Five Companies to Consider in These Volatile Times

Source: Streetwise Reports 12/13/2018 Despite turbulence in the markets, investors should not be pessimistic because there are plenty of good markets to allocate to, posits Samuel Pelaez, chief investment officer and portfolio manager with Galileo Global Equity Advisors, who discusses trends in the markets and companies he believes are at attractive entry points right now. Streetwise Reports: Oil has been declining over the last two months or so. Would you talk about some of the factors behind this decline? Sam Pelaez: We can split the most interesting factors between, on one hand, the demand side, including the macroeconomy, the Purchasing Managers Indexes (PMIs) and the slowdown in emerging markets and in China. The other would be the supply side. I think it’s a convergence of those two concepts that’s caused some of this most recent weakness. On the demand side, the PMIs are one of the factors we like to look at the most because they give some predictability as to what may come next for resources. The PMI in China particularly has come down all the way to 50 points. The 50 line is the line between expansion and contraction. We are not in a contraction in any of the major economies, but we’ve lost that big tailwind and momentum that we had last year and earlier this year with PMIs in the high-50s. So, naturally, that has a very high correlation with demand for crude and we’re seeing that slowdown on that side. On the supply side, since … Continue reading

Mackie Analyst Sees Supercharged Revenue Growth for Energy Storage Firm

Source: Streetwise Reports 12/13/2018 Energy storage manufacturer opens up global distribution channels as long-standing partner Mercedes Benz Energy endorses product. This spring, Eguana Technologies Inc. (EGT:TSX.V; EGTYF:OTCQB), a small-cap Canadian firm that designs and manufactures grid interactive energy storage solutions based on its proprietary power control technology, received an product endorsement from long-standing partner Mercedes Benz Energy, which has since exited residential energy storage markets to focus on its core automotive battery segment. The company has turned this into a significant advantage. Mercedes had extensively tested Eguana’s technology prior to the endorsement and, upon exiting the marketplace, Eguana recruited and hired their top sales and marketing talent. The net affect was an immediate jump in sales, as well as getting the company positioned as one of three approved equipment providers in the lucrative, subsidized South Australia market. “We believe as quarterly revenue starts to approach and consistently exceed ~$2–3 million, the stock could rapidly rerate.” – Nikhil Thadani, Mackie Research With respect to Mercedes exiting the marketplace, Eguana CEO Justin Holland told Streetwise Reports, “the company received a public endorsement of our technology along with further credibility in the form of a full scale engineering report, access to Mercedes’ distribution channel, and the recruitment and hiring of its sales team in Europe.” Eguana also hired Mercedes Benz Energy’s director of business development for North America, Livio Filice, and within the first 100 days, Holland told Streetwise Reports, “the team brought in over $5 million in new and recurring orders. The … Continue reading

U.S. Pressure Pumping Company Lowers Q4/18 Revenue Guidance

Source: Streetwise Reports 12/13/2018 A Stifel report explains the reasons behind the guidance revision and shares its 2019 outlook for the oilfield services firm. In a Nov. 30 research note, analyst Stephen Gengaro reported Liberty Oilfield Services Inc. (LBRT:NYSE) lowered its Q4/18 guidance, and Stifel revised its Q4 numbers accordingly. However, he expressed optimism for next year, adding, “We continue to expect improvement in Q1/19. Our 2019–2020 estimates are unchanged.” Gengaro explained that two Liberty customers had chosen to take equipment offline sooner than expected. As a result, the company’s Q4/18 revenue will sequentially decline from previous guidance by about 10%, according to management estimates. That equates to about a mid-single-digit drop. In addition, due to customers delaying planned activity until Q1/19 for budgetary purposes, Liberty’s Q4/18 annualized EBITDA per fleet also is expected to sequentially decrease by about $5–6 million versus the previously guided $3 million. Liberty attributed the Q4/18 weakness to “transitory takeaway issues and year-end budget management concerns,” which Gengaro noted was consistent with Stifel’s expectations. To reflect changes to Liberty’s Q4/18 forecast, Stifel reduced its estimates for Q4/18 earnings per share to $0.33 from $0.43 and Q4/18 EBITDA to $86.3 million from $101.8 million, the analyst pointed out. The investment banking firm, however, left all of its current numbers for 2019 unchanged, given that it expects a “ramp-up in activity throughout the next year on higher budget resets and the resolution of Permian takeaway constraints,” noted Gengaro. Stifel also maintained its Buy rating and $25 per … Continue reading

