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11/26/14

PRD Energy (PRD.v) update, 3q14 financial results edition

Hands up all those who remember the way in which Marin Katusa of Casey Research pumped PRD Energy (PRD.v) to his bleating flock as "The next Bakken" and the way that other blowhard John Mauldin told people to get on, it was $1.10 or $1.20 at the time.

You got your hand up? Oh good me too, so let's check in on PRD.v's financial results for 3q14, posted last night. Let's begin with production and the way PRD.v's only well produced oil at the rip-roaring rate of 33.6 barrels per day in 3q14 (no, that's not "thousand" or hundred", that's thirty-three point six barrels per day). 


Tell me Marin, is that good or bad?

And let's not forget, that oil is in a JV with Suez so PRD.v only gets its share of that production. I get the feeling this one isn't performing the way Casey Research confidently predicted. As for the balance sheet, thanks to the cash raised in early 2014 PRD.v has just over $20m in the treasury and a working cap of $18.592m as at September 30th.


That cash raised added to the share count of course, PRD.v now has 143.908m shares out.


According to the 3q14 MD&A, the next thing PRD wants to do is...
"The Company plans to drill two to three deviated wells from the Boerger 7A well site in the second quarter of 2015, as the next stage of development for the Boerger pool..."
...which says there's going to be nothing doing for the next two quarters minimum. Then afterwards PRD wants to try again on a failed well...hey, what could possibly go wrong?

In other words, its assets aren't worth squat and the cash it has left values the company at around 12c or 13c per share. That residual value is a mile below its current 32c share price, so those of you who have hung on Katusa's words until now in the hope that it'll turn around have more pain coming your way.



Think of it this way; Darwin was right, you believed a Casey Research bullshit hype and evolution is what happens to the non-fittest, physically or mentally.