QIS Update #13 2014 - April 25th 2014
Included in this update:
- Blackbird Energy and Pennant Energy finalize business combination, PEN shares delist
- Manado Gold closes first tranche of financing
- NTG Clarity Networks receives purchase orders for letters of intent
- QUATTRO Exploration and Production provides financial guidance, withdraws debenture offering
The Vancouver Small-Cap Conference will be held from 6pm to 9pm on May 7, 2014 at the Vancouver Convention Centre. Presenting companies this year come from a variety of industries including technology, telecommunications, oil and gas, mining, and more.
We are also pleased to announce that Fabrice Taylor, Publisher of The President’s Club Investment Letter, and a regular writer and guest for The Globe & Mail and BNN will be speaking at The Small-Cap Conference for the first time. We also welcome back Brent Todd, investment advisor from Canaccord, and Ryan Irvine, Editor at KeyStone Financial to provide us with an outlook on the markets and their top picks for the next year. As usual, we are also serving refreshments and have several door prizes to give away.
Admission is FREE with pre-registration. A registration form is available online at www.smallcapconference.ca/register.php. You can also register via email at email@example.com or by phone at 250-377-1182.
The complete schedule is now available for viewing on the website at www.smallcapconference.ca/vancouver0514.
Please feel free to email us anytime at firstname.lastname@example.org or call us at (250) 377-1182. We look forward to your comments, questions, and feedback.
Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.17 (coverage commenced Aug 19/11 - $0.18)
Pennant Energy Inc. (delisted April 21, 2014)
Current Price: Delisted (coverage commenced Dec 7/12 - $0.075)
Blackbird Energy Inc. and Pennant Energy Inc. have announced that they have closed a plan of arrangement whereby Pennant has become a wholly-owned subsidiary of Blackbird. The consolidated entity is expected to carry on business as an oil and liquids focused emerging producer and will continue to trade on the TSX Venture Exchange under the name Blackbird Energy Inc. and the trading symbol BBI. The common shares of Pennant will be voluntarily de-listed from the Exchange in connection with closing of this transaction effective April 21, 2014. Trading in the common shares of Pennant has been halted pending the delisting from the Exchange. In addition, Pennant will be applying to cease to be a reporting issuer in British Columbia and Alberta.
Blackbird and Pennant entered into an arrangement agreement dated February 17, 2014, whereby Blackbird acquired all of the outstanding shares of Pennant from the shareholders of Pennant in exchange for shares of Blackbird on the basis of one Pennant share for 0.42857 corresponding shares of Blackbird. The Transaction was structured as a plan of arrangement pursuant to the Business Corporations Act (British Columbia), and resulted in Pennant becoming a wholly-owned subsidiary of Blackbird.
The Transaction has been approved by the Pennant Shareholders, the Exchange and the Supreme Court of British Columbia.
Business of Blackbird
The consolidated Blackbird has assets in both Alberta and Saskatchewan as a result of closing of the Transaction which management believes will provide opportunities for drilling and leveraging capital efficiencies including, on a consolidated basis, a 50% working interest in the Bigstone Montney Project in Alberta, a 100% interest in the Mantario Project in the Mantario area of West Central Saskatchewan, a 100% interest in 21 sections in Greater Karr, Alberta and over 33 sections at Flaxcombe and Alsask, Saskatchewan. Completion of the Transaction is also expected to add approximately 60 boe/d of liquids-rich gas and oil production for Blackbird. Blackbird intends to continue to grow through appropriate acquisitions that are accretive on a per share basis.
Management of Blackbird believes that the consolidated company resulting from the Transaction has the following key attributes:
- a high quality, west central Saskatchewan and northwest Alberta focused asset base with strong netbacks and lower decline rates, providing the pro forma company with a sturdy platform of predictable cash flow as it makes its transition to a junior producer;
- high working interest properties which management believes have unrealized value;
- over 25 net sections of Montney land with current production of greater than 60 BOE/D;
- current corporate production of over 160 BOE/D;
- low decline assets;
- low general and administrative expenses allowing for funds to be deployed into value drivers such as drilling and accretive acquisitions; and
- 1.683 MMBOE of Proved plus Probable reserves with significant upside.(1)
(1) Company gross reserves being the pro forma company's working interest share before deduction of royalties and without including any royalty interests of Pennant. Based on the independent reserve report dated effective June 30, 2013, prepared by GLJ Petroleum Consultants, in accordance with NI 51-101 and the COGE Handbook.
