August 15 & 16: VRO

[dan_s]

Vero Energy (VRO.TO) is coming down from Calgary to host luncheons for us in both Houston (August 15) and Dallas (August 16).

Vero's IR Firm is the same one that handles TransGlobe Energy (TGA), so I want large crowds at our luncheons. TGA has indicated they will host luncheons for us later this year.

I haven't spent much time on Vero but my "back of the envelop" valuation is over $8/share. Matt Denegre, our SMU intern, has been assigned the task of drafting a company profile and he will start on it next week. We should have the profile to all EPG members by the end of July.

Don't wait on us. Start your dd on this one by checking out the most recent corporate presentation, which you can find on the company's website: http://www.veroenergy.ca/

[dan_s]

I just started working on the company profile and forecast for Vero Energy but I'm very encouraged by what I see. Take a look at their most recent presentation and you will see why:

http://www.veroenergy.ca/Docs/June-Corp ... -Final.pdf

[dan_s]

One analyst's opinion:

Strong Q1/11 financial results, with accelerated growth on track for Q2

VRO announced its Q1/11 operating and financial results. Average
production for the quarter was 8,489 boe/d, and was slightly below our forecast of
8,792 boe/d (40.1 mmcf/d and 2,108 b/d) due to the timing of production additions in
the quarter. This represented modest growth of 1.8% over Q4/10 but this is just a
precursor of even stronger growth in Q2/11, as current production is in excess of
11,000 boe/d and the company is targeting average production of 10,700 – 11,200
boe/d for the 2nd quarter.

The company also reported strong financial results, with CFPS of
$0.34 ahead of our forecast of $0.29. The company’s total debt levels did increase
to $151.8 million as a result of an active Q1/11 drilling program, but as a reminder
the company’s credit facilities were increased to $170 million from $140 million
subsequent to quarter-end.

Strong drilling results support good 2011 production growth forecasts
VRO previously disclosed positive Q1/11 drilling results, which included 91%
success on 11 (9.2 net) wells. The program included five Cardium light oil wells, four
Notikewin wells and one Viking well, and we note that higher impact drilling success
on its liquids-rich Deep Basin gas assets positioned the company to accelerate
growth heading into Q2/11.

His target price is $10.25

[ghrcap]

I can never understand why a company fails to put its Canadian stock symbol and the symbol for US investors on the first page of its presentation. Does anyone happen to know the symbol for pink sheet trading in the US?

[par_putt]

VREYF

CALGARY, June 13, 2011 /CNW/ - VERO ENERGY INC. (VREYF:$5.9358,$0.0000,0.00%) will be presenting at the Canadian Association of Petroleum Producers (CAPP) Oil & Gas Investment Symposium, which is taking place June 13 - 15, 2011 in Calgary, Alberta.

[setliff]

yeah, if they made it more widely know it might help trading vol here---a little over a 1000 shs/day makes it a dangerous buy otc.

none traded yet today.

jim

[dan_s]

Average daily volume on the TSX is just under 200,000 shares.

I plan to issue a company profile on Vero Energy by August 12, after I get a chance to look over 2nd quarter results.