Here's Why You Should Put This Energy Producer on Your Buying Radar
Nathan is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
One of the largest land holders in the Cardium play in Canada is Angle Energy (TSX: NGL). Angle has a significant undrilled inventory on the Cardium formation which is its dominant asset and has provided it with exceptional light oil growth since late 2011. Can you afford to overlook Angle Energy? To find this, you need to dig deeper in this underfollowed company.
The performance of the TSX/S&P Venture Exchange index has been shameful since 2011 as it has lost more than half its value. This index is down from 2,000 to 860 today, while:
1. Almost every stock market in the world is up significantly over the past two years.
2. Both Edmonton Par and AECO prices have risen significantly since last summer.
The TSX/S&P Venture Exchange index is made up of mostly small cap energy stocks. The stock performance of the majority of Canadian oil and gas producers look similar to the performance of the Venture index.
However, Buffett has said that the markets have a tendency to overshoot at both ends. The Canadian market has clearly overshot to the downside, and this is why several Canadian companies have become acquisition targets for several Asian and US-based giants lately. After all, a value investor like myself enjoys going bottom fishing in the Canadian energy patch.
Angle's stock has dropped down to $3.30 today. However, Angle's net asset value is calculated to be approximately $5.70 per diluted share, based on the current net debt.
Moreover, Angle's enterprise value stands at $481 million. The production is 10,850 barrels of oil equivalent per day, or boepd, (56% oil and liquids) and the proved reserves are 32.7 million barrels of oil equivalent, or MMboe, (55% oil and liquids), resulting in $44,330/boepd and $14.71/boe of proved reserves.
Both key ratios are very low compared to the typical trading multiples of its peers as shown at the table below:
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don’t miss out on this timely opportunity; click here to access your report -- it’s absolutely free.
Nathan Kirykos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!