Saturday, March 12, 2011

Q1 2011 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. I have changed the format to group all the stats into one table and provide a ranking of all the stats based on some formulas I've developed. The stats provided are each company's price to earnings, price to sales, price to book value, price ot cash flow and operating profit margin.
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

Since my January update a lot of events have taken place. GTE bought out PDP shortly after I compared the two and how undervalued PDP was. Subsequently, PDP has fallen from one of the most undervalued stocks to just above industry average while GTE has risen to just above industry average. You could gather from this information that the deal was appropriate.

CMT, OPC, ALE and QEC have been hammered since January. The three latter companies have run into financial issues as they have a very highn burn rate seen from their poor margins while CMT took a big hit to their book value thanks to a write-down of their reserves. CMT still heads the undervalued list while OPC jumps to #2 despite their bad margins as their price to book value and price to sales are extremely low.

I continue to remain bullish on CMT despite its stock performance. Although I'm thankful my other positions have made up for this dog, I cannot see how it can be lumped into the same category as OPC when it comes to distressed securities. CMT's debt load is much lower, CMT's burn rate is much, much lower (they're cash flow positive as we see in the table below) and they are operationally independant - OPC is dependant upon Nexen's operation of Long Lake for success. It might be best for CMT to sell as many natural gas assets they have, pay down as much of the debt as possible and focus on their oil assets. Their book value is already at firesale prices, so if they can get better than firesales prices for those assets, the stock price should increase.



Company

P/E

P/S

P/B

P/CF

Margin

Rank

CMT

0.0

0.4

0.1

2.0

-2.53%

557

OPC

0.0

0.3

0.1

0.0

-109.61%

281

TT

0.0

1.5

0.9

3.8

0.03%

144

ECA

15.1

2.4

1.3

9.1

16.90%

122

CLL

0.0

1.2

0.9

14.1

6.26%

121

NXY

23.0

2.3

1.5

5.6

9.88%

120

PBN

42.8

4.3

1.1

6.1

9.13%

103

PMG

15.2

4.0

7.0

11.2

23.76%

102

CNQ

19.1

3.9

2.3

7.8

15.58%

101

PDP

0.0

2.2

0.6

7.2

-15.09%

80

GTE

34.9

5.2

2.3

10.0

5.31%

65

Industry

26.8

4.1

3.2

12.3

1.59%

55

TLM

47.1

3.4

2.0

6.7

-11.11%

53

RE

0.0

3.3

1.8

8.5

-15.35%

35

VRO

0.0

2.5

1.2

5.4

-31.92%

33

AAV

0.0

3.8

1.0

6.8

-24.23%

33

TGL

27.3

5.9

4.2

18.5

-8.54%

21

BNK

0.0

15.6

6.0

33.1

-0.23%

16

PRE

91.8

5.1

3.8

11.6

-24.03%

-4

OEX

0.0

2.9

0.7

10.2

-49.56%

-13

CNE

0.0

16.4

5.6

0.0

-98.18%

-187

QEC

0.0

24.7

1.1

93.0

-114.82%

-201

ALE

0.0

4.9

0.8

0.0

-138.51%

-230

AOS

0.0

18.7

0.8

0.0

-150.25%

-265

IE

0.0

44.8

3.0

0.0

-159.65%

-309

SOG

0.0

18.1

3.5

0.0

-170.42%

-330


Disclaimer: The source of my information is TD Waterhouse Market Research services as of March 12, 2011. I own positions in Gran Tierra Energy and Compton Petroleum.

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