Monday, January 17, 2011

January Update for the Key Fundamental Statistics for the Oil and Gas Industry in Canada

Provided below are some of the Key Fundamental Statistics for the Oil and Gas Industry in Canada. These numbers are an update of my original article that can be referred to here. I recommend that you read that one to give this information some context. This article mainly focuses on producers or companies very near production. Referring to the margin statistic, investors in ALE learned a tough lesson this week that there is a lot of risk involved with companies that have very bad current margins and are burning a lot of cash. Investors in OPC have been learning that for months now.

The two stocks that I own on this list are Compton Petroleum and Petrolifera Petroleum. Compton once again dominates this list, mostly because its stock price has been down in the dumps while other oil and gas companies increase. I'm resigned to the fact that it looks like CMT will struggle for a long time but I am confident that the stock will once again regain form and be a $10 stock. Even at this low natural gas price, Compton's profit margin is only -2.5%. Once people realize that natural gas isn't like sugar and that its a valuable energy source, demand will outstrip supply and the new, leaner Compton will be making much more profit than it ever did when the stock was at $14 It just may be a few years from now.

PDP on the other hand has woken up from its slumber this week. Makes sense as it is far undervalued compared to South American peers like GTE. GTE's market cap is almost 20 times that of PDP's and it certainly does not have 20 times more worth in reserves. GTE in 2009 is where PDP will be in terms of production relative to company size in 2012 and you'll see the stock price rise accordingly.

Refer to the following reports from Jennings Capital to compare the two. You will need to create a Jennings Capital username and password to see them (its free):

PDP
GTE

While GTE is unquestionably better off, it is not 20 times better off than PDP and while GTE is pretty close to full value, there's a ton of unrecognized value in PDP's current share price. All because of the market's doubt in Richard Gusella's ability to get a deal done to start up Petrolifera's Peruvian land holdings. Click here if you are interested in further in-depth analysis of the oil and gas sector.

The 25 TSX-listed companies included in this ranking are as follows:

Advantage Oil and Gas Ltd - AAV
Alange Energy Corp - ALE
Alberta OilSands - AOS
Bankers Petroleum Ltd - BNK
Canacol Energy Ltd - CNE
Canadian Natural Resources Ltd - CNQ
Compton Petroleum Corp - CMT
Connacher Oil and Gas Ltd - CLL
EnCana Corp - ECA
Gran Tierra Energy Inc - GTE
Ivanhoe Energy Inc - IE
Nexen Inc - NXY
Opti Canada Inc - OPC
Orleans Energy Ltd - OEX
Pacific Rubiales Energy Corp - PRE
PetroBakken Energy Ltd - PBN
Petrolifera Petroleum Ltd - PDP
Petrominerales Limitada - PMG
Questerre Energy Corp - QEC
Rock Energy Inc - RE
Strategic Oil & Gas Ltd - SOG
Talisman Energy Inc - TLM
Terra Energy Corporation - TT
Transglobe Energy Corp - TGL
Vero Energy Inc - VRO


Price to Earnings

ECA.........11.0
PMG........15.7
CNQ........17.6
NXY.........20.9
Industry...25.2
TGL.........30.9
GTE.........36.6
TLM.........47.7
PBN.........47.8


The companies not listed do not have positive earnings at this time.


Price to Sales

CMT..........0.5
OPC .........0.9
CLL...........1.1
PDP..........1.6
TT.............1.7
NXY..........2.0
ECA..........2.2
RE............2.7
VRO.........2.8
TLM..........3.4
OEX..........3.5
AAV..........3.5
CNQ.........3.6
PMG.........4.2
Industry...4.4
PBN.........4.8
ALE.........5.2
GTE.........5.5
PRE.........5.8
TGL.........6.8
BNK.......16.2
CNE.......18.6
SOG.......19.3
AOS.......22.3
QEC.......35.0
IE ..........45.7



Price to Book

CMT........0.1
OPC........0.2
PDP........0.4
ALE.........0.8
CLL ........0.9
OEX........0.9
TT...........1.0
AAV........1.0
AOS........1.0
PBN........1.2
ECA........1.3
VRO........1.3
NXY.........1.5
RE...........1.5
QEC........1.6
TLM.........2.0
CNQ.........2.1
GTE.........2.5
IE ............3.1
Industry...3.2
SOG .......3.8
PRE........4.4
TGL.........4.8
BNK........6.2
CNE........7.2
PMG........7.3



Price to Cash Flow

CMT...........2.4
TT..............4.3
NXY...........5.0
PDP..........5.4
VRO..........5.9
AAV..........6.2
TLM...........6.7
PBN..........6.8
RE............7.0
CNQ..........7.2
ECA..........7.8
GTE..........10.7
PMG.........11.7
Industry...12.1
OEX.........12.4
PRE.........13.2
CLL .........13.9
TGL..........21.3
BNK.........34.3
QEC.........93.0



Profit Margin

PMG........23.76%
ECA........16.47%
CNQ........15.58%
NXY.........9.95%
PBN.........9.13%
Industry...6.16%
CLL .........6.26%
GTE.........5.31%
TT............0.03%
BNK........-0.23%
CMT........-2.53%
TGL.........-8.54%
TLM........-11.11%
PDP........-15.09%
RE..........-15.35%
PRE.......-24.03%
AAV.......-24.23%
VRO.......-31.92%
OEX.......-49.56%
QEC......-114.82%
ALE.......-138.51%
AOS......-150.25%
IE .........-159.65%
SOG......-170.42%
CNE......-209.05%
OPC......-212.85%


Disclaimer: The source of my information is TD Waterhouse Market Research services as of January 15, 2011. I own positions in Petrolifera Petroleum and Compton Petroleum.

Click here to see some information on three Canadian oil resource stocks with tremendous potential

Click here to learn how to trade the forex market 


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4 comments:

  1. Dear EV38 - Do you have any news on CMT - falling in the begining of March. I am a real time Compton holder and I do like it same as you (plan to hold it, hold and hold). Any news on the sudden fall in March or is it just a market play? Thanks for any nes and thanks again for your GAS&OIL industry updates. Love it

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  2. I meant if you know something more than the released results for Q4 2010 and 2010...

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  3. I wish I had some secret good news on this thing. Unfortunately I don't. I still think it's a great play however. It's not at all like OPC which has a lot more debt and burning cash much faster than CMT. Remember, CMT is cash flow positive. It's only their capex that causes them to burn cash. If they chose to slow down capex on their nat gas properties and focus it all on their oil ones, their stock price would probably rise a lot before their cash flow from nat gas operations died down from lack of capex. They could then finance at a much better price than today. Of course I'm not running the company so who knows what they are thinking. But in my opinion they have to either operate as an oil exploration company or a profitable nat gas company. Both types of companies are valued much higher than they are in the market. #2 is somewhat out of their control so they should focus on #1, instead of trying to do both which is getting them nowhere.

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  4. Interesting and I think focusing on oil is what should be good for CMT too - more today with unstable middle east and conflict in Lybia. On the other hand what could be positive for NG is a fact that Japanese tragedy and nuclear problems could lead the way to possibly more natural gas consumption for electricity manufacturing.
    Thanks EV38.
    Turbulent times we are facing anyway. Big risk but big potential.

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