Questerre Energy

Go down

Questerre Energy

Post  Fred on Thu Nov 04, 2010 9:29 am

It will probably inch lower, and I will add to my already terrible position over the next two months.

I like QEC because:
1. Very large potential as a natural gas play (environmentally better than most energy sources)
2. The groundwater contamination concerns with frac'ing are bullshit and will be realized. As a reference people can watch the documentary 'Gas Land' and hopefully realize QEC is not like those American companies.
3. Extremely low value at the moment.
4. Potential medium to long term play (5-8 months) as they will resume operations in spring which should bring them back to near where they were trading before the delay.

Concerns:
1. Out of money and may need to dilute to raise more.
2. Have to wait.

Any other analyses?

Fred
SDDL Insider
SDDL Insider

Posts : 125
Reputation : 5
Join date : 2010-07-01
Age : 36
Location : Sault Ste. Marie, On

View user profile http://northernskiesoutpost.wordpress.com/

Back to top Go down

Re: Questerre Energy

Post  Max on Wed Nov 17, 2010 11:12 am

Is it time, or should we wait some more?

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  Fred on Wed Nov 17, 2010 11:21 am

Well, I had originally set a buy in target at 1.50 if it got that low. I am not really sure if it has stabalized yet/reached its bottom. I think if the long term view is in focus this is a good chance to get in (what's a few pennies per share if the price target is double).

In the short term it could go either way. I don't believe it will go lower than 1.35. I will add to my position around the current prices and am confident in a substantial recovery over the next 5-8 months.

Fred
SDDL Insider
SDDL Insider

Posts : 125
Reputation : 5
Join date : 2010-07-01
Age : 36
Location : Sault Ste. Marie, On

View user profile http://northernskiesoutpost.wordpress.com/

Back to top Go down

Re: Questerre Energy

Post  Max on Thu Nov 18, 2010 2:01 am

$0.60 cash, $0.90 per share book value.

No debt. Very low liabilities. I would actually like to see them take on more debt if they can get it at good rates.

Big part of expenses is depreciation which is non-cash

Paying lots of salaries in stock options, so it is non-cash, but exercise prices become very important. All the new options being issued have an exercise price of around $4, but there are still a lot of older options with exercise prices well under $1. This means siginificant potential for dilution.

They have $4-5M in bad debt. Very, very high, which gets me thinking there is an even bigger problem somewhere.

Nothing else to say about it. It is not in as bad shape as Connacher, but seems to be in that waiting for something to pay off mode. Meanwhile, they are bleeding through cash. Their current balance sheet strength seems to be the result of what I can only suspect was a fraud on the investors involved in the private placement in Norway who paid $4 for the stock not too long ago. This company is going to have a very hard time making another private placement any time soon. But who knows, memory is short in stocks, and if it is profitable, they will find someone who will buy.

OK, so what is the good news we are waiting for with this stock? Potential gas reserves. Wait to see how pricing and drill results play out I guess.

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  Fred on Thu Nov 18, 2010 11:29 am

Again I agree with your analysis. Some fishy things have happened in the past, and I don't know of anything that is going to happen in the near future to bring it up. That is a good reason why it sill has a bit of room to continue going down. Nobody is interested yet because there are better opportunities elsewhere in the mean time. I would normally think this is a good time to buy if you are willing to wait, but I am already in so heavily that I am trying to time my down averaging as best I can. Wen prvious operations resume in spring, it will (probably cautiously) rise.

Fred
SDDL Insider
SDDL Insider

Posts : 125
Reputation : 5
Join date : 2010-07-01
Age : 36
Location : Sault Ste. Marie, On

View user profile http://northernskiesoutpost.wordpress.com/

Back to top Go down

Re: Questerre Energy

Post  Max on Tue Dec 07, 2010 11:17 pm

OK, dumped QEC for tax loss at $1.53. Most recent double down purchase up 13%, but still total loss of $1,500 (1500 shares at avg price of $2.60). Ouch! Have to wait 30 days to avoid superficial loss rules, so I will see what happens by January.

Can anyone else recommend another natural gas play? Any thoughts on Encana?

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  lukera on Mon Dec 20, 2010 2:51 pm

up 16% today.

