Bodes Well For Non-Reporters: Baytex Energy, CES Energy, TriCan Well Service
Baytex Energy BTE, a western Canada/U.S. driller-producer, as all of these are, reports after the close today-Thursday. The others report next week. Crescent Point Energy CPG just reported sales growth to $1 billion from $970 million a year earlier, albeit an asset-sale-linked loss for the quarter.
Yogi Berra‘s supposed maxim, “The future ain’t what it used to be,” at some point will factor for the “renewables,” perhaps slimming perpetually booming crude oil prices; but Yogi also could say that ain’t happening for a spell.
TCRs, most of the oil-gas-cos in this report are based in Alberta, in Calgary — a crux of oil and gas services and corporate HQs.
Carbon-based energy, as we know (or think we know), is still the future, at least for another decade worldwide.
[Among my energy-light holdings, I own Baytex, CES, TriCan Well Services — they trade in Toronto and in some cases, on NYSE: BTE, CEU CESDF, TCW TOLWF. I am looking at primary nat-gas producer Petrus Resources PRQ PTRUF, one of the tiny ones at $150 million market value. I also thankfully own DHT Maritime Holdings DHT, a European very-large-crude carrier.]
Energy services and drillers look expensive when you see the multi-billion-dollar market caps and stock charts of several of these. See chart below please.
Still, most also are reducing debt and-or building cash. Crescent Point‘s net debt came in at $2.9 billion for the just-reported quarter, a drop of $125 million. [I am thinking about buying some CPG for, as stated, a collection of holdings that is energy light when stacked against the metals equities we own here at home.]
All of the Alberta-area producer-explorers are growing BOE/d (barrels of energy-equiv. per day). The leaders in Canada on that score include Cenovus Energy, Canadian Natural Resources, which just reported numbers, and Suncor.
Some are buying other driller-explorers (Baytex’s purchase of Ranger Oil this year) or shedding oil-gas fields that do not “fit” (Crescent Point Energy CPG ditching of a Dakotas property for $500 million this summer).
Once a Bakken oilfields leader, Crescent Point‘s strategy of shifting to Alberta-area nat-gas exploration looks like a good case study for this year and next. See image please above.
Most are seeing reduced operating costs tied to equipment for testing prospective wells and producing oil-gas. Most are increasing free cash flow, buying back shares, increasing dividends and-or directing more cash or equity to shareholders. All are booking sales growth as a beneficiary of the steadily higher oil prices.
Earlier Thursday: Canadian Natural Resources CNQ in its just-reported quarter showed “significant” free cash flow, an increasing dividend and share repurchases. See report please.
Cenovus Energy’s CVE quarterly profit gained with greater output for Q3.
Let’s see how Baytex, CES, Trican and Petrus come in with their numbers as soon as this Thursday afternoon and into next week. As I said, just added some Baytex and some Crescent Point.
— Thom Calandra
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Thom Calandra is a writer and an investor. Research and material are meant as editorial opinion. He is not a professional investment adviser. Please do not consider his reporting as a recommendation to buy or sell securities.