January 20, 2019

PetroBakken Energy Ltd (PBN)

 

 

PetroBakken Energy Ltd (PBN) is a Canadian energy entity that consists of three chief subsidiaries.  The first subsidiary is PetroBakken (the fully Canadian Business unit) of which they own a 59% stake.  The broader entity also owns 100% of Whitesands Insitu Partnership and Archon Technologies Ltd.  PetroBakken Energy (PBN) is a leading producer of light oil properties in Western Canada.  Their Archon Industries branch has patented a new oil extraction technology known as THAI®.  Not only does PetroBakken make money off of this company, they are able to market the proprietary technology worldwide.  The company ended 2012 with a production rate of about 55,000 boe/pd, which is slightly more than it expects to produce next year.  They hedged roughly about a quarter of total production.

 

Going into the new year PetroBakken (PBN) has a capital expenses budget of $700 million for next year.  The main focus of this money will be to increase the efficiency and production of the 185 or so wells that the company has currently developed in the Bakken and Cardium light oil properties.  Capital expenditures have a $34 million dollar budget, and will be focused on the Kerrobert project, and the Dawson project.

 

The company seen its balance sheet tighten up this year, and the CEO, John Wright, has had his proverbial hands full in trying to come up with creative ideas to keep the company profitable.  Options have included cutting the dividend and/or selling certain assets.  Share subsequently fell over 70% this year.  Wright has also publically floated new ideas about issuing new stock and/or re-negotiating $750 million worth of bonds that are currently on the market.  The basement-level prices of natural gas have certainly not helped the company’s fortunes in 2011.

There is certainly the possibility going forward that PetroBakken (PBN) will sell some of its assets, but a greater likelihood in my estimation is that they will be acquired fully by of the other major energy players in the Canadian Energy sector.  They do own several key properties in the Bakken and Cardium regions, and their proprietary technology is a unique part of the package as well.  Mr. Wright has stated in a letter that, “any or all” of PetroBakken’s assets are on the block right now in terms of creating solutions to achieve profitability for the company.  He has went on to publically note that there are, “A number of conventional drilling opportunities which don’t meet our hurdle rates.”  Two industry reports have speculated as to possible buyout options on the table, but so far

Shares of the stock recent closed at $13.02.  PetroBakken (PBN) is a large company with a market capitalization of 2,438 million.  The current dividend figure of $0.96 gives shareholders a yield of 7.4%, but this does not appear to be stable given the current circumstances.  There may be a short-term play available here if merger talks heat up and the stock rises based on speculation.  I believe that there are better, more stable, and less debt-laden companies available on the Canadian energy market.

 

PetroBakken Energy Ltd (PBN) Technical Analysis:

PBN Trend Analysis

PBN is on a uptrend, click here to get PBN free trend analysis report.

 

PetroBakken Energy Ltd (PBN) Stock Graph:

TSE PBN

PetroBakken Energy Ltd (PBN) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
PBNPetroBakken Energy Ltd16.265.9369.290.3903935N/A71.42856