Our Canadian Juniors have HUGE upside for us - June 9
Posted: Wed Jun 09, 2021 11:47 am
Things are looking up in Canada. I have two Canadian Junior Upstream Companies in our Small-Cap Growth Portfolio that have a good shot at being triples for us if WTI oil stays over $65/share. My valuations below are based on assumptions that now look very conservative.
Hemisphere Energy (HMENF) is currently trading at $0.50US, which compares to my valuation of $1.35US.
InPlay Oil (IPOOF) is currently trading at $0.68US, which compares to my valuation of $1.40US.
I consider Hemisphere to be the safer of the two because they are on-track to be debt free within a year. Hemisphere has started work on converting one of their waterfloods at Atlee Buffalo to a polymer flood. If the Company gets the results that they are expecting, my valuation will go over $2.00US. Don Simmons should be able to give us an update on the polymer flood when they release Q2 results in August. Hemisphere's Q1 production of 1,653 BOE per day (99% oil) should ramp up to 2,200 by year-end and increase to 4,000 BOPD by the end of 2022 if the polymer flood works.
InPlay has more current production (over 5,000 BOE per day), but it has more debt to deal with. InPlay has HUGE UPSIDE in the Duvernay Shale Play in Alberta. If oil stays over $70Cdn/bbl, InPlay's leasehold position in the Duvernay could have a market value of twice the company's current market cap.
You can find profiles on both companies under the Small-Cap tab on the EPG website.
Hemisphere Energy (HMENF) is currently trading at $0.50US, which compares to my valuation of $1.35US.
InPlay Oil (IPOOF) is currently trading at $0.68US, which compares to my valuation of $1.40US.
I consider Hemisphere to be the safer of the two because they are on-track to be debt free within a year. Hemisphere has started work on converting one of their waterfloods at Atlee Buffalo to a polymer flood. If the Company gets the results that they are expecting, my valuation will go over $2.00US. Don Simmons should be able to give us an update on the polymer flood when they release Q2 results in August. Hemisphere's Q1 production of 1,653 BOE per day (99% oil) should ramp up to 2,200 by year-end and increase to 4,000 BOPD by the end of 2022 if the polymer flood works.
InPlay has more current production (over 5,000 BOE per day), but it has more debt to deal with. InPlay has HUGE UPSIDE in the Duvernay Shale Play in Alberta. If oil stays over $70Cdn/bbl, InPlay's leasehold position in the Duvernay could have a market value of twice the company's current market cap.
You can find profiles on both companies under the Small-Cap tab on the EPG website.