Sweet 16 Update

[dan_s]

We are now exactly half way through 2011.

The Sweet 16 is up 9.91% YTD and 89.14% in the last 18 months.
The S&P 500 is up 7.70% YTD and 20.14% in the last 18 months.

YTD changes in share price
MIND up 55.09%
FXEN up 47.48%
GPOR up 39.76%
PTEN up 24.49% since it was added to the S-16 on Feb. 9
CRZO up 21.83%
BEXP up 12.44%
CLR up 12.03%
ROSE up 11.52% since it was added to the S-16 on Apr. 6
DNR up 5.03%
GEOI up 4.28%
PXP up 2.81% since it was added to the S-16 on Apr. 6
XEC up 2.53%
PMGLF down 12.57%
GTE down 14.36% since it was added to the S-16 on Apr. 6
TGA down 14.93% since it was added back to the S-16 on May 25
PBEGF down 40.61%

Petrominerales (PBGLF) and Gran Tierra (GTE) were doing great until the elections in Peru frightened off investors. Neither company has production in Peru. Both companies are doing just fine and they will report strong 2nd quarter results. Both companies have incredible exploration upside.

TransGlobe (TGA) is down due to the unrest in Egypt and Yemen. Things are settling down in Egypt and TGA has report strong production growth. They are on-track to exit 2011 with over 20,000 bopd of production and very significant reserve additions. TGA is a pure play on Middle East oil and it sells all of its oil on contracts tied to Brent. Very little of its production is hedged.

PetroBank (PBEGF) has entered a very important period. Their first heavy oil project has gone commercial. They need to show the world that their THAI process actually works. PetroBank also owns 59% of PetroBakken. PetroBakken will report a decline in production for the 2nd quarter (to 39,000 boepd) due to weather related delays in getting wells completed. They should catch up in Q3 and they should exit the year at around 47,000 boepd. Both companies are sitting on a lot of oil.

As I posted the other day: PetroBakken (PBN.TO) pays monthly dividends and now has a more than a 7% yield. My forecast model shows strong cash flows, more than enough to cover the dividends. It can be found under the Sweet 16 tab, just click on the PetroBank logo.

As a group the Sweet 16 is trading at over a 50% discount to my combined Fair Value estimate. CRZO is the only company even within single digits of my Fair Value estimate.

An updated Sweet 16 spreadsheet showing my current Fair Value estimate for each company and the current First Call price target for each company.

The Sweet 16 remains heavily weighted to oil (as should all of you). FXEN is the only pure play on gas and all of its assets are in Poland.