Truly Absurd Valuation – Almost 100% Annualized
Growth & Trading At Two Times Leading Cash Flow
What would you say if I told you that I found an oil producer that is growing by more than almost 100% annually and it is valued at just two times leading cash flow?
What would you say if I told you that this company had all of its acreage right in the heart of an incredible oil play where breakeven prices are $26 per barrel?
It’s the best economics in North America. Maybe that’s why the Chairman put in $35 million of his own money into the company.
I have also made it one of the largest positions in ANY stock I have ever purchased.
You see, companies that are growing by less than one-third the rate of this company are valued at up to 5 times higher.
With the rate this company is growing it shouldn’t be valued at a massive discount to these other companies…
It should be valued at a premium. A significant premium.
On top of that—this is some of the most profitable production in North America! This company is producing oil for $26 per barrel.
Given what I have told you…..what would you say?
I suspect you would probably say a couple of things to me.
One might be —- “I don’t believe you!”
Rude! But ok, I get it.
Another might be —- “How is this absurd valuation possible?”
Well….I’m glad you asked one or both of those questions.
Because I’m going to answer both of them for you.
And then I’m going to answer a bunch of additional questions that you didn’t even ask.
More importantly though, I’m not going to ask you to simply believe me when I provide you answers to your questions about this company that is:
– annually growing cash flow in the triple digits
– has $26 dollar per barrel breakeven pricing
– trades at an absurd two times leading cash flow
Instead………
I’m going to give you the name of this company.
I’m going to give you my full 20 page report on this company.
And while this may seem crazy for me……
I’m going to give all of this to you for free!
How In The World Did I Find A Company So Inefficiently Priced?
The stock market is generally quite efficient.
You have educated professional investors buying stocks from educated professional sellers.
Everyone knows what they are getting into.
As a result pretty much everything that is known about a company gets priced into the stock price.
You can say that these companies are efficiently priced.
This efficient pricing is why mutual fund managers have such a hard time beating the stock market index.
These fund managers spend all of their time buying and selling stocks that are efficiently priced.
It is virtually impossible for these managers that are buying and selling efficiently priced securities to gain an edge.
A 2012 study by Standard and Poors showed the active mutual fund managers beat the S&P 500 index over a ten year period only 27 percent of the time.
Source: S&P SPIVA 2012 Report, The Power of Passive Investing
That is a sobering statistic.
Worse still, the longer the period of time that this study considered the less likely it was that a mutual fund would outperform.
This is pretty terrible performance.
The problem with these mutual funds isn’t that the managers aren’t smart.
The problem is that they are playing a game that they can’t win.
They are trying to find bargain prices in an efficient market.
They are trying to find bargains where bargains don’t exist.
Unfortunately this is where these managers are forced to operate.
This is the hand that they are dealt.
Because professional managers deal with large amounts of money they aren’t able look at small companies that are far more likely to be inefficiently priced.
Successfully investing $10 million into a small cap company isn’t going to move the needle for a fund manager who oversees a multi-billion dollar portfolio.
It would be a waste time.
I’ve already told you that the oil producer that I have found is growing at an annualized rate of more than almost 100%.
This company should be trading at a huge multiple of cash flow.
It isn’t.
It is trading at two times leading cash flow.
This company isn’t appropriately priced.
It is absurdly priced.
Why? How is this possible?
The answer lies in the fact that this company hasn’t been trading in an efficient market.
It hasn’t been trading in a market with professional educated buyers trading stocks with professional educated sellers.
Instead this company has been trading in a market—the hated junior oil market—that has had a complete absence of buyers.
And this sector has had some very motivated sellers wanting to exit.
This vacuum of buyers combined with motivated sellers has created a unique situation.
Right now, it’s a completely inefficient market.
I can honestly say that in my two decades of operating in the capital markets I don’t think that I have never seen a company fall through the cracks like this.
I know for a fact that I’ve never seen a company this absurdly mis-priced.
The Bakken is Back,
And More Profitable Than Ever Before
I’m sure you are well aware of it.
You have been sniffing around the oil and gas sector for a while.
All that you keep hearing about is—how great the Permian is.
You keep hearing things like “The Permian is the 800 pound gorilla of the oil industry”….
Or “The Permian is bigger than Saudi Arabia’s epic Ghawar oil field”……
Hey….it is absolutely true.
The Permian is great!
