Updating Compton Petroleum, Breakwater Resources and Stornoway Diamond Corp.

Article Excerpt

COMPTON PETROLEUM $1.25 (Toronto symbol CMT; SI Rating: Speculative) (403-237-9400; www.comptonpetroleum.com; Shares outstanding: 130 million; Market cap: $162.5 million) has dropped its plan to sell the company. In February, 2008, Compton initiated a strategic review in response to repeated requests from its largest shareholder, New York-based private equity firm Centennial Energy Partners. Centennial holds a 19.8% interest in Compton. In June, 2008, the company followed the recommendation of the strategic review and put itself up for sale. Compton failed to receive what it regarded as an acceptable offer. Problems in credit markets, combined with falling natural gas prices have made it difficult for rivals to make acquisitions. More than 85% of Compton’s production is natural gas. Compton’s debt is high at $708 million, or almost three times its market cap of $179.3 million. The company will need to continue to use some of its cash flow to pay down debt. So it will spend less on exploration next year. That will likely…