The TSX oil stocks on our list are trading below their intrinsic value
SmallCapPower | May 29, 2017: Oil prices have taken a hit this past week following an OPEC led decision to extend production cuts. OPEC and other producers pledged to extend a production cut of ~1.8 million barrels per day until the end of Q1/2018. Furthermore, many traders, including Goldman Sachs, have a bearish view on the commodity, claiming that oil could slump into 2018. Nonetheless, if you are a long-term investor with the view that OPEC’s production cuts will eventually satisfy the market, it is worthwhile to look at these five TSX oil stocks and related companies. The companies we identified are all trading well below their intrinsic value, according to data from Thomson Reuters. The price to intrinsic value rank is based on models from Thomson Reuters, with 100 representing the best possible value and 1 representing the worst.
High Arctic Energy Services Inc. (TSX: HWO) – $5.16
Oil Related Services and Equipment
High Arctic Energy Services Inc. is a Canada-based company, which focuses on providing contract drilling, completion services, equipment rental and other oilfield services to the oil and gas industry. The Company operates through providing oilfield services to customers in Canada and Papua New Guinea (PNG) segment. In PNG, the product line consists of contract drilling services, workover services and equipment rental including rig mats, cranes and oilfield related equipment. In Canada, the product line consists primarily of snubbing services and the supply of Cryogenic Liquid Nitrogen Pumping Services and equipment rentals.
- Market Cap: $274,749,561
- Total Revenue (LTM): $208,000,000
- Debt to Equity: 11.2%
- YTD Price Change: -2.6%
- Price to Intrinsic Value Rank: 100
TerraVest Capital Inc. (TSX: TVK) – $9.36
Oil Related Services and Equipment
TerraVest Capital Inc. is a Canada-based holding company, which is focused on acquiring businesses. The Company’s segments include Fuel Containment, Fabrication and Service. The Fuel Containment segment is a manufacturer of items, such as propane vessels, pressure vessels, commercial and residential liquid containment units, as well as bulk propane trucks (which are primarily steel-based) for the North American market. Through its fabrication segment, it fabricates oil and gas wellhead processing equipment, through its subsidiaries TerraVest Industries Limited Partnership (RJV), NWP Industries LP (NWP) and EnviroVault Limited Partnership (EnviroVault) for the oil and natural gas industry in North America.
- Market Cap: $171,729,632
- Total Revenue (LTM): $178,513,000
- Debt to Equity: 60.1%
- YTD Price Change: 5.2%
- Price to Intrinsic Value Rank: 94
Painted Pony Energy Ltd. (TSX: PONY) – $5.26
Oil Related Services and Equipment
Painted Pony Energy Ltd, formerly Painted Pony Petroleum Ltd, is a Canada-based natural gas company. Its principal business activity is the exploration, development and production of petroleum and natural gas resources in western Canada. It is focused on the development of natural gas and natural gas liquids from the Montney formation in Northeast British Columbia. It has approximately 220 net sections of working interest Montney rights, which contains over 300 meters (approximately 1,000 feet) of over-pressured, gas-saturated pay. Its working interest, contiguous land block covers over 139,000 net acres of Montney rights. Its Montney gas is used for liquefied natural gas (LNG) exports.
- Market Cap: $851,558,443
- Total Revenue (LTM): $63,156,000
- Debt to Equity: 89.8%
- YTD Price Change: -43.0%
- Price to Intrinsic Value Rank: 91
Canacol Energy Ltd. (TSX: CNE) – $4.01
Oil & Gas Exploration and Production
Canacol Energy Ltd. is a Canada-based oil and gas exploration and production company engaged in petroleum and natural gas exploration and development activities in Colombia and Ecuador. It owns approximately 0.5% interest in Oleoducto Bicentenario de Colombia (OBC), which owns a pipeline system that focuses on linking Llanos basin oil production to the Cano Limon oil pipeline system. It has reserves of approximately 79 million barrels of oil equivalent, which includes dry natural gas. Its production primarily consists of natural gas from its Nelson, Palmer and Clarinete fields in the Lower Magdalena Basin in Colombia; crude oil from its Leono, Labrador, Pantro, Tigro and Maltes fields in the Llanos Basin in Colombia, and tariff oil from the Ecuador IPC.
- Market Cap: $703,142,241
- Total Revenue (LTM): $198,743,855
- Debt to Equity: 75.5%
- YTD Price Change: -12.4%
- Price to Intrinsic Value Rank: 87
Granite Oil Corp. (TSX: GXO) – $5.07
Oil & Gas Exploration and Production
Granite Oil Corp., formerly DeeThree Exploration Ltd., is a Canada-based oil producer based in Calgary, Alberta with lands and operations located in southern Alberta. The Company is engaged in the exploration for and exploitation, development and production of oil and natural gas. Its Alberta Bakken Properties are located in southern Alberta, approximately 70 kilometers south of Lethbridge. This property consists of an average working interest of approximately 100% in over 393,453 gross (391,633 net) undeveloped acres and approximately 54,434 gross (52,140) net developed acres. The Alberta Bakken Properties include approximately 60 gross (61.4 net) oil wells and over 140 gross (138.16 net) gas wells.
- Market Cap: $170,922,283
- Total Revenue (LTM): $33,636,000
- Debt to Equity: 13.0%
- YTD Price Change: -13.9%
- Price to Intrinsic Value Rank: 84
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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