Triangle Petroleum (TPLM)

[dan_s]

Triangle Petroleum (TPLM): An updated Net Income & Cash Flow Forecast model has been posted under the Watch List Tab.

I have increased my Fair Value Estimate to $13.40 (compared to First Call's Price Target of $11.46).

IMHO today's selloff is a classic example of how most of Wall Street looks at the wrong numbers when valuing an E&P company. EPS for the quarter came in under Wall Street's estimates, so what! This business is all about increasing production and proven reserves at low F&D costs. TPLM is doing a GREAT job.

Proven reserves have doubled since 1-31-2013. Year-over-year production growth is on-track to be 300% this fiscal year.

BTW, when you look at my forecast for FYE 1-31-2015 note that it may end up being VERY CONSERVATIVE. The company has not yet issued production guidance for next fiscal year. Actual production may be much higher than what I am using in the model as recent well results have been very strong.

Look at the revenue growth on row 12. It is STUNNING!

[ghrcap]

I suspect there are some wishful chart watchers who think they ought to be able to buy this around the $9 support. I'll have my net out well before then, I thought $9.80 today was a gift.

I see MIND traded down a bit A/H. What were you expecting from them on the quarter, Dan?

[ghrcap]

I suspect there are some wishful chart watchers who think they ought to be able to buy this around the $9 support. I'll have my net out well before that as I thought $9.80 today was a gift.

I see MIND traded down a bit A/H. What were you expecting from them on the quarter, Dan?

[dan_s]

Let me know what you think of my profile on TPLM. It looks like a Screaming Buy to me under $10/share. Their CC was extremely bullish, at least to me.

[par_putt]

will the winter season affect the share price short term?

[dan_s]

TPLM has very little gas production, so higher Ngas not impacting them much. Take a look at the bottom of the forecast model (last page of profile) to see how their production is split between oil, gas and ngls.

If you mean the cold weather in ND: It may slow down some completions but the service companies up there are used to working in the cold. It is the very wet and muddy spring weather that really slows things down in April & May. It is actually easier to move equipment around when the ground is rock hard in the winter.

The real value of any E&P company is not what they have produced but what they still have left to produce. I think TPLM is going to have a VERY IMPRESSIVE year-end reserve report that will show a big jump in their proven reserves year-over-year. That is what I think will drive the share price a lot higher.

Note in the forecast model that I am assuming they produce 10,000 boepd in 2014. At the rate they have grown the production the last two quarters, they could produce closer to 12,000 boepd in 2014. I think they will exit 2013 at close to 8,500 boepd.

[setliff]

tplm is trying to penetrate support at 9.4 to 9ish. if it does i see no other until 8ish.

[dan_s]

Cut from the Motley Fool article with my take in [ ] - Dan

What: Shares of energy explorer Triangle Petroleum Corporation (NYSEMKT: TPLM ) fell as much as 10% in trading today after the company reported earnings.

So what: Revenues jumped 315.7% to $88.6 million, easily topping estimates of $72.0 million. The problem is that earnings of $0.18 per share fell six cents short of estimates and considering the revenue beat it means that margins are far lower than expected. [If you listen to the conference call you will discover that gross margins on their pressure pumping business declined sharply from Q2 because they added several new crews and equipment. On time start-up costs were expensed causing the margin shrink. They expect profit margins to grow in the future. EPS also are net of DD&A calculated on older proven reserve estimates. Proven reserves should be increased sharply at year-end, thus lowering future DD&A expense. - Dan]

Now what: Triangle Petroleum is in a major expansion mode so I would be less worried about short-term profits and focus on revenue growth. That's why the 47% sequential improvement in revenue was so impressive. Given the revenue growth and swing to profitability I think the stock is a reasonable value and I definitely don't see the bottom line miss as a reason to jump ship today. [300% production growth and the significant increase in proven reserves that is just ahead is why I highly recommend buying TPLM now. - Dan]

[Laurin_DE]

I'm usually not a strong believer in chart reading... but from a chartist's point of view, where could be the bottom for Triangle?

Is there a good reason why to prefer OAS, SM, WLL, or KOG over TPLM at their respective current share price?

Thanks. - Laurin

[setliff]

there is good support at 7.90 and strong support between 7 and 7.50. next level down is 6.35

[dan_s]

OAS, KOG and TLPM are all pure plays on the Williston Basin (Bakken / Three Forks). SM and WLL have much more going for them. SM is primarily an Eagle Ford company.

[dan_s]

Plus, SM has a lot more natural gas production than all the others. Right now, SM is one of my Top Picks in our Sweet 16.

FWIW: At yesterday's luncheon in Houston, SXE mentioned that SM and ROSE are drilling some very good wells in the Eagle Ford which Southcross expects will be tied into their system.