It is huge….
It is profitable…..
It is growing production……
The problem is that everyone knows this!!!
The result of that is that the greatness of the Permian is reflected in the valuations of the companies operating in it.
Again we get back to the fact that markets are efficient when everyone is looking at the data.
And everyone has been looking at the Permian.
Finding a bargain stock in the Permian today is incredibly hard for investors.
Finding acreage that isn’t incredibly expensive is hard for Permian operators.
Land costs are incredibly high in the Permian.
Deals are getting done at prices as high as $60,000 per acre.
And that was before oil prices really started rallying.
No my friends…..
If you really want a bargain you would want to go where the market isn’t looking.
You would want to go to a place where the market it much less efficient.
A place where investors and oil companies alike haven’t been looking….
That clearly isn’t the Permian.
Instead how about a place like the oil play that everyone has forgotten about?
A region that was once highly coveted.
But is now old news.
That place is the grandfather shale oil play.
The original shale oil boom….
THE BAKKEN !!!!
Yes, the Bakken.
While the entire industry has been falling all over itself about the Permian Basin…
Big things have been happening in the Bakken.
Companies have made a huge step change in the profitability of the wells being drilled there.
There has been another giant leap forward in the completion technologies that companies are putting to work in the Bakken’s oil rich formations.
In fact the changes in completion (fracking) technologies are so good that the play is now actually offering wells that are better than the Permian.
Like the $26 per barrel breakeven prices that I have told you that my favorite new oil producer is generating.
The chart below is from major Bakken producer Continental Resources speaks volumes.
The chart shows the profitability of Bakken wells at various oil prices.
The different lines represent different years of drilling.
With each passing year completion technologies evolve and the well results get better.
Please turn your attention to the blue line which represents 2018 wells that have so far been completed with these new step change technologies.
What a difference!
Let me walk you through the numbers.
I’ll focus in on $65 WTI oil price which is well below where we are today.
Bakken wells drilled in 2012 generated only a 10 percent rate of return at $65 oil.
In 2014 the number inched up to 20 percent…..
In 2015 it was 40 percent…..
In 2017 these Bakken wells could generate 65 percent rates of return…at $65 WTI prices.
To be clear none of those rates of return excite me.
They would not get my investment dollars.
Not even close.
But look at what has happened in 2018.
And it happened while all of the attention of the industry and investment community was focused on Permian.
Profitability of Bakken wells at $65 didn’t inch higher as they had over the previous six years…..
Profitability of Bakken wells made a giant leap forward.
2018 Bakken wells are generating an astounding rate of return of 140 percent!!
That is huge.
Think about what that means.
The profitability of Bakken wells has more than doubled.
That means that the value of Bakken acreage has also more than doubled.
I’ve dug into the economics of this new Bakken well “type curve”.
They are phenomenal.
Wells are paying out the entire cost of drilling and completing them in just over six months….that is better than best portions of the Permian.
The present value of each drilling location is now a massive $14 million.
The new type curve is resulting in additional $2.8 million of cash flow from each well in just its first year.
Break-even pricing is down to $26 per barrel.
Let me say that again……TWENTY-SIX DOLLARS PER BARREL!!!
The Bakken has been given a whole new life.
Yet the investment community has missed it.
But it is starting to catch on as the price of oil rises.
Eventually as more institutional eyes get focused back on the Bakken they are going to find this little company that has put together an incredible land package….
Right in the core of the Bakken.
What these institutional investors are also going to find is that this little company is growing at an annualized rate of more than almost 100% per year.
And has a stock price that is trading at the most absurd valuation that most of them will have ever seen.
two times leading cash flow!!!!
If Two Times Leading Cash Flow Is Absurd – What Would Be Normal?
I keep repeating the same numbers to you.
A growth rate of almost 100%.
A valuation of two times leading cash flow.
I keep doing that……
Because I can’t believe that the numbers are real.
Yet they are.
I’ve crunched them over and over again and I lay them out in full in the comprehensive company report that I will show you how to access.
The reason that I can’t believe the numbers is that they are truly absurd.
Most oil producers that are barely growing trade for 6 times cash flow and higher.
That suggests a very juicy profit potential for my mis-priced oil stock trading at just 2x leading cash flow. And this company isn’t just growing.
It has the fastest growth rate that I’m aware of…….
And it is growing like this while living within cash flow.
