CWV.V - Crown Point Energy

Crown Point Energy Inc. (TSX-V:CWV) is a Calgary-based junior international oil and gas company with cash flow from production and a portfolio of additional opportunities in two of the largest producing basins in Argentina: the Austral basin in the province of Tierra del Fuego and the Neuquén basin in Neuquén and Mendoza provinces.

 

Is anyone else interested in this company? It's a small Canadian company that appears to be trying to become a large Canadian company.

It has an 8.5% distribution, sustainable books, and big aspirations.

I'm not big on oil, as I expect the market to start shrinking in the next few years, but there is still a ton of money to be made in this industry.

 

When I picked up a tiny quantity of this stock, the market cap was $33M and the annual revenue was $48.7M. They had 70% of the market cap in cash.

Now it's up at $0.61. Market cap of $44.5M.

It's going to be a wild ride but this stock is entertainment to me.

 

There have been a few things that CEO Brian Moss has done that I appreciate. These are signs that CWV will be run more professionally. If Brian Moss turns out to be a good man and if he can get the low grade corruption under control, this low debt, high potential, company could turn out to be a rocket ship. They show signs of future greatness.

I'm taking a chance as part of an initiative to take more risk.

With a dividend of $0.04 per year and an entry point of $0.46, this company shows potential. I think they can comfortably bump the distribution up to $0.06 per year and this is what I'm expecting. That will insure my equity remains strong.

When I bought this stock, I placed a long term limit order at $0.46 for a small monetary amount. It partial filled after a few weeks and I cancelled the rest of the order after about 6 weeks. Suffice to say, this is a play toy for us.

So far, we have received 0.0350 in distributions after a few months of ownership.

 

For 25 years, this was a very poorly run company. Producing a terrible financial result while nearly everyone else in the industry was booming was not caused by 25 years of bad luck. In 2016, Brian Moss took over as CEO and it appears things are operating much more competently.

There's not much more to share on this. I have a system which involves looking for certain things in the books to judge management behavior. It's not absolute, to say the least, but there are some red flags I look for. Those red flags have gone away.

If management is good, and that's a big "if", the business will do well. I like the business; even with oil and gas not being the boom industry it used to be. At the current valuation, the earnings are roughly equal to the market cap. That's not common in any industry.

 

This stock opened at $0.81 this morning.

They have presented their board with a request for a return of capital of $0.185 per share.

 

Well, that was nice.....

Two years. Two returns of capital. This year was a small one.

$0.185 per share that cost me $0.46.

The volume is up, after the RoC, so I assume that means a bunch of people were holding this exclusively for the RoC.

I believe this company is being run by a cowboy. $40M market cap, at $0.55. $1M of debt.

I don't know CWV management like I know many of my other holdings but CWV management seems to fit the profile of an old school oil baron. Reduce costs. Low to no debt. Drive output like a war time operation.

At this point, I have literally gotten all of my investment back plus a bit in just over a year. This stock doesn't drip. I'm going to hang in there with CWV for a while and see what happens.

 

I was pretty sure this stock would tank after the return of capital. Two years in a row. This was a small one and they returned $0.18 on a stock that traded in the mid 40 region a couple of months ago.

The stock is still at $0.62.

I'd like to bulk up on this stock and a couple of other oil stocks but I'm going to wait until oil goes down in value and people panic sell oil stocks.

 

The price has come back down to $0.49. It's getting interesting again.

 

I got out at $0.48. I can expand on why but I doubt anyone else is interested in this stock.

My total gain was $1200.

These sort of stocks are a distraction but make for good entertainment.

 

They sold some assets. In 2019, it was the San Martin oil field.