Rubellite Energy Update - June 6

[dan_s]

I finished my review of the updated profile on Rubellite Energy (RBY.TO and RUBLF) late yesterday. It has been posted to the EPG website along with my updated forecast/valuation model. Rubellite is one of the most aggressive growth companies in our Small-Cap Growth Portfolio.

All 9 of the companies in our Small-Cap Growth Portfolio reported solid Q1 results and they are doing well despite the recent dip in oil prices. Rising natural gas prices will continue to offset much of the financial impact of lower oil prices for most of them. When the political "noise" declines, which it will eventually, I do expect oil prices to drift higher.

Rubellite is a Canadian Junior with current production of approximately 12,300 Boepd, 70% heavy crude oil and high-value NGLs. It has a solid balance sheet and lots of high-quality "Running Room" is Alberta. This year's drilling program that should generate ~10% organic production growth is being funded entirely by operating cash flow.

The current share price is less than 1.4 X my Adjusted Operating Cash Flow per share forecast for 2025 of $1.26Cdn. In my opinion, a valuation multiple of 4X CFPS is an appropriate measure of Rubellite's fair value.

My current valuation of RBY.TO is $5.60Cdn, which translates to about $3.92US for RUBLF.

Based on the Company’s December 31, 2024 reserve report, the PV10 Net Asset Value based on
proved plus probable reserves is $6.47Cdn per share. < See March 10, 2025 Press Release