Topic: How To Invest

I am considering purchasing a large position in WestFire Energy. What is your opinion on this company? Regards.

Article Excerpt

WestFire Energy, $7.13, symbol WFE on Toronto (Shares outstanding: 37.8 million; Market cap: $332.6 million; www.westfireenergy.com), reported cash flow per share of $0.16 in the three months ended March 31, 2011. That’s up 6.7% from $0.15 a year earlier. At the end of the quarter, WestFire had 1,100 drilling locations in four main areas: Redwater, Lloydminster and Bashaw, all located in Alberta and west-central Saskatchewan. Since the quarter ended, WestFire acquired Orion Energy (Toronto symbol OIP) for $360 million in shares. As a result, Sprott Resource Corp. (Toronto symbol SRC), which owned 71% of Orion, now holds 19.9% of WestFire’s shares. The stock trades at 11.1 times annualized cash flow per share, based on the latest quarter. That’s high, but the company will likely be able to raise its production and cash flow through its active drilling program. It also has little debt, so it can borrow funds to take full advantage of drilling opportunities. The addition of Orion should further brighten…