This Western Canada oil producer is a low-priced stock, so will most likely prove fairly volatile. It has some interesting prospects, and some new catalysts that look promising.
Obsidian Energy (OBE.TO)
From Contra the Heard Investment Letter
Obsidian has been making tremendous progress. First, the recent settlement with the SEC for $8.5 million puts that soap opera to rest. Second, FrontFour Capital has recently purchased more than 5% of the shares. Leading this charge is Zachary George, who just so happens to be the son of the former CEO. Interesting indeed. Third, Gordon Ritchie joined the board last week. He is a bigwig in the banking sector and will likely have many helpful contacts in the industry. This should prove quite beneficial going forward, and it is positive that he feels that this is a worthwhile organization with whom to sign up.
We perceive that since CEO David French sold the previous organization he headed—Bankers Petroleum—at a significant premium, that might become the endgame for OBE. If that does come to pass, it would likely be at well over the price it trades at now.
Management indicates that they expect double-digit growth in production in 2018, with more in store in future years. One would expect that to improve the bottom line. If all goes according to plan, at some point this stock could trade above $10.
Benj Gallander, Contra the Heard Investment Letter, gall@pathcom.com, www.contratheheard.com, 416-410-4431