Who said ‘buy and hold’ is dead? SmallCapPower.com takes a look at some Canadian companies that have rewarded patient investors that have held its shares over the past decade. Examining what has made these companies successful will hopefully help one find the next big winning stock for their portfolio.
BlackPearl Resources Inc. (TSX: PXX): 2,970.0% share price gusher
In late 2005, the former struggling resource junior Newmex Minerals Inc. acquired Pan-Global Energy Ltd. and its Onion Lakeheavy oil deposit in what turned out to be the first of a few transformative acquisitions for the company now known as BlackPearl Resources.
A year later, it purchased Atlas Energy Ltd. and its 5,800 boe/d of heavy oil production at Mooney, Alberta.
And on August 23, 2007, the company acquired a 35% working interest in 2,816 contiguous hectares of oil sands leases at Blackrodin the Athabasca Oil Sands region of northern Alberta for $5 million. By spring of 2010, BlackPearl owned 100% of Blackrod, which is now seen as the company’s ‘crown jewel’ with oil reserves of 182 million barrels and estimated contingent oil resources of 566 million barrels of crude.
From 2009 to 2010, BlackPearl’s cash flow from operations surged 116% to $62.6 million, while its proved plus probable reserves soared 496% to 213.3 million boe from 2011 to 2012.
Although about 85% of the company’s current production come from its Onion Lake and Mooney operations, Blackrod is what will likely boost BlackPearl’s fortunes and share price going forward. The project holds about 63% of the company’s oil reserves yet is currently only in the pilot phase, producing 211 barrels of crude daily.
Blackrod has yet to receive regulatory approval for commercial development, although BlackPearl is expecting this to happen sometime in 2014. And with the first stage of commercial operation expected to cost $800 million, the company has yet to find a partner to help finance and develop this project.
According to Motley Fool, an independent analysis of the total net present value of BlackPearl’s reserves is nearly $7 per share in addition to another $6 per share worth of contingent resources, representing substantial upside from the company’s current $2.15 share price. The investment website also sees BlackPearl Resources as a potential takeover target.
Read more top performing Canadian stock articles:
http://www.smallcappower.com/posts/article-top-performing-canadian-stocks-over-10-years-25-7-2014
http://www.smallcappower.com/posts/article-top-performing-canadian-stocks-over-10-years-18-7-2014
http://www.smallcappower.com/posts/aricle-top-performing-canadian-stocks-june-2014
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