May 12, 2018 - 5:25pm EST by
2018 2019
Price: 0.48 EPS 0 0
Shares Out. (in M): 155 P/E 0 0
Market Cap (in $M): 74 P/FCF 0 0
Net Debt (in $M): -26 EBIT 0 0
TEV ($): 48 TEV/EBIT 0 0

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Iron Bridge is an orphan Canadian micro cap e&p company trading at a substantial discount to peers with a clean balance sheet and on the cusp a significant inflection in production growth.  Iron Bridge is currently trading below its 1P PV10, 20% below the price at which management and the board recently purchased shares in the company, and 30% below the price at which the company has been repurchasing its own shares. The company has an entirely new management team and board with their turnaround plan about to start to show results. IBR’s share price has fallen 33% year to date despite crude oil’s recovery to over $70/barrel as the company is off almost all investors’ radar screens. Later this month, IBR will reveal well results from its new completion design which should be a significant catalyst for its shares. IBR shares could easily double by the end of the year as the company uses its net cash balance sheet to accelerate production growth. We believe the shares are likely worth more than C$1.40/share today. With such a large disconnect between intrinsic value and its public market valuation, we expect IBR will end up being acquired at over C$1/share within the next 24 months.


Capital Structure

Share Price


Shares Outstanding


Mkt Cap








Value of Tangle Creek Shares


   # of Tangle Creek Shares


  Assumed Per Share Value of Tangle Creek Shares



Enterprise Value



In mid November 2017, Iron Bridge initiated a normal course issuer bid to purchase up to 12 million of its common shares. As of March 20th, 2018 the company had repurchased 1,769,874 shares for $1.2 million (roughly $0.68/share.)



Iron Bridge Resources is the remaining assets of RMP Energy after RMP sold its West Central Alberta assets to Tangle Creek Energy Ltd. in October 2017. Iron Bridge’s assets are in the Elmsworth field in the Montney.


In January 2017, RMP started to reshape its board of directors with the appointment of Josh Young to the board. Within three weeks of Mr. Young’s appointment, RMP’s then CEO John Ferguson announced plans to retire and Mr. Young was named chairman of RMP’s board. By the end of May 2017, RMP’s entire board of directors had turned over.


On July 26, 2017 Iron Bridge named its new management including CEO Rob Colcleugh, COO Tim Krysak, VP of Engineering Jeremy Smith, VP of completions Gregg Nixon, and VP of exploration Zoran Jankovic. Iron Bridge decided to retain CFO Dean Bernhard. Mr. Krysak, Mr. Smith, and Mr. Nixon all joined from Tourmaline Oil Corp (TOU CN) -- Tourmaline is well known for being one of the best operators in Canada and has experienced over the years very few senior executive departures.



In September 2017, Mr. Young (through his investment management firm Bison Interests LLC and Bison Energy Opportunity Fund LP) as well as the new management team and other board members collectively purchased 5.35 million units of the company (comprised of one share and one 4 year $0.75 strike price warrant) for $0.60 per unit. The warrants vest in equal tranches of one third each upon the 20 day weighted average trading price of the common shares equalling or exceeding $0.75, $0.90, and $1.05.


On October 17, 2017 RMP closed the disposition to Tangle Creek Energy Ltd. of its interests in the Waskahigan, Grizzy, Kaybob, Gilby, and Pine Creek areas of West Central Alberta for $68 million in cash and 13.85 million shares of Tangle Creek common stock.


RMP renamed itself Iron Bridge Resources in November 2017.


At the end of 2017, Iron Bridge had proved and probable reserves of 26.11 million barrels of oil equivalent. Proved reserves were 11.47 million boe. The PV10 of Iron Bridge’s proved reserves is C$40.5 million. The PV10 of IBR’s proved and probable reserves is C$121.5 million.



In q4 2017, IBR had production of 1,946 barrels of oil equivalent per day. Iron Bridge’s production was 72% nat gas and 28% liquids. Ascribing no value to Iron Bridge’s undeveloped acreage, IBR shares are currently trading at under C$19,000 per flowing boe.


Iron Bridge’s Assets

IBR’s acreage sits in the volatile oil window of the Montney. Iron Bridge controls 53,440 net acres, 49,600 of these net acres are in the Montney. Iron Bridge has only booked reserves on 10% of this acreage. Undeveloped land in IBR’s area of operations has been trading for C$3,000 to C$12,000 an acre in private market transactions.