Incredible……
I’ve seen growth like this before but it always comes from companies that are borrowing money to achieve it.
It is beyond dispute that this valuation is absurd.
It’s a product of a completely ignored corner of the market.
That is something that can’t last forever.
We have been given a gift to take advantage of.
All of the factors that I laid out earlier have resulted in the market becoming completely inefficient for Bakken focused junior oil producers….
Especially one that isn’t even listed in the United States.
The wheels of change are in motion.
There are now two analysts covering the stock.
And the rise in oil prices finally has big institutional money looking into the junior oil space.
What we have right now is a rare opportunity to swing for the fences.
This is a fat pitch that deserves your very best Barry Bonds homerun swing.
And yes I’m talking about a Barry Bonds jacked up on steroids kind of swing.
This company shouldn’t be valued at two times leading cash flow.
This company should be valued at multiples of the current two times leading cash flow.
Low to no-growth companies trade at six times cash flow.
Fast growing companies that have growth rates close to 30 percent get valued at 7 to 9 times cash flow.
This company is growing significantly faster than that.
I expect that you can do the simple math required to figure out what a more appropriate valuation might be……and what that would mean for this company’s share price.
What Can I Tell You About This Company?
I can still remember when I had that “lightbulb” moment.
The point in time where I really figured out how to invest in oil and gas producers.
I would like to share it with you.
What I figured out was that I needed to stop thinking about these companies as actually being oil producers.
Instead I needed to start thinking of them as compounding machines.
Let me explain what I mean.
Every time an oil producer drills a well the company is choosing to invest its cash into the ground.
What matters is how much that cash invested in the ground actually returns to the company.
What is the return on investment?
This is no different that choosing which mutual fund manager that you want to invest your money with.
Do you want to invest with the mutual fund manager that has generated 8 percent annualized returns for 20 years?
Or do you want to invest with the mutual fund manager who has generated 12 percent annualized returns for 20 years?
The answer of course is obvious.
You invest with the mutual fund manager that generates the 4 percent higher annualized returns.
What isn’t obvious however is just how much of a difference that 4 percent of excess performance means over time.
Check out the chart below.
It compares $100,000 dollars that is invested for 25 years at 8 percent versus $100,000 invested for 25 years at 12 percent.
Over time the difference that the higher rate of return creates is spectacular.
The $100,000 compounded at 8 percent over 25 years turns into $684,000…..not bad.
Meanwhile the $100,000 compounded a 12 percent over 25 years turns into a whopping $1.7 million…..almost three times as much!!!
The power of compound interest folks!
No wonder Albert Einstein called compound interest the eighth wonder of the world.
As investors you and I have long been aware of compound interest.
What clicked for me though is to think of an oil and gas producer in terms of how fast they can compound my money.
Think about it.
These companies drill hundreds of wells over time.
Every time they drill one of those wells they are effectively investing money.
The company that generates the highest returns on that money invested drilling wells is going to be the best performer over time.
That means that by far the most important thing to consider about an oil producer is the rate of return that the company generates investing cash…….drilling wells.
When I realized this my returns as an investor immediately skyrocketed.
I completely stopped owning companies with mediocre to good acreage.
Instead I made my number one priority to make sure that I only owned companies with the very best acreage.
Companies that could invest cash at the highest rates of return….and thereby compound money the fastest.
That is why I’ve invested $200,000 of my own money in this particular oil producer.
This company has a deep inventory of Bakken wells that are generating better rates of return than anything else in the oil business.
Let me again show you the rates of return that these Bakken wells are getting with the 2018 step change in completion technology.
We are talking about a 140 percent rate of return at $65 WTI oil pricing.
Imagine how fast this company can compound money when it is investing at that kind of rate of return.
Imagine how fast this company is going to be able to grow.
Amazing………what else can I say?
What Else Can I Tell You About This Company?
The coolest thing about this undiscovered Bakken producer that is trading for two times leading cash flow is how management came to accumulate its high quality land position.
It is a story that is all about discipline.
Painful, dull, tedious and repetitive work.
I’ve already told you about these company’s Chairman and largest shareholder.
A wealthy man, worth over $100 million dollars.
In fact he owns $35 million of this particular company’s shares alone.
When this gentleman took over this company he developed a long term strategy that was focused on one key thing.
He was determined to build a company around “best in class” acreage.
He wasn’t worried about how big his company became.
