The Canadian oil stocks on our list have increasing forward revenues and may be undervalued
SmallCapPower | April 11, 2017: Oil prices have been moving higher following ongoing geopolitical tensions after the United States launched air strikes against Syria last week. Today we have identified some Canadian oil stocks, low-debt oil producers that are projected to grow revenues in the near term as oil treads higher. After screening for stocks that appear undervalued, we are sharing five oil producers with forward 2017 estimated Price to Cash Flows below their industry peer average of 7.5x. The price-to-cash-flow (P/CF) ratio is a widely-used valuation metric that compares a stock’s market price to the amount of cash flow the company generates on a per-share basis.
Spartan Energy Corp. (TSX: SPE) – $2.68
Oil & Gas Exploration and Production
Spartan Energy Corp, formerly Alexander Energy Ltd, is a Canada-based oil and natural gas exploration and production company with producing properties focused in Saskatchewan. The Company’s properties include Southeast Saskatchewan, West Central Saskatchewan and Alexander Alberta. The Southeast Saskatchewan property focuses on conventional Mississippian targets, primarily in the Frobisher/Alida and Midale formations. The West Central Saskatchewan property consists of approximately 100 net drilling locations in the Dodsland area of Saskatchewan.
- Market Cap: $1,051.3 million
- D/E (FY0): 18.5%
- Estimated Revenue Growth (FY1/FY0): 175%
- P/CF (2017e): 6.2x
Tamarack Valley Energy Ltd. (TSX: TVE) – $3.01
Oil & Gas Exploration and Production
Tamarack Valley Energy Ltd. (Tamarack) is a Canada-based oil and natural gas company with working interests in petroleum and natural gas properties in the Alder Flats area. Tamarack has interests in over 220 sections of land in the Wilson Creek and Alder Flats area of Alberta. The Company operates a range of oil batteries, which have capacities of approximately 3,800 barrels per day (bbl/d) capacity and approximately 1,000 bbl/d; an approximately 30 million cubic feet per day (mmcf/d) gas plant, and an approximately six mmcf/d gas plant. Tamarack has interests in approximately 50 sections of land in the Pembina, Garrington and Lochend areas of Alberta. The Company has interests in approximately 60 sections of land in the Redwater and Westlock areas of Alberta.
- Market Cap: $511.3 million
- D/E (FY0): 9.6%
- Estimated Revenue Growth (FY1/FY0): 170%
- P/CF (2017e): 4.1x
Whitecap Resources Inc. (TSX: WCP) – $10.39
Oil & Gas Exploration and Production
Whitecap Resources Inc is a Canada-based oil-weighted growth company focused on its existing assets enhanced by oil-based acquisitions. Its assets include Boundary Lake property, which is located in northeast British Columbia; Valhalla North property, which is located in the Peace River Arch area of Alberta and is characterized by shallow declines and a production base, and Deep Basin properties, which include Karr, Simonette, Kakwa, Elmworth and Wapiti, which are located southwest of Grande Prairie, Alberta. The primary reservoirs being developed are the Dunvegan and Cardium. Its Cardium producing areas are primarily located in the Pembina, Garrington, Ferrier and Willesden Green areas of West Central Alberta.
- Market Cap: $2,859.7 million
- D/E (FY0): 24.7%
- Estimated Revenue Growth (FY1/FY0): 83%
- P/CF (2017e): 6.7x
Crescent Point Energy Corp. (TSX: CPG) – $14.28
Oil & Gas Exploration and Production
Crescent Point Energy Corp. (Crescent Point) is a Canada-based oil and gas exploration, development and production company with assets consisting of light and medium oil and natural gas reserves in Western Canada and the United States. Its crude oil and natural gas properties and related assets are located in the provinces of Saskatchewan, Alberta, British Columbia and Manitoba, and the states of North Dakota, Montana, Colorado and Utah.
- Market Cap: $5,802.3 million
- D/E (FY0): 39.8%
- Estimated Revenue Growth (FY1/FY0): 58%
- P/CF (2017e): 3.9x
Surge Energy Inc. (TSX: SGY) – $2.79
Oil & Gas Exploration and Production
Surge Energy Inc. is a Canada-based oil and gas exploration, development and production company. Its principal oil and natural gas producing properties are located in Alberta and Saskatchewan, and focused on over three core areas: Western Alberta, Southeast Alberta and Southwest Saskatchewan. The properties in Northern Alberta include Valhalla/Wembley, Nipisi, Windfall and Nevis.
- Market Cap: $470.0 million
- D/E (FY0): 20.6%
- Estimated Revenue Growth (FY1/FY0): 62%
- P/CF (2017e): 4.7x
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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