Monday, March 17, 2014

Bullish analysis of Lynden Energy by Torrey Hills Capital

Torrey Hills Capital has issued a bullish analysis of Lynden Energy (click here).

Some of the positive statements:

"Lynden has stated that their intent here would be to basically sell the Company outright and spin out the remaining non-core Wolfberry land, i.e. the Mitchell Ranch land position"

"Our quick back of the envelope calculation... taking a conservative 45% discount... we would be looking at a share price of around $1.16 Canadian.  Bear in mind that we believe this is a conservative number based on a number of land sales we have seen in the area recently."

"The real kicker here is the Mitchell Ranch property, wherein Lynden owns a 50% position in roughly 67,000 contiguous acres with their JV partner Crownrock.  In addition, there is an additional 35,000 acres (50% Lynden's) which are very likely coming off lease to Chesapeake Energy on March 31, 2014 which is just 19 days away from putting Lynden's acreage ownership north of 50,000 acres in an area bordering the eastern edge of what many are now calling the most important oil asset in North America if not the entire globe."

"We have been hearing some rumors of very good, low cost production coming from the upper zones of the Wolfcamp just adjacent to Lynden's Spade 17 well... which could make this play comparable or even worth more than the acreage in the core Wolfberry play."

"We are getting the sense that the time is likely getting close wherein Lynden is going to pull the trigger on this land package (Wolfberry) and monetize it in a onetime sale."

Read the full article as its very bullish on Lynden's Wolfberry acreage and Mitchell Ranch potential.

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