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QIS Update #4 2013 - February 26th 2013

Included in this update:

  • Blackbird Energy successfully completes workover at Flaxcombe property
  • Dalmac Energy forecasts record revenues in fiscal 2013



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Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.055 (coverage commenced Aug 19/11 - $0.18)


Blackbird Energy Inc. has announced that it has completed the first Flaxcombe Sparky zone workover in its well, 22/16-13-29-27W3. The workover was completed on February 16, 2013 at a cost of only $45,000. Production commenced immediately upon completion of the workover with the well averaging 25 barrels of oil per day since that time. The successful workover of the Flaxcombe Sparky well has more than doubled production from the Flaxcombe Project to approximately 53 bopd.


The Flaxcombe Project is evolving into a core holding of Blackbird, comprised of three producing wells from the Sparky zone and several other wells which have been identified as near term workover candidates. In addition to the workovers the Blackbird team has identified two development oil drilling locations based on a 3D technical review.

Garth Braun, CEO of Blackbird stated, The Blackbird management team identified that the Flaxcombe Project offered tremendous value to the Company both through its development drilling and also through the implementation of low cost workovers and recompletion of wells that had been shut in or had been producing minimally. Blackbird has a very strong team in the field implementing these workovers on a cost effective basis and achieving excellent results. The Flaxcombe Project is the first acquisition by our new Blackbird team and we are very pleased with the incremental growth in the production to date.


Mr. Braun went on to state, Our Blackbird team is focused on diversifying its project mix with the addition of high quality oil projects in southwest Saskatchewan. We continue to focus on originating several high quality plays through the assembly of land positions.


QIS Capital:


The Flaxcombe project represents excellent low risk development and exploitation potential for Blackbird which will add conservative cash flow to the company’s already strong balance sheet. The company has been in the penalty box over the past year due to some disappointments in the Bigstone field, but after a strategic acquisition, a bolstering of the balance sheet, introduction of new management members, and the acquisition of a new strategic property, Blackbird is again starting to show growth and is working diligently to add shareholder value. Stay tune for more upcoming updates from the workover program.


Dalmac Energy Inc. (DAL:TSX-V)
Current Price: $0.50 (coverage commenced Nov 15/11 - $0.37)


John Babic, President and CEO of Dalmac Energy Inc. has recently provided revenue guidance and a corporate update to shareholders and investors. The third quarter is typically the company's busiest and this year has been no different. Dalmac is well on its way to again posting record revenues for the current fiscal year ending April 30, 2013 with sales expected to exceed $40 million.


Dalmac further reports that is has been successful in acquiring several new contracts, the largest of which is for a major North American producer which has committed to a specified number of Dalmac's truck fleet to be utilized on a 24-hour standby basis until spring break-up. This is a significant contract for Dalmac which can be expanded into further revenue opportunities with this top tier client.


The company has also taken delivery of a number of new trucks, trailers, pickers and other equipment as part of its previously reported $6.5 million equipment expansion. The equipment is fully booked upon service commencement. The remainder of the equipment, valued at approximately $3 million, is expected to be delivered by mid-February 2013.


Approximately 75% of the company's annual revenue is recurring work, i.e. fluid transfers and servicing of existing production, while the remaining 25% is contributed from drilling, fracing, completions and maintenance work for new and existing customers. The company has been actively overhauling its equipment inventory over the past few months as it ramps up its fleet to meet stringent operating parameters and increasing demand. While staffing levels and wage costs in the industry continue to be challenging, Dalmac is confident that current positive industry indicators, an expanded rental fleet, and recently booked equipment contracts will continue to translate into strong revenue growth through fiscal 2013 and well into fiscal 2014.


QIS Capital:


Dalmac appears to be well on track to achieve its 2013 record revenue guidance of $40 million. The company is expected to release its Q3 results by mid-March.


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 351,500 shares and 450,000 options of Blackbird Energy Inc. and 63,500 shares and 200,000 options of Dalmac Energy Inc. 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 - 2013 QIS Capital Corporation.

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