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May 2, 2006 Stock Pick: Whittier Energy Corp. (WHIT)

Stock Price: $8.40

Whittier Energy Corporation is an independent oil and gas exploration and production company headquarter in Houston, Texas with operations in Texas and Louisiana. The company also owns interests in oil and gas fields located in the Gulf Coast, Oklahoma and California.

WHIT reported net income of $5.34 million on revenue of $26.94 million for 2005. WHIT is currently trading at a P/E of 13.93 and a forward P/E of only 8.24. Based on 12.51 million shares outstanding, WHIT is trading at 1.73 times book value.

The company just announced today their intention to acquire 18.9 billion cubic feet of producing oil and gas properties. Whittier Energy is setting the acquisition up as an all cash deal with a purchase value of $31.9 million. With the supply of oil and gas declining, an acquisition like this can not go wrong. Energy prices will just continue to move higher as demand in Asia continues to climb.

The upper management within Whittier Energy has been acquiring shares. The CEO acquired over $100,000 worth of WHIT and Whittier Ventures, LLC strengthened its holdings with a $374,602 purchase on December 27th of last year. The insiders have all the motivation in the world to drive WHIT higher.

WHIT is considerably undervalued compared to its peers. The company has grown revenues from $6.15 million in 2003 to $10.13 million in 2004 to $26.94 million in 2005.

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