4 Small Cap Oil Stocks Trading at a Production Discount

The small cap oil stocks on our list could be undervalued based on their oil output

SmallCapPower | February 22, 2018: The S&P Global Oil index has declined 11% from its peak in January, and WTI oil prices have gone down 7%, due to increased global inventories and production. The small cap oil stocks on our list today have strong oil production relative to their enterprise value, averaging 36,000 EV/boe/d, compared to their peers, which average 190,000 boe/d.

Frontera Energy Corp. (TSX:FEC) – $43.50
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. FEC aims to renegotiate contracts, conduct further exploration, and optimize their portfolio.

  • Market Cap: $2,190.2 Million
  • 3 Month Total Return: 16.0%
  • EV / Oil Production per day: $21,627

Obsidian Energy Ltd. (TSX:OBE) – $1.27
Oil & Gas Exploration and Production

Obsidian Energy is a Canada-based oil producer operating in Alberta. The Company operates ~1600 sections over four areas. Obsidian is guided to produce 30,000 boe/d in 2018.

  • Market Cap: $640.5 Million
  • 3 Month Total Return: -20.6%
  • EV / Oil Production per day: $32,096

Gear Energy Ltd. (TSX:GXE) – $0.74
Oil & Gas Exploration and Production

Gear Energy is an oil-focused producer with assets in Canada. The Company’s focus lies in exploration and production at properties in Alberta and western Saskatchewan. Combined, Gears operations contribute an average production of ~7,300 boe/d (86% liquids).

  • Market Cap: $145.3 Million
  • 3 Month Total Return: -9.8%
  • EV / Oil Production per day: $43,235

BlackPearl Resources Inc. (TSX:PXX) – $1.12
Oil & Gas Exploration and Production

BlackPearl is an oil producer operating in Western Canada. The Company’s flagship asset, the Onion Lake operation, is guided to produce 11,000 – 12,000 boe/d in 2018. The Company plans to expand at another asset, the Blackrod operation, which could produce up to 100,000 boe/d when fully operational.

  • Market Cap: $379.2 Million
  • 3 Month Total Return: 3.7%
  • EV / Oil Production per day: $45,283

Disclosure: Neither the author nor his/her family own shares in any of the companies mentioned above.

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