My updated company profile for Vero Energy is now available under the Watch List Tab.
It includes my Fair Value estimate of the company's common stock.
Vero Energy's CEO, Doug Bartole, will be the speaker at our luncheon in Houston on Friday, February 24. We will record his presentation and have it up on the website that afternoon.
Vero Energy recently closed the sale of most of its natural gas assets. This is a major shift in strategy for the company. It is now a pure play on the Cardium Light Oil play in Alberta. You should all read our profile carefully.
On February 13th RBC Capital Markets issued a research report on Vero Energy. Their price target is $4.00/share.
You can see the RBC report at the link below. Just copy and paste it into your browser: https://www.rbcinsight.com/INSIGHT2/Sha ... e%3a%c6%1e
Proceeds from the asset sale paid of all of Vero's debt and they plan to pay a special dividend to common stock holders.
CALGARY, Feb. 13, 2012 /CNW/ - Vero Energy Inc. (TSX:VRO.TO - News) ("Vero" or the "Company") announces that it has mailed its Information Circular and Proxy Statement (the "Information Circular") in respect of its special meeting of holders ("Shareholders") of common shares ("Common Shares") of the Corporation scheduled to be held on March 7, 2012 (the "Meeting").
As previously announced, Shareholders will be asked at the Meeting to vote upon a special resolution to approve the proposed one-time cash distribution to Shareholders of $0.30 per Common Share (the "Cash Distribution"). If approved at the Meeting, subject to confirmation by the Board of Directors of Vero promptly following the Meeting, the record date for determining Shareholders which will be entitled to the Cash Distribution is expected to be March 20, 2012 and the Cash Distribution is anticipated to be paid on or about March 27, 2012. Assuming a March 20, 2012 record date, the Common Shares would be expected to commence trading on an "ex-distribution" basis on March 16, 2012.
Vero Energy (VRO.TO)
Vero Energy (VRO.TO)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Vero Energy (VRO.TO)
RBC Capital Markets report on Canadian Intermediate E&P Companies dated February 13, 2012
See comments about Vero Energy below.
Investment Themes
• Facing a challenging environment. The economic uncertainty prevalent through much of
2011, combined with continued pressure on natural gas prices, has created a challenging
environment for many junior and intermediate oil and gas producers in Canada. While the
start to 2012 appears to be following much the same path, we believe value investment
opportunities exist within the sector.
• Holding black gold. Oil weighted stocks represent the best vehicles for investment, in our
view. In our coverage universe Arcan Resources (Outperform) has the greatest exposure to
oil, boasting a production profile that is 94% light oil, and an exploration program focused
almost entirely on the Swan Hills light oil play. Vero Energy (Outperform) and Second
Wave Petroleum (Sector Perform) are both heavily weighted to light oil.
• Looking for growth. In addition to companies with already high levels of oil production,
we look to E&Ps with significant exposure to an oil resource as attractive investment
vehicles. Chinook Energy (Outperform), with its oil bearing properties in Tunisia, and
RMP Energy (Outperform), with its Waskahigan Montney light oil play, both have assets
to exploit to significantly increase oil production, and cash flow, in our view.
• Liquidity essential. With depressed gas prices weighing on cash flows and constrained
access to capital a reality, healthy balance sheets are crucial for companies to ‘weather the
storm’ and maintain active exploration programs. Delphi (Sector Perform), Vero and RMP
all boast forward D/CF multiples under 1.5x and retain significant room on their bank lines.
Perpetual (Underperform) appears in the most precarious financial position, in our view,
with a D/CF multiple near 10x.
• Valuation. The sector is currently trading at 8.3x EV/DACF (2012E) versus the 5-year
average of 6.8x, lending support to our view that a selective investment approach within the
sector is warranted. Of our names both Vero and Chinook screen favourably on valuation.
See comments about Vero Energy below.
Investment Themes
• Facing a challenging environment. The economic uncertainty prevalent through much of
2011, combined with continued pressure on natural gas prices, has created a challenging
environment for many junior and intermediate oil and gas producers in Canada. While the
start to 2012 appears to be following much the same path, we believe value investment
opportunities exist within the sector.
• Holding black gold. Oil weighted stocks represent the best vehicles for investment, in our
view. In our coverage universe Arcan Resources (Outperform) has the greatest exposure to
oil, boasting a production profile that is 94% light oil, and an exploration program focused
almost entirely on the Swan Hills light oil play. Vero Energy (Outperform) and Second
Wave Petroleum (Sector Perform) are both heavily weighted to light oil.
• Looking for growth. In addition to companies with already high levels of oil production,
we look to E&Ps with significant exposure to an oil resource as attractive investment
vehicles. Chinook Energy (Outperform), with its oil bearing properties in Tunisia, and
RMP Energy (Outperform), with its Waskahigan Montney light oil play, both have assets
to exploit to significantly increase oil production, and cash flow, in our view.
• Liquidity essential. With depressed gas prices weighing on cash flows and constrained
access to capital a reality, healthy balance sheets are crucial for companies to ‘weather the
storm’ and maintain active exploration programs. Delphi (Sector Perform), Vero and RMP
all boast forward D/CF multiples under 1.5x and retain significant room on their bank lines.
Perpetual (Underperform) appears in the most precarious financial position, in our view,
with a D/CF multiple near 10x.
• Valuation. The sector is currently trading at 8.3x EV/DACF (2012E) versus the 5-year
average of 6.8x, lending support to our view that a selective investment approach within the
sector is warranted. Of our names both Vero and Chinook screen favourably on valuation.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group