Directors and Officers of Blackbird
Blackbird continues to be led by the management team and board of directors that were in place prior to completion of the Transaction. The Blackbird management team is led by Garth Braun as President and Chief Executive Officer, Darrell Denney as Chief Operating Officer, Ron Schmitz as Chief Financial Officer, Joshua Mann as Vice President, Business Development, and Ralph Allen as Vice President, Exploration. Additional information regarding the directors and officers of Blackbird is included in the Information Circular.
Capitalization of Blackbird
Upon closing, there were 186,816,684 common shares of Blackbird issued and outstanding on an undiluted basis, of which approximately 15.66% represents shares held by the former shareholders of Pennant. In addition to these shares, there are also stock options, warrants and convertible debentures outstanding. Complete details of the company’s capitalization upon closing are available in the information circular on SEDAR at www.sedar.com.
QIS Capital: Now that the business combination is complete, QIS Capital will be discontinuing coverage of Pennant Energy Inc. Coverage of Blackbird Energy will continue.
Manado Gold Corp. (MDO:TSX-V)
Current Price: $0.07 (coverage commenced Dec. 6/13 - $0.065)
Manado Gold Corp. has announced that it has closed the first tranche of its previously announced private placement financing (see news release dated March 27, 2014) by issuing 1,500,000 units at a price of $0.05 per unit for gross proceeds of $75,000.
Each unit consists of one common share of Manado and one share purchase warrant, with each warrant entitling the holder to acquire one additional share at a price of $0.06 per share until April 22, 2017.
The securities issued under the private placement will be subject to a hold period expiring on August 23, 2014 pursuant to applicable Canadian securities laws and the rules of the TSX Venture Exchange.
The proceeds of the private placement will be used for mineral exploration on Manado’s Takla-Rainbow Property and for working capital purposes.
QIS Capital: Manado Gold is closing its final tranche in the coming weeks. Anyone who is interested in the placement should contact QIS Capital as soon as possible.
NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.345 (coverage commenced Feb. 4/10 - $0.045)
NTG Clarity Networks Inc. has received the purchase order (PO) regarding the Letter of Intent announced March 27, 2014 for approximately $2.9 million Managed Services and Support. As mentioned previously, NTG has already commenced work on this PO and will bill the customer quarterly.
This $2.9 million PO will cover the operations, service and support of NTS Telecom in a Box and Partner Management Portal until January 2015.
NTG Clarity Networks Inc. has received the purchase order regarding the letter of intent announced March 12, 2014, for approximately $3.4 million for development resources. As mentioned previously, NTG has already commenced work on this purchase order and will submit the first invoice in the next few days. The remainder of the purchase order is expected to be completed by the end of June, 2014.
QIS Capital: Based on the number of calls and emails we received relating to the Letter of Intent announcements earlier in the year, management felt it would be prudent to announce when the Purchase Orders were received. This is normal course of business for NTG Clarity and the Purchase Orders allow the company to invoice for work completed. The company continues to negotiate on several new potential contracts.
QUATTRO Exploration and Production Ltd. (QXP:TSX-V)
Current Price: $0.90 (coverage commenced Mar. 24/14 - $0.32)
QUATTRO Exploration and Production Ltd. has announced April 28, 2014 as the anticipated date for the release of its audited financials for the year ended December 31, 2013.
The company is also pleased to confirm its previous guidance ofpro forma revenue for the year ended December 31, 2013, exceeding $14 million as previously projected.
Furthermore, Quattro's Board of Directors, in reviewing the company's performance and recent trading activity in the company's common shares, has also made the determination that the 3-year convertible debenture previously being offered with a yield of 8% interest per annum with the holder being granted the right to convert to Class A Common shares at $0.50 per share shall be withdrawn by the company rather than being re-priced in the context of the current market.
Current commodity prices for oil and gas and the resulting cash flow continues to provide Quattro a number of strategies to further enhance its business plan and we look forward to continuing to build on our organic growth goal of reaching production of 2,500 boe/d by year end 2014, said Leonard Van Betuw, President and CEO.
In addition, we are currently reviewing a number of options to further accelerate our plans. We look forward to providing guidance to the market once the Board has approved the appropriate course of action that supports the company's conservative approach to maintaining a strong balance sheet, while at the same time increasing growth and enhancing shareholder value.
QIS Capital: QUATTRO’s shares have performed extremely well since we commenced coverage one month ago. The stock is now nearing a 200% gain with financial numbers expected to be released next Monday. Management is forecasting $10 million in cash flow or $0.28 per share for this fiscal year.
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. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. 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 131,428 shares and 650,000 options of Blackbird Energy Inc., 246,000 shares and 200,000 warrants of Manado Cold Corp., 1,380,500 shares of NTG Clarity Networks Inc., and 47,000 shares and 300,000 warrants of QUATTRO Exploration and Production Ltd. QIS Capital may have a financial relationship with these companies 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.