Deeply Discounted Gas Producer with Oil Upside
This stock trades at a fraction of its reserve value with a new oil development approach showing early success.
Oil prices are down, and some oil stocks are down even more. While many have sold their oil stocks - and so many speculators have shorted oil that net speculative positioning in Brent oil has gone negative! - I’ve been shopping for mispriced oil & gas stock opportunities. And I found one!
I found a small cap oil & gas producer that has multiple paths to success. Two catalysts could re-rate this company’s stock, presenting potential multi-bagger upside in their shares - even if oil prices don’t rise from here!
The first catalyst is from continued success in the company’s new oil development, where it has achieved improving well results, with a deep inventory of remaining locations. The market is not pricing in the upside potential from this company’s strong oil well results. If the good results continue, or if they get even better, or if oil prices move back higher from here, this company’s stock price could soar.
The second catalyst is improved local natural gas pricing. The AI power theme and LNG export buildout have taken a backseat to oil market news recently, but they are picking up steam. There are a wave of proposed data center loads and behind-the-meter power projects emerging in the company’s home gas market, and enormous growth in LNG export capacity in North America over the next few years. Since most of this company’s production is natural gas, it is well positioned to benefit from these trends.
The company currently trades at a very low valuation, and either or both of these two catalysts could lead to a valuation multiple re-rating and multi-bagger upside for the stock:
In this article, I’ll review these two catalysts in more detail, along with the key risks that I see. This is the sixteenth idea that I’ve written about here on Bison Insights, with most of the others doing very well since I first wrote about them, leading to outperformance of the Bison Insights Idea Composite since publication:
For a full list of the stocks and related securities I’ve written about so far, along with updates on those ideas, expert interviews (including in some cases with executives at the companies I write about), and broader macro commentary, you can access the Bison Insights Article Directory.
Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence. Past performance is not indicative of future results.
