Q: BNE has been one of my worst performing oil and gas stocks over the past year. Your last answer on BNE mentioned that it is cheap on all metrics and my spreadsheet shows it screening well against other oil and gas companies. What do you think is the problem?
5i Research Answer:
The gas sector has been very weak with lower prices, and investors simply are using the sector as a source of cash for more excitement elsewhere. It is VERY cheap, but also its small size will keep some investors away. Also, it does not pay a dividend like most in the sector. The balance sheet is fine, and insiders own 13%. Production rose 6% last year. We would still consider it quite a decent small cap within the sector.