Manitok Energy Inc.

Manitok Energy Inc. is a public oil and gas exploration and development company focused on conventional oil and gas reservoirs in the Canadian foothills and southeast Alberta. The corporation will utilize its experience and expertise to develop the untapped conventional oil and liquids-rich natural gas pools in both the foothills and southeast Alberta areas of the Western Canadian Sedimentary Basin.

Expert Comments:

"We are enamored with Manitok Energy Inc. The company's share price suffered because it satiated the market with shares after doing a reasonably large-size issue at $0.80/share. That enabled the company to make a big acquisition that will leave it with up to 300 drilling locations with IRRs in excess of 50% at today's oil prices in both its Basal Quartz and Lithic Glauc zones. . .Manitok is a smaller company; it's trading at CA$0.60/share on about 85 million (85M) shares. It is an under-CA$50M company with just shy of CA$70M of debt, so its enterprise value (EV) is about CA$120M. Yet it's trading at less than 4x EV:EBITDA at today's oil price, and at about 2x EV:EBITDA assuming $65/bbl oil—about the global average cost of production—with years of growth ahead. . .we added more Manitok with the new issue." read more >

Daniel Choi, Clarus Securities (6/18/15)
"The closing of the financing and Wayne acquisition should allow Manitok Energy Inc. management to focus on developing its considerable land base in the Greater Entice areal. . .the asset base is compelling. . .the acquisition added a significant number of drill locations and the company estimates that it now has an inventory of 159 lithic glauconitic (LG) and 137 basal quartz (BQ) wells. . .of which 80 are within an 11km radius of the Wayne facility and could be tied in relatively quickly."

Chad Ellison, Dundee Capital Markets (6/17/15)
"Manitok Energy Inc. announced the closing of its second and final tranche of its previously announced equity financing. . .proceeds, in conjunction with a CA$20M infrastructure sale and a CA$31.5M royalty deal, with fund the CA$61.5M acquisition of the Wayne assets, which closed late last week. . .we continue to believe the greater size, increased well control, lower-risk drilling and infrastructure ownership of the Wayne property makes Manitok a lower-risk company going forward; even with the share dilution, it is still accretive to our estimates prior to the deal being announced and leaves the company with a better balance sheet position."

Chad Ellison, Dundee Capital Markets (6/8/15)
"Manitok Energy Inc. announced up to a $25M private placement equity financing, with proceeds being used to fund its previously announced Wayne acquisition. . .per our previous note, the acquisition is located just east of Entice, adds key infrastructure, 1,800 boe/d of production and low risk drilling with significantly greater well control and horizontal development in the area. The deal is now expected to close June 12."

Brian Bagnell, Macquarie Capital Markets (6/2/15)
"Manitok Energy Inc.'s Q1/15 production of 4.5 Mboe/d was directly in line with our estimate. . .the company agreed to acquire the rights to ~180 sections of land at Entice/Wayne from PrairieSky Royalty Ltd. . .and will also acquire ~1,800 boe/d of production (66% liquids) and a 25 Mbbl/d fluid processing facility in the Wayne area for cash consideration of ~CA$61.5M before transaction/closing costs. . .Manitok current trades at ~4.5x our 2016E FFOPS, at the very low end of its Canadian small/mid cap peers at 7.7x. We reiterate our Outperform rating."

Chad Ellison, Dundee Capital Markets (6/2/15)
"Manitok Energy Inc.'s strong hedge book insulated it from commodity weakness, recording a $5.5M realized gain in the quarter. We forecast similar hedge gains for the balance of the year, subsequent to quarter-end, management-added additional hedges for 2015–2017. . .we are expecting a number of operational catalysts over the summer, including expansion of liquids-handling infrastructure to allow the wells to produce to full capacity, longer production history and further delineation. The nearby Wayne acquisition has given further scale to the Plains division, with much greater well control and lower risk drilling. . .we believe Manitok's risk profile is beginning to shrink, we expect the valuation gap to follow suit."

More Expert Comments

Experts Following This Company

Randall Abramson, Fund Manager – Trapeze Asset Management
Brian Bagnell – Macquarie Capital Markets
Daniel Choi – Clarus Securities
Chad Ellison, Analysts – Dundee Capital Markets

The information provided above is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.