7/bbl x 79% ownership / 657 million fully diluted shares = approximately $46 per share
    Jul 19 10:04 PM | Likes Like |Link to Comment
  • Horsehead Holding: Buy This Low-Risk Stock With Decent Upside [View article]
    Mohnish Pabrai doesn't buy unless he believes that the stock will be a minimum of 2x in 3 years. His license plate is CMPD26 (compound 26% is 2x every 3 years).

    I am still digging into this company and have no position yet. It seems to me that the major investment thesis is the new plant generating $90 to $110 million of incremental EBITDA (2012 EBITDA = $41 million) - all numbers per the company presentation - I have not verified. I would like to get deeper insight with this story, but I am not there yet.
    Jul 9 08:23 PM | Likes Like |Link to Comment
  • Vaalco Energy Offers An Asymmetric Risk/Reward Opportunity [View article]
    Thank you for taking the time to comment. I would have been disappointed if no one commented.

    1. The CEO has stated that Vaalco stumbled badly with its foray into the U.S.

    2. The company is limited by its partners as to the speed of its drilling programs. Their first partner in Angola (assigned by the Angolan government) was financially dilinquent and it took three years for the government to kick them out. Vaalco is anxious to drill in Angola, long lead time items are ready, and their proposed partner has agreed to drill as soon possible once they are approved.

    CEO Robert Gerry has most of his net worth in Vaalco so he "eats his own cooking."
    Jul 8 08:20 PM | Likes Like |Link to Comment
  • So What's The Deal With Saratoga Resources? [View article]

    Thanks for writing this article, I enjoyed reading it. I believe the company is coming up with the NAV of $9.00 per share by taking the SEC reserves pre-tax PV-10 of $407MM and subtracting the net debt of approximately $130MM and then dividing by the approx. 31MM shares outstanding. I am not sure why you mention subtracting out the production and development expenses because I believe that these are included in the PV10 value.

    You also said that you make adjustments for the pricing premium between WTI vs. HLS & LLS. HLS & LLS are tied to world sea-borne oil prices and WTI is a landlocked price that will move towards world prices when pipelines are de-bottlenecked in a couple of years. I am bullish on oil prices so I don't believe an adjustment is necessary, but I am curious how did you made this adjustment.

    Furthermore, I don't share your concern about the shelf registration. Last time I checked, the CEO owned 6.1 million shares and the President owned 2.6 million shares. It seems very unlikely to me that these gentlemen would dilute themselves.

    The one thing that has kept me away from this stock is the debt to cash flow. The company states it has $30 million of discretionary cash flow (I have not verified this number) which is small compared to the net debt. Also the $127 million of Senior Notes are convertible and due in 2016. At this valuation I am revisiting my thesis though.

    Anyways, thanks again for the article,
    Jun 21 07:57 PM | Likes Like |Link to Comment
  • HRT Participacoes Has An Asymmetric Risk/Reward Profile - Part 4 [View article]

    Thank you for challenging my assumptions. First of all I want to state that I am neither a petroleum engineer, nor do I work in the petroleum industry.

    Moosehead is over 600 kilometers away in a different sedimentary basin so I believe that it is independent.

    Based on the results of the Wingat well, I believe that the source risk is now extremely low for the Baobab prospect. I also believe that oil seeps in the area make the timing and migration risk for Baobab very low too. Furthermore, I believe that reservoir risk and trap risk are the only significant risks for Baobab. Since I believe that the reservoir risk and trap risk between Baobab and Murombe are independent, I believe that Baobab and Murombe are mostly independent.

    Jun 11 06:40 PM | Likes Like |Link to Comment
  • HRT Participacoes Has An Asymmetric Risk/Reward Profile - Part 4 [View article]
    I want to thank everyone for taking time to comment.

    taylbil - As I discussed in part 2 of this series, I believe that HRT's Solimoes assets probably have some value that provides downside protection. However, if the Murombe-1 and Moosehead wells are dusters then there is a substantial chance that you and I will lose most, if not all, of our investment. This stock is not for the risk averse.
    Jun 10 05:40 PM | Likes Like |Link to Comment