SPYGLASS RESOURCES CORP (SGL): The Bargain Hunters Should Check Out This Oil and Gas Producer

Here is more convincing information that can make you gravitate to the bullish side:

1) Spyglass is led by Tom Buchanan who has a track record of creating value. Apart from his recent short-lived career in Charger Energy, he founded Founders Energy in 1993 from an initial investment of $700,000. Founders Energy evolved into Provident Energy Trust and hit a peak rate of 35,000 boepd a couple of years ago. Provident’s upstream business was divested, and the remaining mid-stream business was acquired by Pembina Pipeline Corp. for $3.8 billion in 2012.

2) The new entity offers a balanced commodity profile to help mitigate the risk associated with any one commodity. The company estimates to exit 2013 at 18,000 boepd (52% oil and liquids) up from 17,340 boepd (49% oil and liquids) in Q1 2013.

3) SPYGLASS RESOURCES CORP (TSE:SGL) has Net Debt and Working Capital at $293 million and plans to dispose of certain non-core properties within the combined asset base to further enhance its financial flexibility and sustainability of the dividend model. Spyglass targets a decent ratio Net Debt to Exit Cash Flow (annualized) of 2.1x by year end.

4) The company has an active hedging program to protect against fluctuations in the prices of oil and gas. It has 32% of its estimated crude oil production hedged at an average floor price of $94.84/bbl and 41% of estimated gas production at an average floor price of $3.02/GJ.

5) SPYGLASS RESOURCES CORP (TSE:SGL) owns 645,000 net acres undeveloped land which can sustain more than 20 years of exploration and drilling development. The capital program will be primarily focused on low risk, light oil development opportunities intended to offset the company’s natural production declines and sustain the monthly cash dividend to shareholders. Most of the CapEx will be allocated to development drilling. By the end of 2013, the company plans to drill 18 to 20 net wells focused primarily on Southern Alberta and the Viking light oil play at Halkirk-Provost.