Lesson in flexibility

摘要

Pure-play companies that focus on one or two geographic areas, and chase either oil or just natural gas, have a certain investor appeal. They're easy to understand. Management usually has the geology of the play nailed. And if it's a junior producer, the assets typically make for a more desirable strategic acquisition target than a company with a scattering of properties across western Canada. But a good argument can also be made for a balanced approach to oil and gas production, especially if the company has some size. It provides flexibility to shift focus from gas drilling to oil drilling when the economics of gas are in the tank. The company can pursue its own goals internally and avoid bandwagon land grabs. And, in some cases, it can even take advantage of some counter-cyclical, longer-term opportunities.