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Rock Energy Inc.

Rock Energy Inc. is a growth-oriented western Canadian energy producer that is focused on building a portfolio of oil and natural gas producing assets with predictable, sustainable cash flow. The company's current assets are located along the Alberta-Saskatchewan border near the towns of Kindersley and Kerrobert. During Q1/14, Rock produced an average of 4,899 boe/d.

Expert Comments:

Thomas Matthews, Alta Corp Capital (2/25/15)
"Rock Energy Inc. announced closing of its $13.2M bought-deal financing. . .during a period when commodity prices were falling precipitously and no bottom was in sight, we believe Rock was prudent in executing the financing to ensure it could complete its Q1/15 capital budget at a range of commodity prices without fully utilizing its credit facility. Activating the royalty holiday ensures Rock will generate the free cash flow necessary to improve its balance sheet. . .during periods of weak commodity prices, while positioning itself with dry powder to inject capital back into its Viking growth program (or make a small tuck-in acquisition on one of its exploratory ideas) when prices improve. We maintain our Outperform rating."

Chad Ellison, ZZ-OLD Dundee Capital Markets (2/25/15)
"We continue to favor Rock Energy Inc. given its low declines, materially improving cost structure driven by reduced royalties beginning in Q2/15, clean balance sheet and significant torque to oil prices."

Stockwatch (2/4/15)
"Rock Energy Inc. announced a $10M bought-deal offering of 4.26M shares at $2.35/share, with insiders expected to buy 10%. This morning it boosted the offering to 5.6M shares. . .meanwhile, Rock has reaffirmed its 2015 budget, which was lowered to $25M from $90M on Jan. 25. It has no drill rigs operating, so much of the money is going toward its Mantario EOR (enhanced oil recovery) project. Once operational in March, this project will lower Rock's royalties in the area to 1% from as much as 30%, thanks to Saskatchewan's EOR incentive program."

Darrell Bishop, Haywood Securities (2/4/15)
"Rock Energy Inc. has announced it has entered into a bought deal for gross proceeds of $10M. . .proceeds will be used to pay down debt and help fund the company's previously announced 2015 capital budget of $25M. . .we maintain a Buy rating and target of $4.50."

Nav Malik, Octagon Capital Corporation (1/28/15)
"Rock Energy Inc.'s production averaged 5,350 boepd (97% oil) in Q4/14, 13% higher than Q3/14 production and in line with our estimate. . .production at Mantario averaged 3,500 boepd, and Viking production at Onward was over 900 boepd. . .we are maintaining our Buy recommendation."

Thomas Matthews, Alta Corp Capital (1/27/15)
"Rock Energy Inc. announced an operations update and revised its 2015 guidance. . .since the initial budget announcement, the forward crude complex has deteriorated by nearly 40%. As such, to protect its balance sheet, the company has reduced its 2015 budget to $25M with $1718M to be spent in H1/15 in order to complete the water/polymer enhanced oil recovery scheme and activate the 1% royalty holiday. . .Rock has taken the prudent approach of cutting development capital during a period of uneconomic oil prices. . .we believe its willingness to defer its highest productivity locations will pay off for investors."

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Investing Highlights
 
Strong Balance Sheet
 
Low base production decline rate
 
Generating cash flow per sale of $1.25 at WTI $60 US/bbl
catalyst Calendar
Rock Energy Inc. Content