Q3 2010 Updates: Perpetual Energy, Daylight Energy, Delphi Energy

Following quarterly releases by companies I am invested in, I will be updating their respective pages with the latest data and upcoming catalysts since I use these posts in my investment decisions. The information found under these stock picks was retrieved from the latest quarterly reports. If you identify any errors in the data please do not hesitate to contact me.

Click on the links to view the latest highlights.

Daylight Energy (TSE:DAY) Daylight is actively working on becoming a more focused company with an oilier asset based. DAY will continue its aggressive light oil development activity in Pembina with at least 10 additional horizontal Cardium wells expected to be drilled during Q4 of 2010. 2 net Cardium wells drilled in Q3 will also be completed and placed on production. In addition to the Cardium light oil program, DAY is targeting the Bluesky and Wilrich (liquid rich) in West Central and the Cadomin in Elmworth (liquid rich) which highlights the depth and quality of its inventory of resource-play opportunities in light oil, NGLs and natural gas.

Perpetual Energy(TSE:PMT) the expected dividend cut was finally announced by PMT bringing it down from 0.05 to 0.03. PMT still yields ~8% at this point. I have not sold 1 single share since the whole debacle began, I knew I was invested in an aggressive play here, the company is heavily weighted to natural gas and prices have been wiping the floor lately.

On a side note Sprott Asset Management promoted Eric Nuttal to lead portfolio manager. Obviously, he must have made a bundle to his employer partially because many TV investors execute on his words, so he deserves his promotion, congratulations Eric!

I wish to keep PMT for its natural gas exposure and sell my other gassy companies. PMT is an aggressive play, if you do not have the patience or do not wish to bet on natural gas there’s no reason to hold it. Obviously, PMT is a bet on more than just natural gas given their game changers. PMT is targeting 15% liquids weighting by the end of 2011. Did PMT cut the dividend too late? Was the cut too little? Is there hope for natural gas?

I would not be surprised to see PMT trading at $3.50 soon. If that happens, I might pick up more since I believe in the fundamentals of this company. Until then, I am holding and waiting on winter to see if it will have any impact on NG prices at all.

Delphi Energy(TSE:DEE) reported a minor loss in its Q3 results. Having reduced operating costs and increased their capital budget they are looking to exit the year at 9000+ boe/d. Its production is 80% weighted to natural gas; as such its share price received a decent haircut this fall when natural gas prices fell. They are targeting liquid rich targets to make up for natural gas weakness and had an active Q3 drilling program with a 100% success rate.

Please do your own due diligences before you take any investment decisions related to these companies.

7 comments to Q3 2010 Updates: Perpetual Energy, Daylight Energy, Delphi Energy

  • [...] This post was mentioned on Twitter by Invest With Passion, Mich. Mich said: Q3 2010 Updates: Perpetual Energy, Daylight Energy, Delphi Energy http://t.co/32gnNGO via @BeatingTheIndex [...]

  • Solid update Mich. I continue to keep DAY on my watch list.

    Cheers,
    Mark

  • Yep, there was no conflict of interest there, right? Gotta watch out for those TV investors! I don’t buy it overall, though. Natural gas is among the least polluting fossil fuels, so why not use more of it and to our advantage? If prices remain low, this is where I would see things going.

  • Mich

    @FC, I like DAY and will like it more once their asset divestitures are closed. They will become leaner and more focused.

    @IIW, The problem with NG is too much supply. The question is when will we witness the turning point? If you can predict that, you can become rich :)

  • John

    What I dont quite understand is why, despite a gradual recovery of natural gas prices currently, does PMT still continue to trade so poorly following Eric Nuttal’s comments? Is the market is in a state of hesitance to reinvest in this company? Previously, PMT’s pricing would very roughly track NG price performance. Now, PMT manages to surprise every week by hitting lower and lower.

    With some analysts predicting NG to even hit 7-8 $/mcf this year I wonder how that will affect things.

  • Mich

    I wouldn’t hold my breath for 7-8$/mcf. I don’t have a clean answer for you as why the stock is being abused since Nuttal attracted all the sharks to PMT’s waters.

    Do you know why you’re invested in PMT? This is what matters the most. The fundamentals are still good in my opinion, NG is not given out for free and the company is not going bankrupt anytime soon as far as I know.

    I am investing in the game changers that will impact PMT’s balance sheet and currently ignoring the noise (sitting on hefty paper losses). Q1/11 will have loads to say about the prospects of this company, I will either bite the bullet or stay the course.

  • John

    Like many others, I invested in PMT at around roughly the $5 area. I figured that PMT was a safer choice (relative to leveraged ETFs) in investing into the NG market right before winter hits. I was quite surprised at how well PMT rode out the big hit in NG price during the big crash in September. The high dividend payout does help with providing a some piece of mind in tough times. So having the share price drop so dramatically in a matter of weeks is quite the surprise.

    Hopefully Q1/11 will have good results to bring to the table as a result of higher NG prices and a reduced dividend payout.

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