New buy: TAG Oil Ltd.

Fifty cents for 36 cents is not a terrible deal.

Hot diggity. I've been trying to liquidate my Canadian positions so that I can start from scratch in 2019 and share my trades as I go, but sometimes an opportunity comes along that I cannot refuse. Today is one of those days.

TAG Oil has many excellent things going for it. Price to tangible book of 0.3, no debt, 5 percent insider ownership. And, despite trading on the TSX, it is not affected by Canadian pipeline capacity because its operations are largely in New Zealand.

Or were.

Yesterday TAG announced that it was selling all of its NZ operations to Tamarind Resources in a deal that will bring in US$30 million at closing:

"Following completion of the Transaction, TAG expects to have over C$0.50 per share in cash and working capital, continued exposure to the current operations and upside of the NZ Assets."

There are some risks, of course. Shareholders could reject the deal (it represents a loss for long-term shareholders) or it could fall apart for other reasons. The company doesn't pay a dividend, so I could potentially baghold without income. (Memories of the eBay fiasco of 2008-2010 dancing through my head).

Other risks are the general aversion to the energy sector right now and the sort of mild antipathy that some investors feel for companies that cross hemispheres to finance their ventures.

But there are other upsides too. The deal comes with a 2.5 percent royalty on the sold properties, which could theoretically free up the company to further explore its Australian lease. We shall see what the future holds.

EDIT: Added 6000 more on November 8 at 32 cents.