He wasn’t worried about how many Bakken acres the company accumulated.
All that he wanted to make certain was that this company bought only the “best in class” acreage.
He wanted every well that this company drills to be a great investment…to generate big returns on investment.
Like I finally learned this man understands that what matters most is the rate of return that you get when drilling oil wells.
With this strategy in hand when he assumed control this Chairman and his team went to work.
That works involved an operation that they called “Smile and Dial”….
These boys relentlessly worked the phones.
They tirelessly knocked on countless doors.
They spent hours poring over land ownership records.
The objective was to slowly but surely piece together a good sized land position made up of core Bakken acreage.
Picking up tiny parcels of land that larger producers couldn’t be bothered with.
The “Smile and Dial” operation took a long time.
It was painful…..tedious.
But…..it was also successful.
In total, over several years the team was able to build that high quality land position that the Chairman desired.
The land was core of the core.
Accumulated by relentlessly targeting the landowners that they knew had the best available undeveloped acreage.
It took an astonishing 60 deals to assemble the land package that the company now owns.
They dug this acreage out right from underneath the noses of the big boys that are operating in the Bakken.
They did it by “Smiling and Dialing”, eventually putting together a serious package of land.
By repeatedly putting one foot in front of the other this company was able to travel an enormous distance……to build a significant, core land position.
There aren’t many companies that could have pulled this off.
This took years and an incredible amount of patience and discipline.
I attribute the reason that this company could accomplish this to the fact that the man in charge is a major investor in the company.
He isn’t there for the paycheck.
He is there because he wants to build shareholder wealth….
Building shareholder wealth is something that he has most definitely done.
Now with his acquisition work done and oil prices rising this man and his team are ready to monetize their investment.
They are ready to see their hard work reflected in the share price of this company.
Production is soaring and cash flows are gushing.
This absurdly low valuation of two times leading cash flow may exist today…..but I guarantee you it isn’t going to be around for long.
This Is The Best Junior Oil
Stock Bargain I’ve Ever Found
My OGIB subscriber service is now ten years old.
I’ve been active in the capital markets a lot longer than that.
I can honestly say that this is the most severely mispriced stock that I have ever come across.
As I keep saying, the current valuation is absurd.
What makes it even more absurd is the fact that a serial company building entrepreneur is involved here.
A man worth tens of millions of dollars.
Investors should be climbing over top of each other to own shares beside him.
To own the company that he has put a huge chunk of his massive net worth into.
I don’t pound the table on a stock very often.
In fact I’ve only done it three times before since I launched my OGIB service.
In each case I was able find instances of extreme market inefficiency.
It is in this type of environment that share prices can be nonsensical.
This kind of absurd bargain doesn’t happen very often……
But it does happen.
These are the rare fat pitches that you need to take advantage of because they have a material positive impact on your net worth.
You may not remember it….but I’ve tried to get you onboard fat pitches before.
In fact as a member of my e-mail list I actively tried to convince you to take a look at each of the other three times I have issued a table pounding buy on a stock.
Let me remind you of those three instances where I was able to exploit severe market inefficiency.
I want you to take me seriously this time.
A 6-Bagger in 7 Months: 2012
Inefficient Market Example #1
The hardest thing to do is get an edge in a sector when investment interest is high.
It is much easier to exploit the cyclical nature of the energy sector.
Than it is to outperform when oil stocks are in vogue.
That is why I was so proud of what I was able to accomplish in 2012 with DeeThree Exploration.
This was my big winner in a market environment where it was incredibly difficult to find value.
I had to dig deep for this one.
In 2012 everyone believed that oil prices were headed higher and not ever coming back.
Peak oil was very much a mainstream opinion.
At that time the market just didn’t understand just how much shale production was going to grow over the next three years.
You couldn’t find anyone who thought we would see $50 per barrel oil again.
In 2012 companies were priced for sustained high oil prices.
That was especially true the exciting, fast growing juniors that the market had a taste for.
I owe the credit for the discovery of DeeThree to my most valuable asset.
That being my research network.
My network of contacts in the energy patch.
I’m talking about people involved directly in and around the energy patch.
I’ve spent years of my life building up this network and it took blood, sweat and tears to do it.
All of that effort is worth it when I get tipped off to an investment opportunity like DeeThree Exploration.
What happened in 2012 I was able to discover a small and entirely new oil play that the market wasn’t aware of.
