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Shoal Point Energy Ltd. is a petroleum exploration and development company
Message: Strong Buy SHP
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Strong Buy SHP
Good Afternoon,
We should learn flow rates from well #1 any day now, very likely by the end of next week at latest. I'm feeling very good about these numbers being STRONG! If we see 150 barrels per day or higher, the stock is heading toward 40-50 cents. 150 bbls isn't all that much on its own, but investors know this will be duplicated and scaled to 5 or more of these wells this year.
At that point we're looking at $5-6-7M in annual cash flows. At a 20 PE (very modest in the oil/gas E&P universe), we're looking at a $100m plus (US) market cap. This could take SHP to the $1.50-$2 area based on earnings at that point and it won't take very long to start plugging new holes. In fact, I think the first half of March will see the next well begun.
The chart looks great and I don't see most of us selling a bunch of stock anytime soon, knowing we have a tiger by the tail. And what if Newfoundland opens back up!?! That asset is HUGE! It's insane how big that play is if the government shifts from left toward the right and allows drilling. It will happen, it's just a question of when. I'm hearing some progress has been made recently so let's see.
Lastly, this area around Mount Evans could end up being prolific in Helium production. It's not out of the question that SHP gets involved, which I think would add serious sizzle to this already exciting growth story. Watch for a breakout of .32, which would start the next leg to .40 plus.
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Sincerely,
Eric Muschinski
Black Gold Letter
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