Cheap Energy, Buy Now
I was contacted a few months back by someone working for a company named Aroway Energy. (ARW-V) Someone or another asking me to look at a company contacts me on almost a daily basis but I found Aroway interesting, indeed, compelling. Iím going to offer my readers an opinion. Itís highly subjective, not objective, only time will tell the tale. I think Aroway is the best-run junior I have seen in ten years. Thatís across the board, energy and metals. They are that good.
First of all the facts, Aroway has 38.2 million shares outstanding with another 16 million warrants and 1.7 million options outstanding. As of last Friday, the market cap was $12.2 million. They produce 530 BOE daily in the Peace River Arch area of Northern Alberta. They expect to produce 600 BOE by the end of the year and are hoping for over 2000 BOE daily by end of 2012.
A BOE of production in Alberta today is worth $85,000 making 530 BOE worth $45 million in the marketplace or $1.18 a share. My subjective view is that there is no downside to the stock at $.32 in almost any kind of market.
But it wasnít buying stock worth in theory $1.18 for $.32 that attracted me the most. It was the quality of management and their execution of their business plan. Aroway, run by Chris Cooper, President and CEO is in a JV with a deep pocket private company in Alberta who supplies the technical knowhow.
Most of the time when a junior enters into a JV with a bigger company, the junior is putting up 2/3 to get 1/3. Aroway brought some high potential ground to the deal and most of the time is putting up 50% to get 50%. Iíve never heard of a junior doing that.
And the partner operates the drilling and production. All Aroway has to do is supply their portion of the money and cash the checks they get in return. I have seen that but usually it takes a President, a CEO, five VPs in charge of VPs and an expensive office with a handful of cute booth babes, all overpaid.
Chris is doing it with a minimum of staff. He is looking for a CFO, after all when you make a lot of money; you need someone to keep track of it.
I was knocked over by our phone call and by the constant progress since then. I think that when I first spoke with them, they were producing 300 BOE and were selling for $.30. Now they are producing 530 BOE and have rocketed two cents higher to $.32 and expect to do 600 BOE higher by the end of 2011.
Anyone who runs a company with any other intention than to make a profit is a dolt. Unfortunately dolts who want to do nothing more than to collect a big paycheck run over half the companies in Vancouver and Toronto. Aroway is investing money in future production, has entered into a JV with a great partner is continues to increase production. They are going to be a very profitable company.
Normally bigger companies donít even think about buying out a junior until they are over 1000 BOE a day, anything smaller just isnít worth their time. By the time Chris and ARW get to over 2000 BOE, they are going to start looking very attractive and I think it will be at a lot higher price.
When I heard the story, I went and bought a lot of shares on the open market. I love the story, I love the execution and Iím thrilled they contacted me in the first place. Aroway is an advertiser so I have a vested interest financially. I find the company very easy to communicate with and I highly encourage any potential investor to contact the company if you have any questions. As always, we donít share in your profit or your losses so you are solely responsible for your own investment decisions.
ARW-V $.32 (Sep 23, 2011)
ARWJF-PK 38.2 million shares
Aroway Energy website
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