NEW YORK (TheStreet) -- Madalena Energy may be the only oil company in the world that actually welcomed the free-fall in crude prices.
The reason: Madelena gets a set price -- currently around $77 a barrel -- from Argentina for most of the oil it produces, sheltering it from the sharp drop in prices.
Still, shares of the Calgary company haven't benefited from this advantage. They are down some 70% since their 52-week high in April compared to a 12% drop for Exxon (XOM) and a 20% fall for Chevron (CVX) .
David Tawil, president of New York hedge fund Maglan Capital, argues the share price decline is merely a case of investor overreaction.
"The baby has been thrown out with the bathwater," he said. "All of Canadian energy has been been beaten up pretty badly over the past couple of months."
Unusually for an oil and gas company, Madalena has no debt. It has stated it will pay for $38 million in capital expenditures in 2015 with cash thrown off by its own operations.
These are some of the arguments made by Maglan Capital, which recently reached a deal with Madalena to overhaul its board of directors. Following the overhaul, Madalena has suspended less-profitable drilling operations in Canada to focus exclusively on Argentina.
Tawil is optimistic that a change in Argentina's government following Oct. 25 elections will result in leadership "much more capitalist-minded than the current administration." Following from that expected shift, he envisions "at least some movement" toward satisfying creditors led by Elliott Management, whose refusal to accept less than it is owed from the Argentine government has blocked much of its access to outside investment.
"That's really when things should start to pick up," Tawil says, adding, "We're expecting something like a 10-times return."
Tawil is also positive on the roughly one million-acre territory Madalena controls in the "most fertile deposit" in a region he believes is "the second-most fertile in the world" after the Bakken and Eagle Ford formations, he said in an interview this week. Exxon and Chevron are among the companies operating in the Vaca Muerta formation, Madalena's most promising play.