The Canada-listed oil and gas stocks on our list are trading at attractive valuations relative to their peers
SmallCapPower | December 13, 2017: WTI crude currently stands at US$58.20, up 2.5% M/M, while the S&P/TSX Capped Energy Index decreased 5.8% over the same period. Importantly, OPEC producers and allies remain committed to the supply cuts as the UAE (currently holds OPEC presidency) announced that the cartel may release a strategy to exit production cuts by June 2018. Even the Non-OPEC allies (Russia) remain committed towards working together. Today, we have identified five oil and gas stocks trading at attractive valuation, that may perform well in existing macro-economic environment.
TransGlobe Energy Corp. (TSX:TGL) – $1.75
Oil & Gas Exploration and Production
TransGlobe Energy Corporation is an oil exploration and production company. The Company’s activities are concentrated in Canada and Egypt. The Company’s Canadian assets are in the Harmattan area in Central Alberta, 80 kilometers north of Calgary. In Egypt, the Company has 100% working interests in six concessions. In total, the Company’s properties in Egypt comprise 1.07 million acres of land.
- Market Cap: $126 Million
- Month over Month Return: -8.4%
- Enterprise Value to EBITDA (NTM): 2.4x
- Peer Average EV/EBITDA (NTM): 6.1x
SDX Energy Inc. (TSXV:SDX) – $0.82
Oil & Gas Exploration and Production
SDX Energy is a North Africa-focused exploration and production company. The Company’s portfolio comprises six concessions in Egypt and Morocco. In Egypt, SDX has a 50% interest in two producing assets, the North West Gemsa and Meseda. In conjunction, the Company controls 75% of the Sebou concession in Morocco. Overall, SDX has a combined daily production of 10,278 barrels of oil equivalent per day (boe/d).
- Market Cap: $168 Million
- Month over Month Return: -11.8%
- Enterprise Value to EBITDA (NTM): 2.6x
- Peer Average EV/EBITDA (NTM): 6.1x
Perpetual Energy Inc. (TSX:PMT) – $1.00
Oil & Gas Exploration and Production
Perpetual Energy is a Canada-based company focused primarily on natural gas in Alberta. However, the Company’s portfolio includes a variety of properties that host heavy oil, bitumen and liquids rich-natural gas. Perpetual’s daily production averages 10,300 boe/d.
- Market Cap: $60 Million
- Month over Month Return: -14.5%
- Enterprise Value to EBITDA (NTM): 2.7x
- Peer Average EV/EBITDA (NTM): 6.1x
Frontera Energy Corp. (TSX:FEC) – $37.00
Oil & Gas Exploration and Production
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. Frontera has set an average production guidance for 2017 at 70,000 to 75,000 boe/d.
- Market Cap: $1,852 Million
- Month over Month Return: -6.3%
- Enterprise Value to EBITDA (NTM): 3.0x
- Peer Average EV/EBITDA (NTM): $ 6.1x
Chinook Energy Inc. (TSX:CKE) – $0.26
Oil & Gas Exploration and Production
Chinook Energy is an exploration and production company with properties concentrated in Western Canada. Chinook’s main producing assets include its Montney rights at the Birley site. In addition, the Company’s guidance for 2017 stands at 3,600 to 3,700 boe/d.
- Market Cap: $56 Million
- Month over Month Return: -13.3%
- Enterprise Value to EBITDA (NTM): 3.1x
- Peer Average EV/EBITDA (NTM): 6.1x
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own units in any of the companies mentioned above.
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