A crude awakening awaits these debt-laden TSX oil stocks should the oil price plunge
SmallCapPower | March 3, 2017: Crude oil inventories are still increasing moderately to push storage levels to new historic highs. With crude oil production close to year-ago levels and oil stocks at record highs, the support for this rally appears unsustainable. Today, we have identified five TSX oil stocks that have high debt levels in relation to equity and forward 2017 cash flows. If crude oil falls into correction territory again as it did in the 2015 crash, these companies would find it difficult to service their debt obligations and would like experience a crude awakening.
Bellatrix Exploration Ltd. (TSX: BXE) – $1.02
Oil & Gas Exploration and Production
Bellatrix Exploration Ltd. is an oil and gas exploration company engaged in the exploration for, and the acquisition, development and production of oil and natural gas reserves in the provinces of Alberta, British Columbia and Saskatchewan. The Company’s properties include Ferrier, Willesden Green, Greater Pembina, Strachan and Harmattan.
- Market Cap: $251.6 million
- YTD Price PCT Change: -20.3%
- Debt to Equity (FY0): 84.2%
- D/CF (2017E): 6.5x
Bonterra Energy Corp. (TSX: BNE) – $24.38
Oil & Gas Exploration and Production
Bonterra Energy Corp. (Bonterra) is an oil and gas company focused primarily on the development of its Cardium land within the Pembina and Willesden Green areas located in central Alberta. Bonterra has a horizontal drilling inventory of approximately 770 net locations. All of Bonterra’s oil and natural gas properties are located in the Provinces of Alberta, British Columbia and Saskatchewan. Bonterra’s oil and natural gas properties yield average production of approximately 12,660 barrel of oil equivalent (BOE) per day. The oil and natural gas property interests held by Bonterra are estimated to contain Proved plus Probable Reserves of over 90,621.4 thousand BOE (MBOE).
- Market Cap: $811.9 million
- YTD Price PCT Change: -16.2%
- Debt to Equity (FY0): 62.0%
- D/CF (2017E): 3.8x
Pengrowth Energy Corp. (TSX: PGF) – $1.69
Oil & Gas Exploration and Production
Pengrowth Energy Corporation is a resource company, which is engaged in the production, development, exploration and acquisition of oil and natural gas assets. The Company owns and operates Lindbergh thermal project, which is located in the Cold Lake area of Alberta and encompasses over 42.5 sections of land. The Company’s conventional oil and gas portfolio includes a contiguous land base in the Greater Olds/Garrington area, encompassing over 480 gross sections of land, with opportunities in the Cardium, Viking and Mannville sands, as well as in the Mississippian carbonate section. It has approximately 50 gross sections of Montney land with liquids content ranging from 0-75 barrel/million cubic feet (bbl/MMcf).
- Market Cap: $925.6 million
- YTD Price PCT Change: -12.4%
- Debt to Equity (FY0): 113.6%
- D/CF (2017E): 7.3x
Penn West Petroleum Ltd. (TSX: PWT) – $2.23
Oil & Gas Exploration and Production
Penn West Petroleum Ltd. (Penn West) is an exploration and production company that operates in the segment of exploring for, developing and holding interests in oil and natural gas properties, and related production infrastructure in the Western Canada Sedimentary Basin directly and through investments in securities of subsidiaries holding such interests. Penn West’s subsidiaries hold approximately 55% interest in the Peace River Oil Partnership. Based in Calgary, Alberta, Penn West operates a portfolio of opportunities with a position in light oil in Canada on a land base encompassing approximately four million acres.
- Market Cap: $1,121.1 million
- YTD Price PCT Change: -5.9%
- Debt to Equity (FY0): 66.1%
- D/CF (2017E): 2.0x
Trilogy Energy Corp. (TSX: TET) – $5.77
Oil & Gas Exploration and Production
Trilogy Energy Corp. is a Canada-based petroleum and natural gas-focused energy company that acquires, develops, produces and sells natural gas, crude oil and natural gas liquids. The Company’s oil and gas properties are located in the Kaybob area and Grande Prairie area of Alberta. Its Kaybob area properties include Kaybob Montney Oil Pool Development, Presley Montney Gas Development, Duvernay Shale Oil and Gas Development, Gething Oil Development and Dunvegan Oil Play. The Company’s annual production from the Kaybob area is approximately 26,190 barrels of oil equivalent per day (Boe/d). The Company’s annual production from the Grande Prairie area is approximately 1,580 Boe/d.
- Market Cap: $756.6 million
- YTD Price PCT Change: -23.6%
- Debt to Equity (FY0): 119.2%
- D/CF (2017E): 5.1x
