QIS Capital - New Company Profile 2014 - March 24th 2014
Included in this update:
- QIS Capital Initiates Coverage of Quattro Exploration and Production Ltd. (QXP:TSX-V)
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Quattro Exploration and Production Ltd. (QXP:TSX-V)
Current Price: $0.32 (coverage commenced March 24/14 - $0.32)
We are very pleased to introduce QUATTRO Exploration and Production Ltd. as our latest QIS Featured Company. We are currently completing a full report on the company and will have this posted on our website later this week. We have provided a brief summary of QUATTRO and its operations below so that our investors can begin their due diligence process.
QUATTRO is an exploration and production company focused on growth in Western Canada and select international energy markets. The company completed a significant $7.8 million acquisition in November 2013 and now operates in three core regions with the latest reported production of approximately 1,100 boe/d. Management is forecasting that production will reach 1,250 boe/d (75% natural gas) during the first quarter of 2014. QUATTRO continues to work on further opportunities in order to achieve the company’s goal of exiting the first quarter with production of between 1,400 and 1,500 boe/d, putting Quattro on track towards its further goal of 2,000 boe/d by the beginning of the third quarter of 2014.
In Guatemala, QUATTRO has signed an agreement to acquire an exploration and exploitation contract consisting of ~320,000 acres of land in the North Petén Basin. During 2014, QUATTRO intends to continue its geological and geophysical studies to complement existing information and finalize the identification of offsetting drilling locations associated with under exploited fields in the Northern and Southern Petén Basin. Furthermore, QUATTRO continues discussions with a target currently producing 250 boe/d and with more than 80mm barrels of original oil in place.
QUATTRO is poised to post significantly higher revenues, cash flow and earnings for the third quarter ended December 31, 2013, based on the acquisition which was completed in November. Q3 results are expected to be announced in mid-April. It should also be pointed out that natural gas prices were still depressed when the acquisition was completed but have since increased significantly which will impact future financial results and the value of the purchased assets. The goal of the company is to generate 2014 cash flow in excess of $10 million while maintaining less than 1X net debt to cash flow. With 35 million shares currently outstanding (46 million fully-diluted), the forecasted $10 million cash flow would equate to $0.28 per share. QUATTRO’s shares are currently trading at just over 1 times expected cash flow. Furthermore, the enterprise value of the company, as supported by the independent engineered evaluation of the acquisition assets (NPV20%) of $33,046,000, is calculated to be approximately $50 million or $1.41 per share with book value per basic share of $0.98.
Disclaimer: This article is for informational purposes only. The information contained within this article should not be construed as offering investment advice. Those seeking direct investment advice should consult a qualified, registered, investment professional. The company profiled assumes no liability for the information presented. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. The author(s) owns directly or indirectly 40,000 shares of Quattro Exploration and Production Ltd. QIS Capital has an advertising agreement with Quattro Exploration and Production Ltd. and may trade in the stocks mentioned. No stock exchange has approved or disapproved of the information contained herein. Copyright © 2003 - 2014 QIS Capital Corporation.