Buying Dollars for 11 Cents
PoW (#17) Trading at ~10% of Liquidation Value. A hidden natural gas hedge. Primed for a 200% re-rate in 2026.
If you thought last week’s post offered a great bang for your buck, this week we’re bringing you an even better deal.
Anything O&G related right now is being punished because WTI is trading at 3-year lows.
It all seems intermingled. But it is not.
These guys are not nearly as affected by the oil crash as the market thinks, given that the majority of what they produce is actually natural gas.
Despite this, they are priced incredibly cheaply relative to their already producing assets. We are talking about a valuation gap so wide that we could easily see a re-rating of up to 6x in the next 3 years if things play out as we expect.
It is asset-rich, operationally efficient, and offers a margin of safety that frankly shouldn’t exist in a rational market. It is currently priced for bankruptcy, yet it is generating free cash flow and sits on top of decades of top-tier inventory.
We expect the re-rate to occur as they finally cross the finish line on their debt targets in 2026.
⭐ Overall grade: 9.5 / 10
Pick of the Week. A curated series of high-conviction research on companies currently under our microscope. We screen for specific dislocations where the market has mispriced the balance sheet or earnings power.
The Selection Criteria:
Asset Arbitrage: Trading at a discount to tangible liquidation value.
Backlog Disconnect: Future contracted revenue ignored by the market.
Hidden Margins: Structural profitability masked by temporary noise or CAPEX cycles.
The Structure:
The Business: A concise operational overview.
The Dislocation: The specific structural reason the opportunity exists.
The Valuation: A stress-tested snapshot including downside risks (”Red Flags”) and our proprietary score.
None of the following should be construed as investment advice. Please consult a financial advisor before making any investment decision. You will find a full disclaimer at the end of this post.