**deleted comment: got caught up in stockhouse banter. stupid gossipers Wink***

anyway. anyone know what might trigger a rebound like this?
avatar
lukera
Admin

Posts : 174
Reputation : 0
Join date : 2010-07-01
Age : 36
Location : sault ste. marie, on

View user profile

Back to top Go down

Re: Questerre Energy

Post  Max on Tue Dec 21, 2010 1:34 am

It is up just to spite me. That is the only reason. Seriously, I guess there is some anticipation of good drill results or something.

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  Max on Wed Dec 29, 2010 11:58 am

Maybe it is the musings of bitterness at having missed the boat, but if the stock buyback is the only news, I don't know how sustainable this lift will be. 50% increase in stock price because of 10% stock buyback? Must be something related to drill results.

It is a little surprising that they would burn through excess cash in this way. You will have to see them take out some debt or issue more shares soon in order to keep operations moving forward. If they had found something worth developing, they would be conserving cash in order to develop it. This move only makes sense if they have no better use for the funds, or if they have some great drill results to release and they are buying back before releasing those results in order to reissue those shares at a higher price later (seems like this kind of thing would not be legal though). Perhaps this is just a move by management just to allow them to exercise their slightly out of the money stock options (or to maximize profits on in the money options).

OK, bitterness aside, lesson learned is that having patience will eventually pay off. In this case sooner rather than later.

I admit for now that I was wrong.

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  jkucher on Wed Jan 05, 2011 11:32 pm

Guys,

I think the rebound in QEC is that winter in the US is expected to be colder than usual and it's driving the price of Natural Gas up ever so slightly and the price of Oil is going up. We need to find out at level prices of natural gas and Oil the company is profitable at. If gas stays at $4.5 per million BTU's for the next 5 years is the company going to make money. Because I don't think Nat gas is going to increase any time soon. There is a ton of Shale gas out there, so the only players who are going to make any money is the low low cost producers. I took a look through QEC's financial report so see why they are losing money.

It says "The Company considers netbacks a key measure as it demonstrates its profitability relative to current commodity prices. Operating netbacks per boe equal total petroleum and natural gas revenue per boe adjusted for royalties per boe and operating expenses per boe."

According to the last quarter's results the Operating netback was $32.95 per BOE (Barrel of oil equivalent (“boe”) So 32.95 per BOE isn't too bad. It also looks like there operating expensive s are going down per BOE

So I think the problem of them losing money is volume but only because they can't make enough high to compensate for there capital expenditures. Maybe you guys already know this, but I just started looking at QEC today. I don't know if they have anything else coming online soon, but if so and with the increase in the price of Natural Gas and Oil they may be able to turn this around.


jkucher

Posts : 11
Reputation : 0
Join date : 2010-11-17

View user profile

Back to top Go down

Re: Questerre Energy

Post  jkucher on Tue Jan 18, 2011 11:39 pm

Looks like this stock is still diving. Quebec Project delayed. I wonder how much more bad news there is before it's a good time to buy

jkucher

Posts : 11
Reputation : 0
Join date : 2010-11-17

View user profile

Back to top Go down

Re: Questerre Energy

Post  Max on Mon Jan 24, 2011 11:25 pm

QEC back at level I sold at for tax loss. Tempted to buy back in. Missed the bump in price though. Need a fresh analysis.

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  jkucher on Tue Feb 08, 2011 12:14 am

I'm in at $1.55, looks like I got in at the right time. Also, I noticed all the options for this stock are set for $3. I thought that's was kinda interesting.

jkucher

Posts : 11
Reputation : 0
Join date : 2010-11-17

View user profile

Back to top Go down

Re: Questerre Energy

Post  Fred on Wed Mar 09, 2011 10:26 am

This is gonna hurt! I wish I had the cash to average down again...

Fred
SDDL Insider
SDDL Insider

Posts : 125
Reputation : 5
Join date : 2010-07-01
Age : 36
Location : Sault Ste. Marie, On

View user profile http://northernskiesoutpost.wordpress.com/

Back to top Go down

Re: Questerre Energy

Post  Max on Wed Mar 09, 2011 11:02 am

Bought in at $1.23 this morning. anybody know the reason for the sudden drop?

Everything was on course for eventual recovery in about a year as far as I could tell.

