Aside from the recent slump in energy prices, junior oil & gas producers have to face the added pressure of heavy interest payments. Within this highly capital intensive industry, companies are forced to utilize a lot of external financing, primarily debt, in order to finance their operations. However, this may turn very dangerous when the product that you’re selling is having unfavorable price fluctuations. To that end, the following Canadian oil and gas juniors are at risk of not being able to make its debt payments.
PetroShale Inc. (TSXV: PSH) – $1.42
Oil & Gas Exploration and Production
Petroshale Inc. is a Canada-based oil-weighted development and production company engaged in acquisition, development and consolidation of interests in the areas of North Dakota Bakken. The Company’s focus is on land interests with near term drilling exposure. The Company’s business platform is based upon two defining attributes: a non-operating model combined with its strategic partnership with Slawson Exploration.
- Market Cap: $39,179,471
- Net Debt/EBITDA: 22.4x
- Price Change (1 Year): +1%
- Price Change (1 Month): +18%
Sterling Resources Ltd. (TSXV: SLG) – $0.17
Oil & Gas Exploration and Production
Sterling Resources Ltd. is a Canada-based energy company. The Company is engaged in the exploration, appraisal and development of crude oil and natural gas in the United Kingdom, Romania, the Netherlands and France. The company’s offshore properties include licenses in two Blocks in the Northern North Sea (oil), one block in the Central North Sea (oil) and fifteen blocks in the Southern North Sea (gas). The Company holds interests in three onshore United Kingdom basins.
- Market Cap: $64,915,712
- Net Debt/EBITDA: 14.0x
- Price Change (1 Year): -74%
- Price Change (1 Month): -6%
Canadian Spirit Resources Inc. (TSXV: SPI) – $0.22
Oil & Gas Exploration and Production
Canadian Spirit Resources Inc. (CSRI) is a Canada-based natural resources company. The Company is focused on the identification and development of opportunities in the unconventional natural gas sector of the energy industry. The Company through its joint venture, Canbriam Energy BC Partnership (Canbriam) is engaged in evaluating and developing the productive capability of its Montney unconventional natural gas and natural gas liquids play in Farrell Creek, British Columbia.
- Market Cap: $28,436,948
- Net Debt/EBITDA: 14.0x
- Price Change (1 Year): -49%
- Price Change (1 Month): -12%
US Oil Sands Inc. (TSXV: USO) – $0.09
Oil & Gas Exploration and Production
US Oil Sands Inc. is a Canada-based company, which is engaged in the exploration and development of oil sands properties. The Company, through its wholly owned United States subsidiary US Oil Sands (Utah) Inc., has a 100% interest in bitumen leases covering approximately 32,000 acres of land in Utah.
- Market Cap: $72,737,503
- Net Debt/EBITDA: 11.7x
- Price Change (1 Year): -35%
- Price Change (1 Month): +6%
Niko Resources Ltd (TSX: NKO) – $0.46
Oil & Gas Exploration and Production
Niko Resources Ltd. is a Canada-based company engaged in the oil and natural gas exploration and production. The Company is focused on value generation in the D6 Block in India. The D6 Block is of 1,888,315 gross acres (offshore), located in the Krishna-Godavari Basin in India. The Block 9 is of 1,699,360 gross acres (onshore), located in the Bengal Basin in Bangladesh. The Company operates in Canada, India, Bangladesh, Indonesia, and Trinidad and Tobago.
- Market Cap: $43,380,264
- Net Debt/EBITDA: 10.0x
- Price Change (1 Year): -80%
- Price Change (1 Month): -8%
Source: Thomson Reuters
