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 Pyramid Petroleum (PYR.v) & ( C$1.09

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Junior Member
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Number of posts : 25
Registration date : 2008-06-10

PostSubject: very cheap   Thu Jul 31, 2008 11:14 pm

PYR.v is way too cheap. Made .05eps in Q1 with .12 cashflow. Selling for a forward annualized p/e of 4 at the current price of C$.81. I bought more today.

Drilling program about to get underway in the Gulf of Mexico and workovers will be done this summer also. Guidance is for an increase from 1300boepd to 3000boepd by 12/08.

Recent selloff in energy is overdone. Pyramid will be able to internally finance their summer drilling/workover program. Minimize dilution and significantly increase production and cashflow. Price to cashflow should be well below 1 by year end.

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Junior Member
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Number of posts : 25
Registration date : 2008-06-10

PostSubject: Pyramid Petroleum (PYR.v) & ( C$1.09   Wed Jun 11, 2008 9:48 pm

Pyramid Petroleum is a rapidly growing Canadian junior. They have purchased assets from insiders and currently are producing about 1300boepd. They are projecting rapid increases thru the year end and are targetting an exit rate of 3,000boepd for 12/08.

They own numerous assets in the Gulf of Mexico and Canada. They recently announced that they are selling their land based wells in Canada and Montana for 6.3million. They purchased these same assets from an insider for an estimated 10million in 2006 so I expect a large loss in the qtr when the sale closes. They are losing 110boepd in production but have agreed to buy 45boepd from the company that is buying their land wells. The 45boepd is in the Gulf of Mexico and includes some exploratory property.

With the sale, PYR.v has focused strictly on the GOM. They have experience and connections in the Gulf. They are starting a 4 well drilling program in the shallow Gulf this summer, with the first well to be spud in July. They expect to add 800boepd to production from the 4 well program.

Today they announced another piece of the plan to increase production. They are going to workover 2 existing wells and then a further 6 wells after the first two are done. They expect to gain a net 450boepd from the total program.

The company presentation is very good and shows their aggressive plans. They plan to list on the TSX and AMEX. They also hope to obtain equity financing of 25 to 50 million and bank debt of 25 million within the next 12 months. Obviously they plan to acquire more GOM drilling properties.

Pyramid cashflowed .12 for Q1 vs a share price just over $1. That means a forward annualized price to cashflow ratio of 2. If they hit 3000boepd by 12/08, they will be ridiculously cheap.

On the downside, I mentioned the loss when they close the sale of their Canadian and Montana assets. They also need to get financing for the drilling program and the big financing they want. So there could be signficant dilution in the next 12 months. Depending on what assets they acquire, it could be dilutive or accretive, we don't know. However they seem to have been pretty careful so far and so it's unlikely they will do a deal that reflects poorly on the share price. They have about 37 million fully diluted shares.

I like the aggressive game plan and the good cashflow. This is a very cheap stock with significant upside.

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Pyramid Petroleum (PYR.v) & ( C$1.09
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