Antares Energy (AZZ) - US gas + cash

[OneUp]

Antares Energy (AZZ)

Bit too flat tack right now to do anymore than give a brief outline and invite comment:

(1) AZZ has a market cap of a shade under $100m.
(2) They have net cash and receivables of over $70m, $54m of which comes from the recent sale of their Turkish assets.
(3) AZZ have valuable gas producing and exploration projects in the USA, where gas prices have doubled in recent months and supply is expected to remain tight for the forseeable future.
(4) Share buy back under way.
(5) Very strong insider buying.

Seems like a very safe investment, with considerable upside: management aim to turn AZZ into a company with a market cap of $500m (up 400%) within 2 years by expanding gas production in the US.

Thanks to Lizard for bringing this one to my attention. I bought some today.

Apologies to Yogi for not posting in his thread, but I am after fundamental analysis, not astrology.

[JBmurc]

great mid-long term holding oneup brought a lot at 44c a couple months back,is my largest holding in my portfilo very confident there company growth pospects will happen over the next couple years ,just check out the US gas price.

$1 sp is only months away.

others worth a look -STX
NWE
EPR
PSA
ADI

[nelehdine]

Check out AMU ... by far and away my largest holding. Great mgmt, great acreage, Oil prod up 120% in the next 12mths min ... Gas prod up 375% min next 12 minths !!! Ka-Chingo !!!

[OneUp]

Hi Nelly, just had a quick squiz at AMU and haven't got the whole picture, but they seem to have a fair amount of debt. AZZ with its enormous net cash position and cost concious approach to projects would seem to have somewhat less risk, as well as not needing to issue new equity (or be beholden to their bankers) to pursue projects. Thanks for the tip anyway, will have a further look at AMU when I get the time.

[nelehdine]

AMU have just spent US$100m in the last few weeks on 3 seperate acquisitions. Cash on a companies balance sheet is just plain STUPID. Make absolutely NO financial sense what-so-ever, especially for a producing oiler. BHP and RIO carry Billions and Billions in debt, why shouldn't the smaller companies on a smaller scale. AMU have just put some collar hedging strategies in place ( $52 and $90 for oil & $8 and $20 for gas ) Their banker, Wells Fargo are extremely comfortable with their levels of debt, so am I. Agressive quality management and strategy is one of the things that attracted me to invest in Amadeus ... no interest in lazy cash hoarding management !!

By the way ... shares up to 122 today, over 10% rise since I tipped them to you 2 days ago !!!

[OneUp]

Nelly, in the week since your posting on AMU it's fallen from $1.20 to $1.06 (-12%). AZZ has fallen a more modest 5.7%. AMU will probably outperform AZZ on the upside, but I like AZZ as a [u]low risk</u> exposure to US gas. To each his own.

The absolute floor on AZZ is the cash backing, which is not far south of its current share price. Should add that AZZ only got the cash windfall from the Turkish sale a couple of months ago, and contrary to the inference that they'll just be sitting on a cash mountain twiddling their thumbs the sale was intended to allow the funding of US activities without having to go into substantial debt. Management is looking at the best ways to make use of shareholder funds, seeing as they are shareholders themselves.

[nelehdine]

Yep AMU have had a tough week ... not the best week to be having an SPP at $1 ... falling oil, falling Dow, falling All Ords ...

[kura]

One up, doubt if you will get your ten bags out of AZZ, whereas my initial AMU purchase (approx 3 years ago) cost me 9 cents, several times in those 3 years I said to myself "Surely they can't keep going up" (but they did)

About the same time as purchasing AMU for 9 cents I got some AZZ (known then as AYO) for approx 50 cents.

While both are now in the same "patch" AZZ are the new boys in town, whereas AMU have the proven management & technical expertise to grow the company. I know which one I would prefer to invest in.

[OneUp]

Kura, not looking for 10 bags from AZZ mate. 50% in 6 months will be par for the course, with very little downside risk.

For both AZZ and AMU, I note that some analysts argue gas prices are currently far too cheap and expect them to rise significantly over the winter. One of the main reasons cited for the recent market drop is fears of inflation....but US inflation is largely being driven by rising gas prices...which is all good for producers & explorers.

Did a search on AMU on sharetrader and no one's really given a comprehensive analysis of why it's good looking forward. Any ideas how much $ it will make this year? (yes I'm being lazy )

[kura]

Sorry One Up, when it comes to being lazy, I think I beat you, (Don't know) I do however subscribe to a share newsletter (Stock Analysis Peter Strachan) and I have learnt to respect his opinions, think the last comment he made about AZZ was "fairly priced" (ie no great bargain) Unfortunately he has not opined regards AMU recently (and recent AMU asset purchases kind of significantly affect the company fundamentals)

PS: Peter Strachan took over the newsletter "Quentin Camerons Oil & Gas Bulletin" this bulletin was what I originally subscribed to, Quentin Cameron retired a few years ago (in his 70's with failing eyesight) in one of the last of his bulletins, Quentin Cameron recommended AMU at 9 cents, and thought they had potential to get to $1 (Thank you Quentin !)