Zapata Energy Corp, ZCO.v C$3.16
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Posted: Thursday Mar 25 8:55:13AM 2010
ZCO.v +2.13 to C$7.30
Sold some to partially recoup costs. Nice pop from my buy price of $3.19. Will take awhile to get deal approved by shareholders and for new mgmt to implement changes in drilling and production. Initially they will likely reduce production of gas and lower overall production to around 2,000boepd from reported 2800boepd as of last PR.
This will minimize losses on gas production.
Going forward, this will be an oil focused company.
Posted: Thursday Mar 25 7:58:24AM 2010
New mgmt from Breaker Energy, they are injecting 17 million into Zapata and taking over!
Cash to drill, cash to buy. These guys are not putting up their own money to snooze! Should be positive for share price and shareholders. There is dilution but Zapata had a low share count anyway and now they have lots of cash to buy new prospective land or drill out their existing inventory.
Posted: Friday Mar 5 3:22:02PM 2010
Zapata has stated they have 2,719 hectares or 6,719 acres of prime Cardium land.
West Energy just got bought for their cardium land and the implied value of their land was $8700/acre.
Just on Cardium, Zapata is holding $58million in Cardium land.
Total market cap of ZCO.v is 79million so the rest of ZCO is being valued about 21million.
This is grossly undervalued for a profitable producer of 2700boepd. $40,000/boe is a traditional valuation. At that metric, Zapata is worth about 108million.
Add up 108 and 58 and you get a total potential value of $164million vs the current market cap of 79million.
Zapata seems to have a long way to go to reach full valuation. Success in their first Cardium well should give Zapata a big boost.
Posted: Sunday Dec 20 12:57:30AM 2009
Thanks for the perspective. I noticed that production had dropped in 2009 and they were just returning to 2900boepd but hope springs eternal! LOL! I also found some pretty disgruntled holders on stockhouse.
And I remember that Zapata has been at the bottom of the valuation on Iradesso for a long time. As you state, there are usually good reasons why an "undervalued" stock stays undervalued for long periods.
I think Zapata may start to attract attention from the reserve increases and production increases. The Cardium oil play is well known now and if they hit a few, they will attract some new buyers. Likewise if they hit a big liquid rich, ngas well with more land nearby, investors should take a second look.
Zapata has probably been conservative in their drill programs but being the ONLY profitable jr producer out of 58 companies should earn them some brownie points. In addition, they will likely have the cashflow to keep drilling, unlike some of their over indebted gassy compatriots.
I will hold my little pile of ZCO.v and see how they do in Q4 and Q1. I think both should be positive qtrs for ZCO. If the market yawns, I will have to reassess. Bobwins