Video Summary: Oil patch veteran makes a big Bakken bet

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Here is our YouTube video summary of the August 1st INK Morning report where Bruce Chernoff's big bet on PetroShale (PSH) is an early winner. We also drew on this morning report for the August 3rd Who is Buying and Selling feature in the GlobeandMail.

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Script:

It is not just the Canadian oil patch that has been taking it on the chin over the past year. North Dakota Bakken play stocks have also been on the slide. TSX Venture-listed PetroShale is an example. The stock is off about 60% over the past year. The company's operations are focused in the heart of the North Dakota Bakken/Three Forks play area.

The share price fall comes despite a production ramp-up. Petroshale produced an average of 5,036 barrels of oil equivalent per day (boe/d) with 84% liquids in Q1 2019, up 52% over the same period in 2018. Meanwhile, as of July 3rd the company was producing about 9,500 boe/d and expects to exit 2019 at approximately 11,000 boe/d.

Building up the current operations has taken a fair amount of cash. In Q1 PetroShale invested $44.6 million on drilling and completion activities which was more than double the $20.2 million of cash flow generated from operating activities. However, with production increasing there may well be pathway to reward investors with some cash.
In fact, the company already started to modestly buyback shares in the second quarter and more repurchases may be on the way More importantly, last week Executive Chairman Bruce Chernoff spent almost $1 million buying the stock a penny above its 52-week. That's already looking like a bargain. .

Our report which is not a recommendation to buy or sell securities is available through INKResearch.com or the Canadian Insider Club at CanadianInsider.com.  Good luck friends and thanks for listening!

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