The Canadian oil and gas stocks on our list could continue to see strong returns should the rally in crude become prolonged
SmallCapPower | April 25, 2018: Oil prices have reached their highest point since late 2014, with WTI crude oil rising from US$63/barrel to US$69/barrel MTD, up from US$60/barrel at the start of the year. The Trump administration is widely expected to place further sanctions on Iran after May 12, when U.S. President Trump is expected to recertify the Iran deal. The Canadian oil and gas stocks on our list today have seen strong returns over the past week and month, driven by a rising oil price. Of our five selected stocks, the average return is 18% over the past week and 31% over the past month, outperforming the TSX, which returned 2% over the same periods.
Baytex Energy Corp. (TSX:BTE) – $5.16
Oil & Gas Exploration and Production
Baytex Energy is a Canada-based oil producer operating in Alberta and Texas, producing 51% of its oil from its Eagle Ford asset in Texas and the remainder from its Peace River and Lloydminister heavy oil fields. The Company is guided to produce 68,000-72,000 boe/d at 80% oil and liquids. BTE’s assets host reserves of 432 mmboe.
- Market Cap: $1,220.7 Million
- 1 Week Total Return: 21.4%
- 1 Month Total Return: 42.1%
- YTD Total Return: 36.9%
- Forward Price to Cash Flow Per Share FY2018: 3.3x
- Peer Average Forward Price to Cash Flow Per Share FY2018: 5.8x
Bonavista Energy Corp. (TSX:BNP) – $1.56
Oil & Gas Exploration and Production
Bonavista Energy 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 the 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. BNP’s assets produce 72,000 boe/d at 29% oil and liquids, and host reserves of 422.5 mmboe.
- Market Cap: $413.6 Million
- 1 Week Total Return: 20.9%
- 1 Month Total Return: 23.9%
- YTD Total Return: -30.0%
- Forward Price to Cash Flow Per Share FY2018: 1.6x
- Peer Average Forward Price to Cash Flow Per Share FY2018: 5.8x
Athabasca Oil Corp. (TSX:ATH) – $1.59
Oil & Gas Exploration and Production
Athabasca Oil is a Canada-based light and thermal oil producer operating in Alberta. The Company aims to maintain its Montney light oil asset and expand its Duvernay light oil asset through a JV with Murphy Oil (NYSE:MUR). The Company also plans to maintain its Leismer thermal oil and ramp up production at its Hangingstone asset. In total, the Company produces ~40,000 boe/d at 90% oil and liquids, with ~1,250 mmboe in reserves.
- Market Cap: $817.2 Million
- 1 Week Total Return: 16.9%
- 1 Month Total Return: 42.0%
- YTD Total Return: 48.6%
- Forward Price to Cash Flow Per Share FY2018: 5.7x
- Peer Average Forward Price to Cash Flow Per Share FY2018: 5.8x
Cardinal Energy Ltd. (TSX:CJ) – $5.34
Oil & Gas Exploration and Production
Cardinal Energy is a Canada-based oil and natural gas company operating in Alberta and Saskatchewan. The Company operates 2,452 producing oil wells and 192 natural gas wells across its seven operating areas, which produce a total of 18,700 boe/d. CJ’s assets host 85,000 Mbbls of crude oil and 80,000 MMcf of natural gas.
- Market Cap: $608.7 Million
- 1 Week Total Return: 16.3%
- 1 Month Total Return: 21.3%
- YTD Total Return: 7.5%
- Forward Price to Cash Flow Per Share FY2018: 4.6x
- Peer Average Forward Price to Cash Flow Per Share FY2018: 5.8x
Crew Energy Inc. (TSX:CR) – $2.63
Oil & Gas Exploration and Production
Crew Energy is a Canada-based oil and gas company operating in Western Canada. The Company’s Montney asset in northern BC represents ~1/3 of the province’s natural gas reserves in a siltstone formation, while its Lloydminster asset in Alberta/Saskatchewan is considered a more conventional heavy oil/natural gas asset. The Company is guided to produce ~2,400 boe/d in 2018.
- Market Cap: $395.5 Million
- 1 Week Total Return: 12.4%
- 1 Month Total Return: 27.7%
- YTD Total Return: -16.5%
- Forward Price to Cash Flow Per Share FY2018: 4.4x
- Peer Average Forward Price to Cash Flow Per Share FY2018: 5.8x
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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