The analyst community wasn’t onto it.
And the companies involved really weren’t talking much about it either because they were still accumulating land.
The companies didn’t want word getting out and land prices being driven higher.
I caught wind of the fact that something special was going on.
Something that wasn’t priced into the share prices of the companies involved.
I remember exactly how it happened.
I sat down at my desk on Friday morning and something piqued my interest.
And after working the phones all weekend (some people didn’t care for my weekend questions!)….
And reading every set of financial statements I could get my hands on….
I knew that DeeThree Exploration was a company that my subscribers and I had to own.
Early the next week I told subscribers to back up the truck on DeeThree Exploration.
I did the same with my own family’s money…..I invest real money in every company that I recommend to subscribers.
I told my subscribers that major production increases were coming.
And that none of that production growth was priced into the shares of DeeThree exploration.
Those production increases did come…..and we rode the stock from $2 to $12 over the course of half a year.
A six-bagger!
In a market where finding value was next to impossible.
A 7-Bagger in 9 Months: 2014
Inefficient Market Example #2
I’m an energy investor.
Let me tell you what that means and doesn’t mean.
What it doesn’t mean is that I buy oil and gas producers and pray that commodity prices go up.
One look at my track record will tell you that.
In 2014 when oil prices collapsed by 50% my OGIB real money portfolio went up by 18%.
In 2015 when countless oil producers were forced into bankruptcy my OGIB portfolio still went up — and still by double digits
Even in 2016 when oil traded as low as $27 per barrel my OGIB real money portfolio went up by 28 percent.
Here is what I believe……
The oil and gas business, like any commodity business is cyclical.
Therefore it should be invested in accordingly.
You don’t suffer from the cyclicality….
You EXPLOIT IT!!!
The cyclical nature of this business is what creates the best trading opportunities.
In March 2009 I launched the Oil and Gas Investments Bulletin because I believed there was an incredible opportunity to profit in this sector.
My analysis at the time told me that OPEC had taken enough oil off the market to send oil and related stock prices higher.
I was right.
In late June 2014 I e-mailed my subscribers and told them that I was going to start unloading my oil and gas stocks.
I didn’t know that oil was about to collapse, but I was certain that the time to sell oil and gas stocks was after a great six month run and when oil was over $100 per barrel.
I was right again.
It wasn’t rocket science…..just a combination of experience and common sense.
Between 2009 and today some of my very best trades have come outside of oil and gas but still within the energy sector.
In 2013 and 2014 I made the most money I ever had to that point on a single trade by owning a US listed ethanol stock.
My research and network of contacts turned me on to the fact that a record corn harvest was a sure thing and that ethanol producer margins would blow out.
The fall corn plant of 2012 was one of record levels and my research showed that the winter and spring weather were cooperating to create a record corn harvest.
A record harvest means low corn prices.
For ethanol producers that is tremendous news as corn is their primary input cost.
On top of this great news on the cost side the little known “RINS” market was also sending a screaming signal to get long ethanol producers.
After weeks of work I confirmed that this ethanol opportunity was the biggest fat pitch I had found in years.
Further due diligence revealed that an undiscovered company named Pacific Ethanol was the best way to profit from this opportunity.
Recognizing this as a rare fat pitch I bought aggressively and told my OGIB subscribers to do the same.
It was a no-brainer trade and I verified everything that I thought was going on with some of the very best minds in the business.
I purchased Pacific Ethanol (PEIX-NASD) at $3.15 in November 2013, and sold it at $23 in July 2014.
Many of my subscribers did the same.
That’s not a typo—it went up by $20 a share in just nine months.
A seven bagger in just over half of a year.
When I bought Pacific Ethanol the company was underfollowed and inefficiently priced.
Seven months later the market had caught onto the story.
I won’t for a second try and tell you that I find this kind of opportunity very often.
Certainly not every year, likely not even every second year.
What I do know is that I’ve gotten quite good at exploiting the rare fat pitches that I do identify.
Pacific Ethanol was one of those.
A 7-Bagger in 8 Months: 2016
Inefficient Market Example #3
I enjoy making money.
I also enjoy moving around the energy sector to take advantage of unique opportunities like Pacific Ethanol.
For me though……there is nothing as satisfying an undiscovered oil producer sitting on incredibly valuable acreage.
I love getting in a junior producer before the market knows what is going on and then watching as the company ramps up production.
