# Marquee Energy(CVE:MQL)



## PMREdmonton (Apr 6, 2009)

I was wondering if any of you have been looking at Marquee Energy. This is a junior O&G producer with rapidly increasing production of crude oil this year. The stock seems to have been really beaten down recently for no obvious good reason to me. There was a recent acquisition of 550 000 shares by a VP (Sammy Yip) in the open market and there were also large acquisitions in the public market around 1.26 in January by the CEO (Richard Thompson).

They went from $550K CFO in 2010 to $9.1M this year for a company with a $36M market cap and $79M shareholder equity and a P/B of 0.5. Their production profile average for last year was about 54% natural gas and 46% oil and liquids at 2200 BOE/day but by the end of the year they were at 41% natural gas and 59% oil and liquids at 2570 BOE/day.

Next year they are targeting an average of 3100 BOE/day in 2012 with an exit rate of 3600 BOE/day and $36M of CFO.

So this company is producing cash flow from operations equivalent to their market capitalization.

They also have lots of acres to drill throughout Western Canada.

Any thoughts on this one?


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## indexxx (Oct 31, 2011)

I started a thread about MQL a short while ago. I bought a tranche at $1.29 and another at about $1.60- hoping for some good news on this one. There is a forum on Stockhouse about Marquee, and also Catch The Wind- you'd posted an answer to my CTW thread.


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## PMREdmonton (Apr 6, 2009)

Yes, I've seen the articles on Stockhouse, too.

The only thing about that site is they are usually a bit too gung ho to invest in these micro-caps without thinking about loss of capital. That's why I ask a bit around this board too.

One of the interesting things about this company is that there are 3 analysts following this stock according to G&M and they all rate it a strong buy. Compared to 1 year ago there were only 2 analysts following the company and both rated it a strong buy back then.

The stock is currently trading at 1-yr fwd PE of 7.3 (estimated EPS 2012 of 0.20) and 2-yr fwd PE of 2.2 (estimated EPS 2013 of 0.65) so although they haven't been profitable yet (12 cent loss in last fiscal quarter) they are expected to be profitable now. This is not unexpected in a micro oil and gas operation with the initial cap-ex to get the barrels flowing so I"m not worried about past lack of profitability here.

I also like to follow earnings revisions. In particular, I don't like earnings downward revisions. They have had a revision recently upwards of EPS for next fiscal year and the year after that so the profitability estimates are on the upswing.

The one downside and other thing I like to check on a stock is earnings surprises. I like to see positive surprises 75% of the time on earnings and the bigger the surprise the better. They missed on the last quarter for a 12 cents loss versus expected 1 cent profit. I think because their past production was very dry gassy they were crushed by the super-bear market in nat gas and thus missed estimates. I don't think they missed on the basis of execution too much because ramp up of production has been decent and they recently increased estimates for production for next year. The other thing I like about the company is they seemed to rapidly alter course in the face of the bear market in changing their production to more oil and liquids-rich plays once the severity of the nat gas bear became evident to everyone.

So I am interested if there are any others following it or buying it or alternatively if there are any who would suggest I stay away.


Lastly the other thing I often look for is analsy


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## PMREdmonton (Apr 6, 2009)

One other addendum is that we aren't too far away from their last bottom so I know that I'm not too far away from support where there was major insider buying from the CEO in January. The current stock price is 1.46 versus their lowest close in the past year of 1.15 so about 20% more possible downside. If you're going to invest in this space you have to accept the inherent volatility.

I'm thinking about putting in an order around 1.20 on Monday and seeing if I can catch it near the bottom but if it starts to go up I'll probably buy a tranche because it fundamentally looks so good. Of course that is one of the things that worries me - if it looks so good why is the market letting its PPS collapse again? It is something the insiders don't seem to fret over and it is something the analysts don't see to fret over but obviously the market has been very unhappy since it peaked on March 4 causing it to plummet from 2.27 to 1.46 or about 33%. The only major news I found is they bought out a micro E&P company near Lloydminster that had heavy oil assets close to their other properties and this resulted in some dilution and some debt acquisition but the fall in price was a few days after that announcement and was not particularly swift.


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## Shnoobs (Feb 28, 2012)

Owned it as Skywest years ago and have watched the price plummet as they amalgamate and switch gears to oil. Still own it, waiting patiently for some recognition. Haven't doubled down my position yet though as I'm waiting for them to break out of their slide. They keep making acquisitions and production & revenue has increased (4x) since 2010. They are making the right moves just have to weather the energy bears right now. Liked it then, like it now.


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