Prairie Provident – exploration in Canada’s largest oil producing provinces
By: Galit Solomon
Company: Prairie Provident Resources, TSV: PPR
President & CEO: Tim Granger
Headquarters: Calgary, Alberta, Canada
Number of locations: 3 primary (Evi, Michichi and Princess) 3 secondary
In current role: 6 years
Prior job: President and CEO, Molopo Energy Limited
The energy sector – it’s one of the world’s most volatile sectors. Prairie Provident Resources (PPR) President and CEO, Tim Granger, will tell you, “it is not for the faint of heart.” But he says there is a silver lining when it comes to his company. “Although we are a small junior, we have a very low decline rate, about 18 per cent which is above average. That translates into free cashflow. We can have a development strategy where we can grow in the high teens to 20% on our internal cash flow should we choose. And we do have some great development opportunities in front of us.”
PPR is based out of Calgary with three primary locations: the Wheatland and Princess properties in Southern Alberta and the Evi area located in the Peace River Arch of Northern Alberta. “Our company is engaged in the exploration and development of oil and natural gas with conventional operations primarily focused in the Western Canadian Sedimentary Basin.”
As a leader, Granger brings with him three decades of oil and gas industry experience. “I am a professional engineer. Prior to joining Prairie Provident, I served as a senior executive of various local and International Exploration & Production companies. The combination of formal training as well as my hands-on experience benefit me daily in assessing the optimal development for certain plays based on reservoir characteristics and project economics.”
In 2019, PPR plans on modest improvements to its balance sheet with a capital investment plan that will underspend available free cash. Granger adds, “Under this plan, the corporation will have a generally flat production profile and focus on reducing operational cost and corporate obligations. Should the commodity prices continue to gain strength the organization can react quickly and we can increase our development plans.”
PPR remains focused on its long-term goal of growth via accretive mergers and acquisitions which, Granger says, will improve overall efficiencies and offer the investor an organization with improved scale and stability. “In addition, we are hopeful we will soon receive a positive ruling with respect to our NAFTA claim which in turn would have a positive impact on our balance sheet.”
According to Granger, investors should consider PPR at this time because it is well positioned to grow and profit from the next oil & gas up cycle. Granger says PPR will continue to demonstrate the value of its asset portfolio. “In this uncertain period for commodity prices, we will focus on cost reductions, specifically as it relates to our production metrics. We will manage our production to maintain a relatively stable annual rate and protect our balance sheet.” Granger says PPR is ready to move forward with a more aggressive growth profile when commodity prices rally.
In summarizing, Granger cites three reasons that investors should consider purchasing PPR stock now:
1. PPR is significantly undervalued with respect to reserves and trading multiples relative to our peers. (please show specific numbers here)
2. Our stock is a robust, liquids-focused asset base with significant development potential and long running room.
3. Potential positive resolution to NAFTA claim.