And the share price soars.
DeeThree worked out great for my subscribers and myself.
Our experience in 2016 with Resolute Energy worked out even better.
In 2016 one of my network of oil industry contacts told me that I should take a look at the shareholder list of a company that I had little interest in.
I didn’t take me long to figure out why I had been pointed in this direction.
Texas oil billionaire John Goff had quietly built himself an oddly big position in this stock.
The company was Resolute Energy.
When I started working the story hard I discovered that something big was happening in the Delaware Basin.
There were rumblings that someone had “cracked the code” on the play and that the economics of drilling Delaware Basin shale oil wells had experienced a step change improvement.
Much like what has happened in the Bakken with the company that I’m going to give you a full free report on today.
If the rumblings I had heard in the Delaware Basin were true I recognized that would mean that these wells had gone from marginal rates of return to having virtually the lowest break-even costs on the continent.
In other words acreage in this play had gone from not having much value to being extremely valuable.
And in doing so would create multiples of upside in the share price of this company.
Connected as he is billionaire Goff was clearly aware of what was going on.
He had figured out that when the play went from marginal to superior, the value of Resolute Energy’s big acreage position went from a few hundred dollars per acre to tens of thousands of dollars acre.
So I rolled up my sleeves and I got to work.
I worked my network of contacts.
I dug deeply into what the companies around Resolute were doing.
What I was able to confirm was that the market had completely missed the boat on how valuable Resolute’s Delaware Basin acreage now was.
With few investors looking at this region the market for Resolute’s shares had become incredibly inefficient.
I could hardly contain my excitement.
I knew I had found an inefficiently priced stock that was worth multiples of the current trading price.
Convinced that this was the biggest fat pitch I had seen since Pacific Ethanol I took a huge position in the shares of Resolute.
I advised my OGIB be subscribers to do the same.
The result was spectacular.
I had thought the market reaction to Pacific Ethanol was impressive….
Over the 12 months that followed my discovery of Resolute Energy…
The stock went from $2 to almost $50 per share.
A 25 bagger in a year!!!
My subscribers and I enjoyed much of this ride—we got a 7-bagger starting at $5/share.
I gradually sold on the way to the top.
The similarities between this experience with Resolute and the company I’m here to tell you about today are eerie.
Small undiscovered companies (this one is actually much smaller).
Incredibly valuable acreage with wells that generate huge rates of return (the Bakken wells are actually even better).
Extremely wealthy and successful oil men owning large percentages of the company (this time the ownership interest is even larger).
The only real difference is that this Bakken producer is even cheaper.
Even Resolute wasn’t trading at two times leading cash flow!!!
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Here’s the 2018 Version—
Inefficient Market Example #4
Did you ignore my pounding the table on DeeThree in 2012, Pacific Ethanol in 2014 and Resolute Energy in 2016?
I hope you didn’t, but I know that many people did.
If you are on my mailing list you would have received an e-mail from me pounding the table on each of these three stocks.
A 7-bagger in 7 months in 2012.
A 6-bagger in less than a year in 2014.
Another 7 bagger in 8 months in 2016.
Now in 2018, I have my Next One in sight.
When I get a truly exceptional idea…
I tell you about it. It is in my best interests to do so.
Why?
Ideally so that you can share in the opportunity as an OGIB subscriber.
If not that…..at least it allows me to come back to you later as I’m doing now and show you how well that previous opportunity worked out.
The reality is that investing is hard…..very hard.
Getting a big informational advantage on the market is very rare.
Spotting a company that is inefficiently priced extremely difficult.
That is the nature of this age.
The internet has made access to information so easy that beating the market is exponentially harder than it was 25 years ago.
Today with this Bakken producer we have a rare edge.
A company growing at an annualized rate of almost 100%.
With oil wells that have breakeven prices of $26 per barrel
Yet this company is valued at just two times leading cash flow.
A fraction of what the company should be valued at.
This is a case where we are going to get an explosive combination of growth and revaluation of the company’s shares.
This is going to happen simultaneously and the share price of this company is going to rocket higher.
I just put $200,000 of my own money into the shares of this company.
This is the kind of opportunity that I can’t afford to not exploit.
You probably can’t afford to not take advantage of this either.
Do not ignore me this time.
This is a unique opportunity.
A giant fat pitch.
