Alberta Oil - - JUNIORS -

If you wanted a tem­plate for the per­fect ju­nior oil pro­ducer, it would be hard to do bet­ter than Rag­ing River Ex­plo­ration. To be a truly ex­cep­tional com­pany, there are three key el­e­ments the com­pany must have: Great as­sets; a rock-solid bal­ance sheet; and, most im­por­tantly, a proven man­age­ment team. Rag­ing River has all three and then some.

Rag­ing River’s CEO, Neil Roszell, is a se­rial en­tre­pre­neur. Cre­at­ing value for share­hold­ers seems to be in his DNA. That value cre­ation can also be tied to the fact that Roszell is a sig­nif­i­cant share­holder in the com­pa­nies that he builds. If you want re­sults, you need to have the proper in­cen­tives.

Prior to form­ing Rag­ing River, Roszell built and sold Wild River Re­sources, which was fo­cused on the Shau­navon for­ma­tion in Saskatchewan, to Cres­cent Point En­ergy. He must have enjoyed the ex­pe­ri­ence, as he did ex­actly the same thing with a sec­ond com­pany called Wild Stream Ex­plo­ration in the same play, to the same ac­quirer.

While some com­pa­nies have dis­ap­peared and most com­pa­nies are strug­gling, Rag­ing River has stood up very well through this oil crash, both in its stock price and op­er­a­tionally. An ar­gu­ment could be made that the com­pany will ac­tu­ally ben­e­fit from this oil crash over the long run given the ac­qui­si­tions it has been able to make be­cause of it. Rag­ing River has been able to do this be­cause it went into the crash with one of the best bal­ance sheets in the in­dus­try. It’s al­most as if Roszell was aware that the oil busi­ness is a cycli­cal one, and built a bal­ance sheet to with­stand it.

An­other key for Rag­ing River is that it re­mains fo­cused ex­clu­sively on the Vik­ing light oil play which is a per­fect fit for a ju­nior pro­ducer. The Vik­ing’s shal­low set­ting al­lows for low-cost drilling, fast pay­outs and top-tier eco­nom­ics. The com­pany has 4,000 fu­ture drilling lo­ca­tions, which should keep it go­ing for an­other 16 years with ma­jor up­side com­ing from wa­ter­flood­ing.


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