Monday , 23 October 2017


These 5 Stocks Could Power Higher With Higher Crude Oil Prices

A common term used in the oil and gas industry is netback, which refers to theoil-price-rise revenue of one BOE (barrel of oil equivalent) after all the costs associated with bringing one unit of oil to the market. In short, netback is the profit per barrel of oil. Today we have identified five TSX oil stocks that have industry-leading netbacks of above $25, and could power even higher with increasing crude oil prices.

The comments above & below are edited ([ ]) and abridged (…) excerpts from the original article by SmallCapPower.com

With the oil price hitting a one-month high on Thursday after industry figures showed a draw in U.S. stockpiles, we examine those oil producers that have the lowest production costs per barrel of oil. The lower the cost to extract oil, the higher the operating cash flows a company generates.

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1. Spartan Energy Corp. (TSX: SPE)
Oil & Gas Exploration and Production

Spartan Energy Corp, formerly Alexander Energy Ltd., is a Canada-based oil and natural gas exploration and production company with producing properties focused in Saskatchewan…

  • Market Cap: $1,059.4 million
  • Revenue (NTM): $346.0 million
  • EV/EBITDA (NTM): 7.0x
  • 2017E Netback ($/BOE): $27.04

2. Bonterra Energy Corp. (TSX: BNE)
Oil & Gas Exploration and Production

Bonterra Energy Corp. (Bonterra) is an oil and gas company that is focused on the development of its Cardium land within the Pembina and Willesden Green areas located in central Alberta. Bonterra’s oil and natural gas properties yielded average production is 12,650 barrels of oil equivalent (BOE) per day.

  • Market Cap: $579.4 million
  • Revenue (NTM): $186.0 million
  • EV/EBITDA (NTM): 7.3x
  • 2017E Netback ($/BOE): $26.44

3. Freehold Royalties Ltd. (TSX: FRU)
Oil & Gas Exploration and Production

Freehold Royalties Ltd. is a Canada-based company engaged in the development and production of oil and natural gas, predominantly in western Canada. The Company’s total land holdings encompass approximately 3.7 million gross acres, over 90% of which are royalties. Of this, its mineral title lands (including royalty assumption lands), which it owns in perpetuity, cover approximately 750,000 acres. It also has interests in over 36,000 wells (of which over 34,000 are royalty wells, including over 18,000 unitized wells).

  • Market Cap: $1,193.2 million
  • Revenue (NTM): $126.1 million
  • EV/EBITDA (NTM): 12.3x
  • 2017E Netback ($/BOE): $28.77

4. Parex Resources Inc. (TSX: PXT)
Oil & Gas Exploration and Production

Parex Resources, Inc. is a Canada-based oil and gas company engaged in crude oil exploration, development and production in Colombia. The Company, through its foreign subsidiaries, holds interests in onshore exploration and production blocks totaling approximately 1,870,120 gross acres. The Company’s annual oil production is approximately 27,430 barrels per day.

  • Market Cap: $1,989.7 million
  • Revenue (NTM): $691.4 million
  • EV/EBITDA (NTM): 5.0x
  • 2017E Netback ($/BOE): $26.38

5. Whitecap Resources Inc. (TSX: WCP)
Oil & Gas Exploration and Production

Whitecap Resources Inc. is a Canada-based oil-weighted growth company focused on its existing assets in British Columbia, and Alberta enhanced by oil-based acquisitions…

  • Market Cap: $2,838.3 million
  • Revenue (NTM): $770.1 million
  • EV/EBITDA (NTM): 7.2x
  • 2017E Netback ($/BOE): $25.90

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