It is no secret that one of my favorite little stocks is Buccaneer Energy, LLC (BCC:ASX). For several years I have written about the team, the projects, the ups and the downs. However, recently it seems that others have begun to notice. I saw a Wall Street Journal article by Ryan Dezember that outlined the company’s strategy in Alaska. It was followed by a Bloomberg piece a few days later that outlined the purchase of the Rig written by David Wethe and Edward Klump.
Of course the trades like the Oil and Gas Investor, the Oil and Gas Journal, Hearts E&P, and others have begun talking about Buccaneer Energy on a weekly basis. Recently RigZone did a rather long piece on the Buccaneer. In Alaska this company is hard to miss with coverage in all the local papers on an almost daily basis. I new things were starting to buzz when Energy Intelligence’s Oil Daily did a piece on the Alaskan market and mentioned Buccaneer Energy and quoted Curtis Burton as he described why he was leading the pack there. They were even featured on CBS in Anchorage for having the courage to ask the community to help them rename the Adriatic XI to something more suitable to the Alaskan adventure.
Following Buccaneer has been like waiting for everyone else to arrive at a party where you have all ready tasted the hors d’oeuvres and sampled the main entre. Those of us who know the company can't believe that they have not been discovered by everyone else. Since last February the stock has steadily downtrended uninterrupted while the company has regularly put out positive news and made some real progress on an excellent business plan.
Management has made several presentations of late where they state their goal is to mitigate risk and maximize opportunity. Recently Curtis Burton was one of the Key Note speakers at the Oil Councils Energy finance conference in New York. At the same conference Executive Vice President Scott Bernstein was seen on a high level panel with the CFO of Energy 21. This year the news has been very interesting. First, they drilled a successful well at Kenai Loop suggesting that they may have made the first major Alaskan natural gas discovery in the last ten years. They turned the corner on buying a major Jack-Up rig which effectively unlocks the value of their offshore reserves. They wrote a sales contract for all the gas they can produce, and they accomplished a major capital raise while their stock price continued to trend downward.
That is until yesterday. The stars seemed to align for BCC on the last two days of trading this week. The stock had better than usual volume and finished the week at 9.7 cents. Moving to 9.7 at the close is a break of three significant resistance points. Closing on a weekly high of 9.7 is above both the 50 day and 200 day moving averages. Significantly this broke the intermediate term downtrend that began in Mid-February.
What does this mean? Well, I think it means that all the hard work and positive moves that management have made over the last year have finally been recognized. How far will BCC run, hard to tell. If you read the Helmsec report they should be trading between 20 cents and 30 cents. A recent report from Shaw gives a 36 cent price target.
Does this recent activity signal a change in direction for this little gem, I certainly think so. Time to top up and get ready for the run.