Today we have identified some Canadian oil stocks that are undervalued compared to their peers
SmallCapPower | January 9, 2018: During the past month WTI crude has risen 7.7%, fueled by concern over rising tensions in Iran. The Trump administration decides mid-January whether to continue to waive energy sanctions on Iran, and ongoing large protests highlight widespread discontent with the Iranian government. Today we have identified four Canadian oil stocks that are undervalued compared to their peers.
Journey Energy Inc. (TSX:JOY) – $1.80
Journey Energy is a Canada-based oil & gas exploration and production company operating in Western Canada. The Company has drilled 40 horizontal wells and holds interests in 300 oil pools in its Central and South regions, as well as development drilling in its Resource Fairway.
- Market Cap: $92.2 Million
- EV/EBITDA: 2.3x
- Peer Median EV/EBITDA: 6.0x
TransGlobe Energy Corp. (TSX:TGL) – $1.81
TransGlobe Energy Corporation is an oil & gas exploration and production company, concentrated in Canada and Egypt. TGL’s Canadian assets are in the Harmattan area in Central Alberta, 80 kilometers north of Calgary. In Egypt, TransGlobe has 100% working interests in six concessions, which comprise 1.07 million acres of land.
- Market Cap: $130.7 Million
- EV/EBITDA: 2.6x
- Peer Median EV/EBITDA: 6.0x
Frontera Energy Corp. (TSX:FEC) – $41.30
Frontera Energy is a Canada-based producer with operations focused in Latin America. The Company has diversified interests in over 25 exploration and production blocks in Columbia and Peru. FEC aims to renegotiate contracts, conduct further exploration, and optimize their portfolio.
- Market Cap: $2,065.2 Million
- EV/EBITDA: 1.9x
- Peer Median EV/EBITDA: 6.0x
Bonavista Energy Corp. (TSX:BNP) – $2.12
Bonavista Energy Corporation is a Calgary-based oil & gas company. The Company’s West Central Core Area is characterized by natural gas and light oil resources. West Central Core Area is located within the Western Canadian Sedimentary Basin (WCSB) between Calgary and Drayton Valley, Alberta. Infrastructure in West Central Core Area includes over 2,800 kilometers of pipelines and approximately 40 facilities. The Deep Basin Core Area contains multiple vertically stacked oil and natural gas reservoirs.
- Market Cap: $560.7 Million
- EV/EBITDA: 4.4x
- Peer Median EV/EBITDA: 6.0x
Disclosure: Neither the author nor his/her family own shares in any of the companies mentioned above.
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