Doubling production in 2018 yet trading at two times leading cash flow.
An oil play that is now the most profitable on the continent.
I’m putting my money where my mouth is on this.
A lot of my money.
How I Did I Find This Company?
I showed you how the OGIB portfolio has performed since I launched my service in 2009.
Only one of those years the returns weren’t at least in the double digits.
I’m very proud of this obviously.
Especially considering the fact that the oil and gas sector has been a brutal place to try and make money.
The energy sector has significantly underperformed the S&P 500 since I launched the OGIB portfolio in 2009.
Yet I have managed to significantly outperform the S&P 500.
How did I do this?
The short answer is by taking advantage of the really big opportunities like the one in front of us today.
The long answer is that it wasn’t easy.
Just like it wasn’t easy to find a company growing at an annualized rate in excess of almost 100% and trading for 1X cash flow.
Finding something like this starts with being lucky.
I’m lucky to love what I do for a living.
Because I love this business I’m more than happy to work 350 days a year.
This isn’t just a job…..this is my passion.
I tell my kids every day.
The key to a great life is finding a job that you would do for free.
It is the same advice I’ve heard Warren Buffett give many times.
I also spend a lot of money on research–tens of thousands of dollars every year.
I get every analyst report available on every company.
I subscribe to services that cost multiples of mine that are run by brilliant investors.
And I know everyone in and around the energy sector.
My rolodex is overflowing with names and numbers–analysts, hedge fund managers and entrepreneurial CEOs.
Because I represent hundreds of investors these men and women are happy to take my calls.
So when you ask me how it is that I found a company growing this fast and trading at 2 times leading cash flow…..
My long answer is that I found it by working 330 days a year, spending hundreds of thousands of dollars on research over the past decade and reading everything that I can get my hands on.
My short answer is that in this particular instance I discovered that a very rich man had taken a very large position in a company that he should have no business being interested in.
That got my curious.
And once I’m curious I beat a story until I understand it completely.
What I’ve come to understand about this company is that I’ve seen a movie like this before.
It was called Resolute Energy and it turned out to be a 25 bagger from bottom to top.
The only difference is that this company is even cheaper.
No Mystery How This Plays Out
I don’t think it is too hard to figure out how the next couple of years for this company are going to go.
We have one of the great North American oil entrepreneurs who owns $35 million worth of stock–he effectively controls this business.
That is a great thing for shareholders.
At no point was this man reliant on the capital markets to build this company.
He financed it himself.
You can do that when you are rich.
He built the company slowly…..painstakingly slow.
“Smile and Dial”…again, and again, and again.
He waited to build up a sizable land position.
A land position made up exclusively of the land in the core of the core of the Bakken.
Then he waited for the right moment to kick off the explosive growth that he knew these assets were capable of.
That moment arrived in 2018.
First…. the Bakken had a step change in completion technology that pushed the returns from drilling through the roof.
Second…the price of oil moved higher.
Now it is time to hit the gas pedal.
There are two analysts that now follow this company.
People are starting to catch on to the story.
Two times cash flow is not going to be around for long.
Those analysts are projecting for production to more than double in 2018 year on year.
In fact production at the end of 2018 is going to be almost five times were it was at the end of 2017.
I’m not joking. I can show you the analyst report.
Then in 2019 production will come close to doubling again.
From the end of 2017 to the end of 2019 production is going to increase tenfold.
Cha-cha-cha……Ching!
Now you know why I’ve got $200,000 of my own money invested in this company.
two times leading cash flow and these kinds of growth figures.
The company’s Chairman has a lot more invested than that of course.
He has tens of millions invested.
I can guarantee you that he will not be selling those shares on the open market.
I do believe however that after production goes up tenfold that it is more than likely he will be looking to monetize his position.
To cash out and reap some huge profits.
This exit strategy is not going to be complicated.
The land position is the core of the core of the Bakken.
He was able to put it together one tiny deal at a time.
The big Bakken players surround this company.
Now that all of this acreage has been consolidated in one company they are chomping at the bit to own it.
The only question is what is the price that they are going to pay?
The answer is that they will be paying a fair price.
That fair price sure isn’t two times leading cash flow.
I’ve explained that slower growth companies trade at six or seven times cash flow.
Plus that cash flow is already skyrocketing higher.
Production is likely to increase tenfold before this Chairman will consider selling towards the end of 2019.
