Lynden Ventures (LVL-TSXV)
[Markus has been succesfully investing for over 5 years. He will be writing here occasionally about what he's investing in. I think you will enjoy his contributions here.]
Lynden Ventures (LVL-TSXV)
Shares Issued and Outstanding – 14.5M
Fully Diluted – 19.9M
Cash on Hand – $3.0M CDN
Lynden has lined up a proven finance, technical, management and promotional team. They have assembled a good sized land package in Utah and Colorado prospective for conventional and unconventional oil and gas. This is a very proven area with millions of barrels of oil and gas produced over the years.
People
The Company has been financed through non-brokered private placement led by some powerful brokers at Haywood Securities. There have been very strong deals coming out of that office lately including, PetroBank ($14.00) Paladin Resources ($3.50) and Storm Cat Energy ($6.00 pre-split) raising well over $75M combined for the respective deals. They are also well connected to some of the more powerful newsletter writers in the resource market.
I understand Richard Andrews is the main driver to close the deals and spin the promotional wheel. My public searches on him show that he was very involved in Canadian Spirit Resources (70 cents to $6.00 in 2005) Silver Standard Resources ($17.00) and even Western Silver ($22.00). He is very capable industry player and has a natural promoting ability that is evidenced through his track record.
Projects
Lynden has two projects but I believe the unconventional play will be the main driver. Unconventional gas (read shale gas) plays in the market have been hot ie. Bankers Petroleum (BNK-TSX) and Pacific Asia China Energy (PCE-TSXV)
Another unconventional gas play that has a beautiful chart is Southwestern Energy Company (SWN-NYSE) trading at $30 per share. It transformed a large shale gas play in Oklahoma into a big natural gas producer. It was a mere $2 three years ago! Cleary, technology advances have allowed have created a lot of opportunity for projects to become commercially viable.
Lynden will be drilling three holes into the shale at the Paradox Basin in the western US very soon. Shale gas plays have huge, fairly uniform formations, which means that if you hit one well you can have some confidence that the entire formation will be productive. That is why these plays can get what appears to be huge premiums to their reserve base – the market is willing to pay in advance for the likelihood of many more wells being winners as well.
Conclusion:
I like natural gas stocks right now. Natural gas prices are low, and the one sided pessimism screams bottom to me. Look at what NG did last year at this chart.
http://www.energystox.com/charts/default.asp?ChartType=metals&focus=8388608&mode=1%2DYear
Lynden is well structured, well financed and well lubricated with management, technical and promotional ability with a track record studded with success.
Be aware of two financing issues right now: 1) They are closing a $2.25M financing @ $0.75 cents and 2) The last $0.75 financing becomes free trading on Monday March 26, (I own some of this one).
The company’s stock is very illiquid right now, and I’m hoping that with the first round of $0.75 financing free trading on Monday there will be increased liquidity for the hungry buyers out there.
This team is very capable and the structure on the public company could allow some good leverage as the story gets told. Hopefully sooner than later.
Do your own due diligence of course:
Lynden Ventures
3rd Floor, 157 Alexander Street
Vancouver, British Columbia
V6A 1B8
Phone: 604 629-2991
Fax: 604 602-9311