Selling Non-Core Assets and a Private Placement Rewards Investors (PINK:PBKEF)

I have to admire the aggressive actions that management at PETROBAKKEN ENERGY LTD A (PINK:PBKEF) has taken recently and share valuation increases from new buyers and aggregators affirm that admiration.

PBKEF was trading in the $9.67 range on Dec 8 and was trading on Friday in the $15.50 range; a gain of 60.28% in ten weeks: Some very happy shareholders here. The Company currently has a market cap of $2.74 billion.

Canadian oil producer PetroBakken Energy has drilled and completed more than 650 horizontal wells with multi-stage fracture completions and has approximately 2,300 development drilling locations in southeast Saskatchewan, central Alberta; and in northeast British Columbia.

Late last fall there was a lot of anxious speculation about what the Company was going to do with a convertible debt put option that would come due in early February 2013 that would allow holders of $750 million of convertible bonds to force repayment, if they were so inclined.

So management acted…

First, after a bit of a false start on the amount, PBKEF on Jan 20 said it had closed a private placement offering of senior unsecured notes in an aggregate principal amount of $900 million, resulting in net proceeds to the Company of approximately $875 million. 

That tipped the scales in the Company’s favor 875 over 750, but management was very smart in its strategy and said on Feb 16 PetroBakken Energy entered into an agreement to sell certain non-core southeast Saskatchewan assets to Crescent Point Energy for gross cash proceeds of $427 million. 

And then in a move to reassure shareholders issued an $0.08 dividend for the month of Feb to be paid on March 15, 2012 to all PetroBakken shareholders of record on Feb 29, 2012. The ex-dividend date is February 27, 2012.

The gain in share valuation of 60.28% in ten weeks makes sense: Smart, Active, Leadership.  

I haven’t, don’t, and do not intend on holding any of the companies mentioned in this article.