5 TSX Oil & Gas Stocks That Could Slip Into the Dividend Danger Zone

With dividend yields as high as 7%, the TSX oil & gas stocks on our list will have trouble paying out to shareholders in a low-price environment

SmallCapPower | April 3, 2017: Today we have identified five TSX oil & gas stocks (not just small cap) that would get stung from low crude oil prices. With OPEC’s inability to consistently abide by agreed-upon production cuts, and U.S.’ resilient production, oil prices appear likely to stay below US$60/barrel. Lower revenues from the sale of production will make it difficult for oil and gas companies to service their debt obligations. If we see prices fall below US$30 as we did in 2015, you can almost guarantee that dividend yields as high as 7% will not last very long.

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Ensign Energy Services Inc. (TSX: ESI) – $7.92
Oil & Gas Drilling

Ensign Energy Services Inc. is a Canada-based company engaged in the business of providing oilfield services to the oil and gas industry in Canada, the United States and internationally. The Company’s oilfield services include drilling and well servicing, oil sands coring, directional services, underbalanced and managed pressure drilling, equipment rentals, wireline services and production testing/fracturing fluid (frac flowback) services. The Company owns a fleet approximately 220 land drilling rigs across the world.

  • Market Cap: $1,220.80 million
  • YTD Price PCT Change: -15.6%
  • Dividend Yield: 6.1%
  • Dividend Per Share: $0.48

Cardinal Energy Ltd. (TSX: CJ) – $7.24
Oil & Gas Exploration and Production

Cardinal Energy Ltd. is a Canada-based oil-focused company engaged in the acquisition, exploration and production of petroleum and natural gas in the provinces of Alberta and Saskatchewan. Its Wainwright properties are located approximately 200 kilometers southeast of Edmonton, Alberta. The Wainwright properties (including the Hayter asset) produce approximately 4,500 barrels of oil equivalent per day (Boe/d) of predominantly heavy crude oil and associated natural gas.

  • Market Cap: $573.90 million
  • YTD Price PCT Change:-31.6%
  • Dividend Yield: 5.8%
  • Dividend Per Share: $0.42

Bonterra Energy Corp. (TSX: BNE) – $23.04
Oil & Gas Exploration and Production

Bonterra Energy Corp. (Bonterra) is an oil and gas company that is focused primarily on the development of its Cardium land within the Pembina and Willesden Green areas located in central Alberta. It operates Pembina and Willesden Green Cardium fields, Prespatou area and Shaunavon properties. 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.

  • Market Cap: $767.50 million
  • YTD Price PCT Change: -20.8%
  • Dividend Yield: 5.2%
  • Dividend Per Share: $1.20

Vermilion Energy Inc. (TSX: VET) – $49.01
Oil & Gas Exploration and Production

Vermilion Energy Inc. produces oil and gas, and focuses on the acquisition, development and optimization of producing properties in North America, the Europe and Australia. Its segments include Canada, which includes production and assets focused in West Pembina near Drayton Valley, Alberta and Northgate in southeast Saskatchewan; France, which produces oil in France; Netherlands, which produces onshore gas and interests include over 24 onshore licenses and two offshore licenses; Germany, which holds interest in a four partner consortium; Ireland, which includes a non-operating interest in the offshore Corrib gas field located approximately 83 kilometers off the northwest coast of Ireland; Australia, which holds an operated working interest in the Wandoo field located approximately 80 kilometers offshore on the northwest shelf of Australia; and the United States, which has interests in approximately 97,200 net acres of land in the Powder River Basin of northeastern Wyoming.

  • Market Cap: $5,818.50 million
  • YTD Price PCT Change: -13.2%
  • Dividend Yield: 5.3%
  • Dividend Per Share: $2.58

Northern Blizzard Resources Inc. (TSX: NBZ) – $3.42
Oil & Gas Exploration and Production

Northern Blizzard Resources Inc. is a Canada-based crude oil production and development company focused on maximizing oil recovery from its heavy oil resource base. The Company is engaged in the exploration for, and the acquisition, development and production of, petroleum and natural gas reserves in western Canada. The Company’s properties include Cactus Lake, Winter, Court, Smiley, Coleville, Cuthbert, Thermal, Westhazel, Hearts Hill, Mantario and Senlac. The Company’s operations, infrastructure and concentrated land position are focused in the Kerrobert and Lloydminster areas of Saskatchewan. The Company has a focused and concentrated asset base of approximately 189,800 net acres along the Alberta and Saskatchewan border with a discovered petroleum initially-in-place (DOIIP) resource base of approximately 2.1 billion barrels (bbls).

  • Market Cap: $345.90 million
  • YTD Price PCT Change: -11.9%
  • Dividend Yield: 7.0%
  • Dividend Per Share: $0.29