U.S. Renewable Energy Solutions Provider Lands Two Contracts

Source: Streetwise Reports 12/13/2018 These new projects represent growing interest in the Philippines for the company’s offerings. UGE International Ltd. (UGE:TSX.V; UGEIF:OTC) announced in a news release it signed two financed contracts with packaging firm Philippine Aquapak Industries Inc. Together, the projects have an upfront value to UGE of about $300,000. UGE is to provide this company in the Philippines with a solution for 233 kilowatts of renewable energy at one of its production facilities and for 49.5 kilowatts at its headquarters. Construction is planned for 2019. According to the news release, these systems should result in a 50% energy cost savings over their lifetime to Philippine Aquapak. “2018 has seen our revenues grow exponentially in the Philippines,” Tyler Adkins, UGE’s regional director for the Philippines, said in the release. “Throughout the year we’ve introduced our ‘no cash-out’ financed product which has gained significant traction. We are looking forward to installing many financed systems in the country throughout 2019.” Read what other experts are saying about: UGE International Ltd. Sign up for our FREE newsletter at: Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are sponsors of Streetwise Reports: UGE International. Streetwise Reports does … Continue reading

Joint Venture's First STACK Well in the Osage Still Producing Strongly

Source: Streetwise Reports 12/11/2018 The well’s performance bodes well for the rest of the partners’ acreage in the play. Jericho Oil Corp. (JCO:TSX.V; JROOF:OTC) provided an update on its initial Oklahoma STACK Joint Venture well in the Osage Formation in a Dec. 3 news release. The Swordspear 15-23N-10W #1H has now been in production mode for 160 days, since installation of an electrical submersible pump that can accommodate high fluid volumes. During that time period, it yielded an average of 330 barrels per day of oil equivalent, consisting of 50% oil, the company stated. “The strength and, more importantly, the longevity of the Swordspear well’s production profile, has given the company great confidence in its northern STACK acreage position,” the release noted. Commenting on the near term, CEO Brian Williamson said in the release, “Our current well results, 2019 planned development, coupled with surrounding marque peer wells planned for Q4/18 and Q1/19 will provide a springboard of net asset value for our STACK JV.” Read what other experts are saying about: Jericho Oil Corp. Sign up for our FREE newsletter at: Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are sponsors of Streetwise Reports: … Continue reading

Lithium Company Expands Land Position in Carolina Tin Spodumene Belt

Source: Streetwise Reports 12/08/2018 The new acquisitions are in line with this firm’s strategy to consolidate the region. Piedmont Lithium Ltd. (PLLL:NASDAQ; PLL:ASX) increased its land package via acquisition at its Piedmont lithium project by 15% to 1,383 acres, it announced in a news release. The acquisitions were strategic, with 122 of the purchased acres being located in the Carolina Tin Spodumene Belt (TSB), where Piedmont’s Core property sits. The significant new parcels related to Core are contiguous, 55 acres in the southeast and 20 acres in the west. Together, they expanded Core’s acreage by 93 acres or 18% to 622 in all. Both of these recent acquisitions expanded highly prospective strike length at Core, the southeast acres adding more than 600 meters (600m) along the F corridor and the west acres adding more than 400m along the B corridor. “These two properties have significant potential to add to the current Core resource,” the release stated. “We have found high-grade mineralization in over 90% of the holes we’ve drilled on the TSB, and our expectation is that the larger our land position, the larger our ultimate resource and mine life will be,” President and CEO Keith Phillips stated in the release. Piedmont plans another drill program to explore these new properties, to upgrade Inferred resource ounces to Indicated, to change the exploration target areas to Indicated ounces where possible and to follow up previous drilling at Central. The company is currently finalizing targets for its phase four drilling. The new … Continue reading

Follow-up Thailand Appraisal Well 'Tests 659 Barrels Per Day'

Source: Streetwise Reports 12/06/2018 A Mackie Research Capital Corp. note reviewed the new result. In a Dec. 3, 2018, research note, Bill Newman, a Mackie Research Capital Corp. analyst, reported that Pan Orient Energy Corp.’s (POE:TSX.V) appraisal well L53-DD2 is now producing at about 659 barrels per day (659 bbl/d) of 23.9 degree API oil from the EE sands, “the lowest of the four pay zones.” On a net basis, this equals about 330 bbl/d of oil. The L53-DD2 well is located within Pan Orient’s L53 concession, and tested at this stabilized rate over a five-day period. It will be left to produce for the remainder of the 90-day test period. Newman highlighted that the rate of oil L53-DD2 is producing is roughly comparable to what the discovery well L53-DD1 in the DD sands tested at, which was about 780 bbl/day, or 391 bbl/d net. Therefore, combined production from L53-DD1 and L53-DD2 is about 1,759 bbl/d, or 879 bbl/d net. “We are very encouraged with the initial test results of both wells, which we expect to generate significant cash flow to fully fund a development and exploration program in Thailand in 2019,” Newman noted. That effort will constitute drilling of three wells: a second appraisal well, L53-DD3, on the L53-DD field in January; an appraisal well on the L53-B field; and an exploration well, L53AC-E, targeting the West A fault compartments in August. Newman summarized that within the DD field at the L53 concession, five oil-bearing sands have been encountered. … Continue reading

