Prospera Energy: Small-cap Worth a BIG BET (Investment Thesis Overview)
Bill Powers (Mining Stock Education) and Shubham Garg (White Tundra Investments) each placed big bets on Prospera Energy (TSX.V: PEI, OTC: GXRFF, FRA: OF6B). They did so independently of each other but come together in this show to share why they are bullish on the company. Neither Bill nor Shubham has received compensation from Prospera. Both are investors in the company. Shubham will be a strategic partner for both engineering support and business development initiatives moving forward.
Listen to CEO Samuel David and VP Finance Chris Ludtke explain Prospera Energy’s investment thesis in this episode. For the past two years Prospera has been in restructuring as legacy debts and non-compliances have been largely resolved. During this period, the team has grown production from 80 bpd to 1,250 boepd and reduced production costs from C$60/barrel to under C$40/barrel. They believe that in the next 2-3 years they can reduce production costs to possibly under C$20/barrel and achieve 10,000+ boepd by optimizing current assets and through strategic acquisitions. The company has about 400 million barrels of oil in place. And Prospera’s core assets in Saskatchewan and Alberta had previously, during peak oil times when they were being fully developed by multinational oil companies, already saw production of over 10,000 boepd. The company has the facilities to accommodate over 10,000 boepd.
0:00 Introduction
1:23 Why Bill invested in $PEI.v
3:29 Why Samuel David took on Prospera’s restructuring
6:11 Why Samuel chose restructuring rather than bankruptcy
11:04 Lacey and Richardson families financed restructuring
13:00 Shubham Garg & White Tundra are strategic partners
19:07 Shubham’s $PEI.v blue sky price targets
22:44 Prospera optimizing and lower production costs
24:21 Role of hedging production?
25:25 Significant increase in 2P reserves & reserve life index
28:26 Analogue company for Prospera?
29:23 Horizontal drilling program
33:19 Prospera’s partnership with Aduro Clean Tech to transform heavy oil into higher-value fuels
34:23 Enhanced Oil Recovery Techniques
36:06 10,000+boepd target in 2-3yrs is very doable
37:42 Sunk and replacement costs for Prospera’s facilities
39:42 Shubham’s commentary on PEI’s share structure
41:18 Shubham: “The company has achieved escape velocity”
43:09 Shubham: “New wells are being managed well”
44:31 Shubham: Many ways to increase production
47:19 Final thoughts
