According to the 2014 Crude Oil Forecast released by the Canadian Association of Petroleum Producers (CAPP), Canadian oil production will grow an average 4% annually or 175,000 barrels per day (bpd) to 6.4 million bpd by 2030 compared to the 3.5 million bpd production in 2013. CAPP estimates that conventional oil production in western Canada will increase to 1.4 million in 2015 and 1.5 million in 2030 from 1.3 million bpd in 2013, while production from oil sands is expected to increase to 2.3 million in 2015 and 4.8 million in 2030 from 1.9 million bpd in 2013.
Increasing global demand and vast oil reserves in Canada make the country an attractive supply source for markets in the U.S. and beyond. During 2013, refineries in the U.S. Gulf Coast processed almost 8 million bpd of crude including over 2 million bpd of foreign heavy oil imports. Canadian producers could displace some of these imported volumes and are estimated to supply at least 680,000 bpd to the U.S. by 2020, up from the current supply of 120,000 bpd. CAPP also notes that China and India are potential markets with their oil demand growing at the fastest pace in the world. According to the U.S. Energy Information Administration (EIA), combined oil imports by China and India are estimated to increase by 8.0 million bpd to 17.7 million bpd by 2030, up from 9.7 million bpd in 2013.
We have picked 11 Canadian Oil & Gas producing companies, which registered significant production growth during 2013 and in the first quarter of 2014. The shortlisted stocks have recorded strong operating margins during the recent quarter and are currently trading at relatively low price to cash flow multiples. We note that the majority of these stocks have recorded gains during the past one month with average trading volume in excess of 100,000.
|
Company Name |
Ticker |
Exchange |
Market Cap |
Last Price |
Average Volume |
Price Change (1-Month) |
Operating Margin* |
EV to EBITDAX* |
Price to Cash Flow |
Total Production (MMBOE) |
Total Production* (MMBOE) |
Total Production Growth* |
|
Storm Resources Ltd |
SRX |
TSXV |
593.3 |
5.40 |
341,342 |
5.9% |
16.9% |
59.6 |
17.7 |
1.33 |
0.46 |
103.7% |
|
Petroamerica Oil Corp |
PTA |
TSXV |
199.4 |
0.34 |
1,861,828 |
6.3% |
31.0% |
4.8 |
1.9 |
1.99 |
0.58 |
95.2% |
|
DeeThree Exploration Ltd |
DTX |
TSX |
969.5 |
10.93 |
552,369 |
2.2% |
38.3% |
23.6 |
7.2 |
NA |
0.84 |
58.2% |
|
Whitecap Resources Inc |
WCP |
TSX |
3,982.0 |
16.28 |
2,568,882 |
10.0% |
12.8% |
39.0 |
7.4 |
7.22 |
2.39 |
50.7% |
|
Ithaca Energy Inc |
IAE |
TSX |
903.1 |
2.75 |
782,949 |
12.2% |
8.0% |
31.8 |
2.8 |
3.79 |
0.83 |
42.4% |
|
Twin Butte Energy Ltd |
TBE |
TSX |
621.7 |
1.80 |
6,816,428 |
-7.2% |
19.9% |
15.6 |
4.0 |
6.42 |
2.03 |
30.6% |
|
Legacy Oil + Gas Inc |
LEG |
TSX |
1,704.3 |
9.67 |
1,921,286 |
13.5% |
28.5% |
18.4 |
4.2 |
6.94 |
1.90 |
20.9% |
|
NuVista Energy Ltd |
NVA |
TSX |
1,612.9 |
11.90 |
780,328 |
9.2% |
10.4% |
44.5 |
11.3 |
6.33 |
1.60 |
19.6% |
|
Painted Pony Petroleum Ltd |
PPY |
TSX |
1,210.6 |
13.56 |
1,268,983 |
21.1% |
13.1% |
45.3 |
13.9 |
NA |
0.88 |
13.2% |
|
Long Run Exploration Ltd |
LRE |
TSX |
843.6 |
5.64 |
1,298,840 |
-0.4% |
17.9% |
14.0 |
2.7 |
NA |
2.31 |
8.5% |
|
Bonavista Energy Corp |
BNP |
TSX |
3,293.3 |
16.28 |
813,189 |
-1.6% |
36.8% |
11.7 |
5.8 |
26.79 |
6.65 |
2.2% |
Source: Bloomberg
*Latest Reported Quarter
EBITDAX: Earnings Before interest, depreciation, depletion, amortization and exploration expenses
Company Description:
Storm Resources Ltd (TSXV: SRX)
Storm Resources Ltd. explores for and produces oil and natural gas. The company operates in Alberta and British Columbia.
Petroamerica Oil Corp (TSXV: PTA)
Petroamerica Oil Corp. is an oil and gas exploration and production company. The company owns interests in oil and gas assets in Colombia.
DeeThree Exploration Ltd (TSX: DTX)
DeeThree Exploration Ltd. explores for and produces oil and natural gas. The company provides gas transportation through its usage of natural gas production. DeeThree Exploration mines in Canada.
Whitecap Resources Inc (TSX: WCP)
Whitecap Resources, Inc. explores for oil and natural gas. The company operates in western Canada.
Ithaca Energy Inc (TSX: IAE)
Ithaca Energy, Inc. explores, develops and produces oil and gas in the North Sea. The company owns and operates a diverse portfolio of development and production assets through acquisition and participation.
Twin Butte Energy Ltd (TSX: TBE)
Twin Butte Energy Ltd. acquires, explores, and develops oil and natural gas properties. The company currently holds interests in properties located in Alberta, Canada.
Legacy Oil + Gas Inc (TSX: LEG)
Legacy Oil + Gas Inc. is an intermediate oil and natural gas company. The company’s light assets are focused in the Williston Basin and southwest Alberta. The majority of Legacy’s production is from Turner Valley, the Bakken light oil resource play in southeast Saskatchewan and the Spearfish light oil resource play in Manitoba and North Dakota.
NuVista Energy Ltd (TSX: NVA)
Nuvista Energy Ltd. acquires, explores, and develops oil and natural gas properties. The company is focusing its efforts on eastern Alberta, Canada.
Painted Pony Petroleum Ltd (TSX: PPY)
Painted Pony Petroleum Ltd. seeks to acquire interests in oil and natural gas exploration projects in Canada.
Long Run Exploration Ltd (TSX: LRE)
Long Run Exploration Ltd. is an intermediate oil and natural gas company focused on the Western Canadian Basin.
Bonavista Energy Corp (TSX: BNP)
Bonavista Energy Corporation produces oil and natural gas. The company operates in Alberta, Saskatchewan, and British Columbia.
