Today we have analyzed the risk levels of the high-yielding Canadian oil stocks on our list
SmallCapPower | October 4, 2017: Simple payout ratio is used to determine what portion of a Company’s funds from operations are being used to pay dividends. It is calculated by taking the dividends paid out divided by cash flow by operations in the same period, adjusted for changes in non-cash working capital. The simple payout ratio is preferable to the traditional dividend payout ratio because it illustrates how much cash from operations was used to pay dividends, as opposed to net income, which is not cash reconciled. Higher payout ratios imply a slower growth rate or a risk of a dividend cut as less investment/sustainable capital is available towards future or ongoing operations. Today we have analyzed the risk levels of five high-yielding Canadian oil stocks.
Granite Oil Corp (TSX: GXO) – $3.44
Oil & Gas Exploration and Production
Granite Oil Corp. is a Canadian oil producer in Southern Alberta, approximately 70 kilometers south of Lethbridge. GXO’s Alberta Bakken property consists of approximately 60 gross oil wells and over 140 gross gas wells. Currently, the Company is engaged in the drilling operations of approximately 20 gross wells, over 10 of which are drilled on the Alberta Bakken properties, and the remaining four are drilled on the Brazeau Belly River properties.
- Market Cap: $118 million
- Dividend Yield: 12.2%
- Simple Payout Ratio: 52.5%
- Total Debt (CAD): $28 million
Cardinal Energy Ltd. (TSX: CJ) – $4.62
Oil & Gas Exploration and Production
Cardinal Energy Ltd. is an oil and natural gas company located in Alberta and Saskatchewan. 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. Its Bantry property is located near the City of Brooks, Alberta and it produces approximately 4,400 boe/d of medium crude oil, natural gas and natural gas liquids (NGLs). Lastly, the Slave Lake (Mitsue) property is located approximately 280 kilometers north of Edmonton, Alberta and it produces approximately 3,600 boe/d (light crude oil and NGLs).
- Market Cap: $510 million
- Dividend Yield: 9.1%
- Simple Payout Ratio: 60.8%
- Total Debt (CAD): $108 million
Bonterra Energy Corp. (TSX: BNE) – $16.29
Oil & Gas Exploration and Production
Bonterra Energy Corp. (Bonterra) is an oil and gas company with operations in Alberta Saskatchewan and British Columbia. Its oil and gas properties include Pembina and Willesden Green Area, Shaunavon Area and Prespatou Area. The Pembina and Willesden Green Cardium fields are its properties located in central Alberta. The Shaunavon properties are located in the Chambery field and produce medium density crude oil from the upper Shaunavon formation under waterflood. Bonterra’s oil and natural gas properties yielded average production is 12,650 barrels of oil equivalent per day.
- Market Cap: $543 million
- Dividend Yield: 7.4%
- Simple Payout Ratio: 30.8%
- Total Debt (CAD): $354 million
Surge Energy Inc. (TSX: SGY) – $2.22
Oil & Gas Exploration and Production
Surge Energy is an oil focused exploration and production company based in Canada. The Company has an inventory of more than 700 drilling locations spread over Western Canada. Surge has three major operational zones called Western Alberta, South Eastern Alberta and Shaunavon, which expect to produce 14,450 boe/d during 2017.
- Market Cap: $517 million
- Dividend Yield: 4.3%
- Simple Payout Ratio: 19.4%
- Total Debt (CAD): $161 million
Freehold Royalties Ltd (TSX: FRU) – $14.71
Oil & Gas Exploration and Production
Freehold Royalties Ltd. is focused on acquiring and managing oil and natural gas royalties in Western Canada. The Company’s total land holdings encompass approximately 3.7 million gross acres, over 90% of which are royalties. Of this, its mineral title lands (including royalty assumption lands), cover approximately 750,000 acres. It also has interests in over 42,000 wells (of which over 40,000 are royalty wells, including over 1800 unitized wells). The Company has approximately 300,000 gross undeveloped acres. In addition, it has gross overriding royalty interests in over 2.5 million acres. The Company has drilled and completed a total of over 5,290 wells within the Western Canadian Sedimentary Basin.
- Market Cap: $1,737 million
- Dividend Yield: 4.1%
- Simple Payout Ratio: 55.9%
- Total Debt (CAD): $84 million
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in any of the companies mentioned above.
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