Gear Energy: Cashing In On An Acquisition

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About: Gear Energy Ltd. (GENGF), Includes: BTE
by: Long Player
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Long Player
Long/short equity, value, special situations, contrarian
Summary

The light oil improvements will lead to superior light oil profitability eventually. Already, profitability has materially improved.

Gear Energy's heavy oil profitability is among the best in the industry. Paradise Hill has an ROR of 105% at WTI $50.

Gear Energy trades at a cash flow discount to Baytex Energy using enterprise value despite better profitability and less debt.

The Gear Energy Stryker Exploration could prove to be extremely accretive in the future.

Higher profitability and lower debt gives Gear Energy proportionately more cash flow to invest in growth. Gear Energy will probably grow at a faster rate than Baytex Energy.

About a year ago, Gear Energy (OTCPK:GENGF) merged with Stryker Exploration (TSX VENTURE:SKX). Shareholders may have wondered initially why the company merged with such a small competitor for about an additional