Oilsands Quest Inc. (AMEX: BQI)
Oilsands Quest Inc. (BQI), a development stage company, engages in the acquisition, exploration and development of a variety of projects in the oil and gas sector and in particular the oil sands and oil shale sectors in Western Canada. The Company is aggressively exploring Canada’s largest holding of contiguous oil sands permits and licenses. Operating in Saskatchewan’s first global-scale oil sands discovery, BQI is leading the establishment of the Canadian province’s emerging oil sands industry.
Over the coming months, the Company plans to continue the activities necessary to increase its resource base and to demonstrate the recoverability of its oils sands resources. The Company looks to continue to pursue exploration programs on its permit and license lands, subject to its financial resources.
BQI was founded in 1998 and is based in Calgary, Canada.
| Share Statistics
(15-Oct-09) |
|
2008 |
2009 |
% Chg |
Q1 ‘09 |
Q1 ‘10 |
% Chg |
|
| Symbol |
BQI |
Revenue, $Mn |
0.0 |
0.0 |
N/A |
0.0 |
0.0 |
N/A |
| Current price |
$1.32 |
Gross marg. |
– |
– |
– |
– |
– |
– |
| 52wk Range: |
0.59-2.00 |
Oper. margin |
– |
– |
– |
– |
– |
– |
| Avg Vol (3m): |
2,609,830 |
Net margin |
– |
– |
– |
– |
– |
– |
| Market Cap. |
399.17M |
|
|
|
|
|
|
|
| Dil. Shares Outst. |
277.36M |
EPS, $ |
-0.401 |
-0.340 |
-15.21% |
-0.056 |
-0.006 |
-89.29% |
Source: Reuters.com, SEC Filings, FY ending April
Financial Summary
BQI, together with its subsidiaries, is in the exploration and development stage and does not currently have any income from operating activities.
As disclosed in its recent 10-Q regulatory filing, the Company spent $4.4 million on operations and $0.4 million on property and equipment during the three months ended July 31, 2009.
For the three months ended July 31, 2009, the Company posted net loss of $1.9 million, or $0.01 per share, versus net loss of $14.1 million, or $0.06 per share, for the three months ended July 31, 2008. The decline is attributable to a reduction in exploration activity and costs in the current quarter as compared to the same quarter last year. Exploration costs for the same quarterly period were $3.6 million, versus the year-ago quarter’s $10.5 million
As of September 1, 2009, BQI’s cash, cash equivalents and short-term investments totaled $53.6 million. The Company believes it has sufficient funds to carry out its planned activities over the next 12 months.
Financial Strength
| Company | Industry | Sector | S&P 500 | |
| Quick Ratio (MRQ) | 8.26 | 1.20 | 1.04 | 0.78 |
| Current Ratio (MRQ) | 8.26 | 1.21 | 1.12 | 0.93 |
| LT Debt to Equity (MRQ) | 0.00 | 0.71 | 14.50 | 151.05 |
| Total Debt to Equity (MRQ) | 0.00 | 1.38 | 19.97 | 235.00 |
| Interest Coverage (TTM) | – | 0.05 | 0.79 | 23.96 |
Source: Reuters.com
Analyst Consensus
| Buy | Outperform | Hold | Underperform | Sell | No Opinion |
This is the consensus forecast among 1 polled investment analysts.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 1 | 0 | 0 | 0 | 0 | 0 |
| 4 weeks ago | 1 | 0 | 0 | 0 | 0 | 0 |
| 2 months ago | 2 | 0 | 0 | 0 | 1 | 0 |
| 3 months ago | 2 | 0 | 0 | 0 | 2 | 0 |
| Last year | 1 | 0 | 1 | 0 | 0 | 1 |
Source: FinancialTimes.com
Investment Highlights
BQI focused primarily on business opportunities in the oil and gas sector and in particular the oil sands and oil shale sectors in Western Canada. The Company is exploring Canada’s largest holding of contiguous oil sands permits and licenses, located in Saskatchewan and Alberta, and developing Saskatchewan’s first global-scale oil sands discovery.
The Company’s Saskatchewan Oil Sands project extends the boundaries of commercially viable deposits of the Athabasca Oil Sands. The Alberta Oil Sands project covers 112,598 acres of the Company’s total contiguous oil sands holdings of 730,598 acres in Saskatchewan and Alberta. Additionally, BQI has oil shale exploration permits covering 489,730 acres (198,187 hectares) in the Pasquia Hills area of east-central Saskatchewan. These permits provide for the right to explore, mine, quarry and work the permit lands, but not to produce or recover oil shales except for test purposes until a lease has been granted.
As disclosed in its Form 10-K for fiscal 2009 ended April 30, 2009, BQI’s exploration activities included: exploration drilling program of 57 delineation test wells on its permit lands in Saskatchewan and Alberta; advancement of its pre-commercialization evaluation studies on and reservoir test program on its Axe Lake Discovery; a comprehensive 2-D and 3-D seismic program in Saskatchewan and on adjacent Alberta permits; and an extensive environmental program consisting of monitoring and baseline assessment studies. To fund these activities, as well as its future programs, the Company stated that it raised $144.4 million, net of issuance costs, through private placement share issuances, a marketed public offering and proceeds of warrant and option exercises.
In its recent quarterly report, the Company said it is focused on developing its 2009-2010 oil sands exploration plans for the Axe Lake, Raven Ridge, Wallace Creek and Eagles Nest areas, as well as its oil shale exploration plans for the Pasquia Hills area. These planning activities included scouting seismic and exploration drilling targets, preparing regulatory applications and initiating consultation processes for approval of the winter drilling program.