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  Max on Wed Mar 09, 2011 11:16 am

Some article that their properties should be valued at $0, since there are delays on production due to continued studies of the environmental impact of fracing. Not too worried about it yet.

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  Fred on Wed Mar 09, 2011 11:34 am

BAPE report... it is Quebec's version of a strategic environmental assessment report. They basically recommended to the government that no comercial shale fracking should occur without further research, but research will require some testing... I think one of the big problems is that it was published only in french and it is 325 pages long. The french part of it makes it particularly confusing, because translations are contradicting, and I am actually suprised the stock dropped so much, because the report was expected to say this. Additionally it shouldn't affect QEC because they are not looking at comercial production for a few more years, and only testing to determine the scope of their resource. I'd like to see a statement from the company and the government about how things will proceed, and whether QEC's plans for resuming operations can continue as planned this spring. Not sure at the moment. I'll have to update when I learn more.

Fred
SDDL Insider
SDDL Insider

Posts : 125
Reputation : 5
Join date : 2010-07-01
Age : 36
Location : Sault Ste. Marie, On

View user profile http://northernskiesoutpost.wordpress.com/

Back to top Go down

Re: Questerre Energy

Post  Fred on Wed Mar 09, 2011 1:02 pm

This post on agoracom pretty much sums it all up the way I interpreted it.

http://agoracom.com/ir/Questerre/forums/discussion/topics/473143-dmastercard/messages/1526493#message

Fred
SDDL Insider
SDDL Insider

Posts : 125
Reputation : 5
Join date : 2010-07-01
Age : 36
Location : Sault Ste. Marie, On

View user profile http://northernskiesoutpost.wordpress.com/

Back to top Go down

Re: Questerre Energy

Post  Max on Fri Jul 08, 2011 4:01 pm

This one finally going to recover or is the 15% gain today only temporary?

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Re: Questerre Energy

Post  Fred on Sat Sep 03, 2011 7:33 am

Unfortunately everything that Questerre once had on its horizon will take a long time to develop, but I see excellent long term potential. The whole Quebec shale play has now been put on the back burner due to a formal and full scale government environmental impact assessment. This is not to say that the shale gas fire is out, just smoldering away as the government process gets carried forward. I think with the particular style of fracking and the methods employed by Questerre, this EIA process will favor Questerre in the end. QEC may even be part of the EIA process whereby the government allows them to drill and frack test wells as part of the EIA study, which could continue to proove out their resources and better position them (and the industry) once the guidelines for proceeding with shale gas development are released.

In order to diversify their company and reduce their reliance on shale gas they have begun advancing other oil and gas plays in western Canada and they have been proving themselves successful at that. Continued expansion of these alternative assets will help them emensely, not only with respect to their their bottom line, but also in respect of their positioning and financing of the shale assets once they are granted permission to proceed with their development. The way I see it, is that they will emerge stronger, because instead of following the rapid development route, where mistakes are made and costs overrun, they can take the well planned route and have an income source to support their investments. This also reduces their potential for future dilution.

In that respect, they will also likely excersize their right to buy back an additional 5% of the outstanding shares as they did in 2010, using the money they have from their last financing at $4.30. This is quite an effective use of that money considering the current SP.

I believe this has become a long term play, and will be much more stable in the future than it has in been in the past. I will be following the development of the EIA over the next 8 to 12 months and I think if the industry gets approval to go ahead, they will make a big jump. I may in time average down again if I have the free cash. Otherwise I will simply hold until further development occurs.

Fred
SDDL Insider
SDDL Insider

Posts : 125
Reputation : 5
Join date : 2010-07-01
Age : 36
Location : Sault Ste. Marie, On

View user profile http://northernskiesoutpost.wordpress.com/

Back to top Go down

Re: Questerre Energy

Post  Fred on Sat Sep 03, 2011 7:38 am

Additionally, two other long term and essential considerations:

1) the price of natural gas
2) the development of transmission infrastructure which is required to get their gas to market

Fred
SDDL Insider
SDDL Insider

Posts : 125
Reputation : 5
Join date : 2010-07-01
Age : 36
Location : Sault Ste. Marie, On

View user profile http://northernskiesoutpost.wordpress.com/

Back to top Go down

Re: Questerre Energy

Post  Sponsored content


Sponsored content


Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum