Stock Picks: Midway Energy (TSE:MEL)

MEL is a junior oil and gas company engaged in the exploration for, and development and production of, oil and natural gas in Western Canada, primarily in the provinces of Alberta and British Columbia.

Quick Facts (Q3 2010):

Average Production: 2,209 boe/d, 55% oil + ngl

O/S: 75.25 MM FD

Land: 116k net undeveloped

Q3 Highlights

Q3 average production:?? +15% Q-Q.

2010 production guidance:?? 3,000 boe/d exit rate with 65% oil+ngl weighting, September exit production was 2,600 boe/d.

Outlook (November 16, 2010)

By having the majority of its production coming out of the Garrington area, Midway has been able to reduce its operating costs every quarter. They have succeeded in lowering their natural gas weighting and seem to be on track for hitting a 65%+ oil weighting by the end of the year.

Heres a quick summary:

  1. MEL currently holds at least 40 sections of Cardium prospective land (Garrington area) which makes them a prime takeover target if consolidation continues in that area.
  2. Established current inventory of over 150 net Cardium drilling locations.
  3. Entered into a rolling option farm-in agreement on 10 net sections of Cardium rights immediately offsetting Midways lands (adds 40 drilling locations).
  4. Established a foothold in the Swan Hills emerging tight oil play. MEL has access to 9 net sections of land with 28 potential drilling locations. 1st well licensed in November.

In Summary, Oil is the name of the game and Albertas Cardium formation is the industrys hot spot. With prices hovering above 80$ per barrel, I think??the fundamentals are there for a good return on investment! As MEL executes, I expect the share price to reflect their success.


I was not paid any fees to feature this stock. I am just sharing my research. Please do your own due diligence before buying or selling any security.