For its Axe Lake plan, the Company mentioned an overburden core drilling program on permits 208 and 210 and 2-D seismic on the permits to the north and south of Axe Lake in Saskatchewan, both of which are expected to further the Company’s geological knowledge of the deposits while meeting work commitments required to extend the exploration permits until May 31, 2010.
In other quarterly developments, the Company resumed construction activities at Test Site 1 in preparation for the startup of phase I of the testing; began applying heat to the reservoir at Test Site 3 in late 2008 utilizing a downhole electric heater and continues to measure pressures and temperatures at 10 different locations in the reservoir subsequent to the removal of the heater element in June 2009; commenced pressure and temperature measurements at Test Site 1 in order to capture the baseline reservoir pressure and temperature before commencing the vertical well test program; and provided an update of its progress at Test Sites 1 and 3 and laboratory and field test studies at the TD Newcrest Unconventional Oil Forum held in Calgary on July 8, 2009, and at the Canadian International Petroleum Conference held in Calgary on June 16 to 18, 2009. The Company also disclosed its intention to re-organize its non-core assets at Pasquia Hills.
Moving its exploration programs forward, the Company expects to continue the activities necessary to increase its resource base and to demonstrate the recoverability of its oil sands resources, and believes it has sufficient funds to carry out the planned activities over the next twelve months. As for its Axe Lake or any of its other prospects, the Company expects to see increase in cash requirements alongside accelerated commercial development. However, the Company is confident that it will have access to sufficient funding and sources of capital for its planned activities through to July 31, 2010, thanks to its constant and active monitoring of its expenditure budgets.
Market Outlook
Market reports indicate rising awareness of oil sands’ potential as a viable energy source, thanks to new extraction technologies, which enable them to be profitably extract and upgrad to usable products. This is on top the rising energy prices, coupled with robust energy demand. Last year, the demand for oil sands was expected to reach 10.31 million bbl, up from 8.59 million barrels in 2003 at an average annual growth rate (AAGR) of 3.7%, as reported by ResearchandMarkets.
China, with its ever increasing energy demand, already took the lead in investing in oil sands. Last month, PetroChina (PTR), one of the country’s largest state owned oil companies, invested nearly $2 billion in Alberta Oil Sands, giving the country a 60% stake in two undeveloped, small oil sands projects in Northern Alberta.
Technical Analysis
Source: http://stockcharts.com/h-sc/ui
On October 13, 2009, BQI closed at $1.40, 30.00% below its 52-week high of $2.00, set on October 20, 2008.
Moving Average
BQI is trading above its 13-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.
MACD
The MACD for BQI currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.
Bollinger Bands
BQI’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, BQI is trading near its upper Bollinger Band. This suggests that the stock price is high relative to its recent price action.
Source: http://www.scottrade.com
Comparative Analysis
BQI operates in the Oil Sands sector dominated by a few large cap companies such as Canadian Natural Resources (CNQ), with a market capitalization of $39.28 billion, and Suncor Energy (SU), with a market capitalization of $34.99 billion. BQI, currently in exploration and development stage, has a negative Return on Assets of -14.75%, compared with an industry average of 19.95%; Return on Investment of -15.00%, compared with an industry average of 28.43%; and Return on Equity of -17.86%, compared with an industry average of 39.98%.
|
Company Name |
Ticker |
Price per |
Mrkt. Cap. |
P/E |
P/S |
||
|
Oct-15-2009 |
symbol |
Share, $ |
$ Mn |
2009 |
2010 |
2009 |
2010 |
| Suncor Energy Inc. |
SU |
39.28 |
34,990 |
33.34 |
16.03 |
1.05 |
0.35 |
| Canadian Natural Resource Ltd. |
CNQ |
75.39 |
39,280 |
14.28 |
12.30 |
4.31 |
3.33 |
| Marathon Oil Corp. |
MRO |
33.89 |
23,470 |
17.33 |
8.80 |
0.43 |
0.33 |
| Chevron Corp. |
CVX |
75.46 |
148,550 |
16.61 |
9.96 |
0.89 |
0.66 |
| Royal Dutch Shell plc (ADR) |
RDS-B |
58.24 |
178.41B |
N/A |
N/A |
N/A |
N/A |
| Exxon Mobil Corp. |
XOM |
71.84 |
337,650 |
17.79 |
11.89 |
1.29 |
0.90 |
| Median |
|
|
|
17.33 |
11.89 |
1.05 |
0.66 |
|
|
|
|
|||||
| Oilsands Quest Inc. |
BQI |
1.32 |
423.36 |
N/A |
N/A |
N/A |
N/A |
Source: Yahoo! Finance, Analyst Estimates.
Insider Trading Activity
NET SHARE PURCHASE ACTIVITY
| Insider Purchases – Last 6 Months | ||
|
Shares |
Trans |
|
| Purchases |
233,500 |
10 |
| Sales |
N/A |
0 |
| Net Shares Purchased (Sold) |
233,500 |
10 |
| Total Insider Shares Held |
65.86 |
N/A |
| % Net Shares Purchased (Sold) |
0.4% |
N/A |
| Net Institutional Purchases – Prior Qtr to Latest Qtr | |||
|
|
Shares |
||
| Net Shares Purchased (Sold) |
2,344,820 |
||
| % Change in Institutional Shares Held |
3.5% |
||
Data provided by Thomson Financial
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