Discounted Gas Producer with Oil Upside - Even Cheaper and Better Now!
New public well data and strong Q2 results.
Early in July, I wrote about a small Canadian oil and gas producer trading at a deep discount to its peers - and to its third party assessed reserve value - due to depressed local natural gas prices and management’s history of overpromising on one of its core assets.
Fully aware of these issues, I’m interested in this company now for the technical improvements they’re making in developing one of its key oil plays, and the potential for reversion to the average value of its comps, which is close to its third-party-assessed reserve value. Early results have been successful, though the market doesn’t appear to be taking notice yet. Continued execution could justify a higher valuation multiple and substantial share price upside:
They have released Q2 results, which came in above expectations, and another month of public well data. In this article, I’ll delve into the updates on each and what they imply for the thesis.
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 may not repeat itself.