You don’t need to be a math whiz to figure out that when the monetization event occurs……it will be at multiples of the current share price.
Why There’s Urgency…
I can’t stress enough that if you are interested in this company now is the time to be digging in.
Only two small regional analysts have gotten onto the story.
I can see their influence in the number of shares being traded.
Oil prices are up….more analyst coverage is coming.
That means more institutional money is going to be starting to accumulate shares.
Further…..this company is ready to take its show on the road.
The entrepreneurial chairman who built this business is ready to show it off.
He is ready to see the stock price start reflecting the value of what he has created.
Additionally the amount of drilling this company is doing is ramping up.
As that happens production is going higher and so are cash flows.
That makes the company bigger and puts it on even more radar screens.
This company is absurdly valued only because the entire market has been oblivious to the story.
That is changing quickly….even my interest here draws more attention.
I’ve got many institutional subscribers to my Oil and Gas Investments Bulletin.
What this boils down to is…
You can buy a well-known company trading at 6 times cash flow growing at 10 percent per year.
Or….you can buy this company growing at almost 100% plus per year and trading at two times leading cash flow.
I’m not trying to tell you that I find these things every week…. I don’t.
I’ve found three in a decade….this will be four.
One Last Thing To Understand…
I have spent 10 years doing nothing but look at energy companies.
One thing that I have learned is……
Any idiot in charge of an oil producer can grow production.
All they need to do is spend enough money.
That isn’t the case here.
Remember this is core of the core of the core of the Bakken.
It took 60 painstaking acquisitions over multiple years to accumulate this land.
“Smile and Dial.”
Rejection over and over and over.
And then come back for more.
It was a painful tedious process……but
The pain was worth it, these wells generate huge rates of return.
The table below shows you what these wells can do at $55 WTI prices.
That is $15 below where oil trades today!
The key number that I want you to focus in on is the payout.
Payout is how long it takes for a well to generate enough cash flow to repay the entire cost of the well.
Generally a two year payout is considered satisfactory in the business.
I demand better from the companies I invest in.
But even for my high expectations what these wells can do is incredible.
At $55 WTI these wells are paying out in just over half of a year.
Remember…two year payouts are generally considered acceptable.
The Bakken wells that this company is drilling are incredible at $55 WTI pricing.
But WTI isn’t at $55 is it…..
At current oil prices the payouts on these wells are……ridiculous.
Just a few short months. It’s a license to print money.
This is the secret sauce that is creating the explosive growth that this company is experiencing.
With payout times that are this short this company is growing production at almost 100% or higher and funding that growth with internally generated cash flow.
That is absurd.
But it is a testament to building a company the right way…by an experienced, wealthy man only interested in the best acreage.
A man not interested in making a small bit of money quickly, but instead interested in making a lot more money slowly.
The only thing more absurd than the rate of cash funded growth—is the valuation of this company’s shares.
It is time to get moving on this before this one runs away from you…….
Here’s the Name and Symbol—For FREE.
I spend all of my time looking.
330 days a year—and long hours each of those days.
Even with all of that work I’ve found only 3 Big Fat Pitches in the past decade.
I spoke to those Fat Pitches earlier.
All three of them generated multi-bagger returns and all three of those big returns happened very quickly.
This is Great Big Fat Pitch number four.
I’m not asking much of you.
In fact, all I want you to do is take a look at my free full report on this company.
You take no risk, and get the opportunity to see if you think this company offers the reward that I think it does.
I put $200,000 of my own money into this one…and the Chairman has tens of millions of his own money invested.
Neither of us would have done that if we didn’t truly believe…
You have nothing to lose and potentially a giant windfall to gain.
Click the button below to get my FREE, No-Risk Report that reveals the name of this stock – and everything you need to know to invest right away.
If you’re a First Time Subscriber, you get 30 days to review my research and service with a 100% money back guarantee, no questions asked.
Your Risk-Free trial subscription to my Oil & Gas Investments Bulletin will also keep you up-to-date on this company’s activity as developments unfold.
But sitting on the sidelines is not an option – if you miss the boat on this one, you can’t say I didn’t give you advance notice.
This is only the fourth “Pound-The-Table” recommendation I’ve made – and we knocked the first three completely out of the park.
There’s absolutely zero risk – so take a moment now to claim your FREE report and learn the name, trading symbol and story behind this absurdly low valuation company right now.
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