Alberta-Based Oil & Gas Firm Makes 'Right Choice' in Lowering Dividend

Source: Streetwise Reports 12/06/2018 A CIBC report notes the move increases this company’s financial flexibility. In a Nov. 29 research note, analyst Jamie Kubik reported that Bonterra Energy Corp. (BNE:TSX) will reduce its dividend by about 90% to CA$0.12 per share from CA$1.20 annually, beginning with the November dividend (payable in December). CIBC considers this change “prudent,” Kubik noted. “While the stock may not be immediately rewarded for this move, we see it as ultimately being the right choice considering the pressure on realized pricing and producer cash flows in the current environment,” he added. He pointed out that this dividend lowering will afford Bonterra improved financial flexibility to weather today’s environment and the chance to pay down debt as price levels increase, likely in H2/19. To reflect the new dividend figure, CIBC revised its models on Bonterra. Specifically, Kubik explained, “given the differentials on light oil remain wide in H1/19, we have back end weighted our capital spending expectations for 2019 and moderated our capital efficiency assumptions, given we anticipate management will look to high-grade its capital program.” Consequent to the above, the bank reduced its price target on Neutral-rated Bonterra to CA$11 per share from CA$13. The energy company is trading today at around CA$7.11 per share. Sign up for our FREE newsletter at: Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies … Continue reading

Why This Oil Stock Will Be a Screaming Buy Between Now and the End of December

Source: Keith Schaefer for Streetwise Reports 12/04/2018 Keith Schaefer, publisher of Oil & Gas Investments Bulletin, profiles a small-cap oil and gas firm active in the Oklahoma STACK that he believes stands out from the pack. Oil stocks will be a screaming buy sometime between now and Dec. 31. Tax loss selling pressure will add to the pressure of lower oil prices, and some crescendo of selling will hit in the coming weeks, if not days. So where do I look to buy into this fear? I’ll tell you why I’m looking at Jericho Oil Corp. (JCO:TSX.V; JROOF:OTC) They’ve hit on a couple monster wells in the last quarter, validating all their acreage. They’re in Oklahoma, which enjoys some of the best oil prices in North America. And Encana’s $5.5 billion buyout of Newfield tells me the industry loves this play. All these producers will have a reflex bounce up come January—just from the mindless selling pressure of tax loss time ending. There is a “gimme” of 20-30% coming in early January. But I think you have to be analytical to figure out where The Big Winners will be. Pricing power has actually become A Big Deal for oil producers. Oklahoma is getting GREAT pricing, just $1.50/b off WTI. The Big Oil Plays in North America are suffering from severe price discounts. Permian producers got scorched early this year as the amount of oil being produced overwhelmed infrastructure and West Texas oil prices tumbled to first $8, then $12 and … Continue reading

Cypress Development Cashed Up, Metallurgical Studies Underway and PFS Expected in Q1/19

Source: The Critical Investor for Streetwise Reports 12/01/2018 The Critical Investor discusses recent developments at the company’s Clayton Valley Lithium project in Nevada. Drilling at Clayton Valley Lithium project, Nevada 1. Introduction After closing an oversubscribed private placement of C$2.01M @C$0.22, Cypress Development Corp. (CYP:TSX.V; CYDVF:OTCQB; C1Z1:FSE) is sufficiently cashed up to proceed towards a Prefeasibility Study (PFS) on its Clayton Valley Lithium project in Nevada, which is scheduled for Q1 2019. The company is also working diligently at subjects like metallurgical test work and water supplies, which are needed to enable eventual production in the future. For this purpose, Cypress recently completed an agreement with Dajin Resources (DJI.V) for a JV on Dajin’s nearby Alkali Spring Valley Lithium property. This project has the potential to obtain sufficient water rights. Besides water, metallurgy is a critical component of the Cypress Development story. For this I will also quickly rehash some points from the recently published and filed Preliminary Assessment (PEA), showing excellent economics, in order to provide sufficient context. All presented tables are my own material, unless stated otherwise. All pictures are company material, unless stated otherwise. All currencies are in US Dollars, unless stated otherwise. 2. Update First, let’s have a quick update on what happened since my last article on the PEA on the Clayton Valley project. The most important thing for now was the oversubscribed private placement, which was non-brokered and was closed on October 29, 2018. I always prefer this as it isn’t a case of … Continue reading