RE:Monday, monday just love that dayThis is undervalued IMO. TVE EV for example is ~$3.3B. IPCO EV is ~$1.5B (I could be wrong, do your own due dligence). When I compare Q1, TVE has almost double the gross profit (TVE is oilier, IPCO is gassier) But by the time I deduct the much higher interest costs and taxes, and adjust for sustaining capex ($6 maybe for IPCO vs at least $18 for TVE), I find that IPCO can generate more cashflow.
Moreover, over the next 4 years, TVE will have to/should spend most of their FCF to repay debt. They may even have to sell some assets which will reduce cashflow. Whereas IPCO being net debt positive (they have LTD but they have equivlent? cash on the balance sheet so that current assets > current liabilities + LTD) will be investing in Blackrod (oil sands) which will add 30,000 boepd of heavy oil production (2027?), and they'll be buying shares back if oil prices cooperate.
Maybe TVE is a bad comparison and keep in mind that IPCO mainly trades in Sweden (volume on the TSX is very low), company is controlled by Lundin family, reporting is hard to follow plus its in USD and the assets are somewhat dispersed.
I believe this will remain undervalued for possibly a few years. But company is well managed financially, assets are generating decent cashflow. But they are indeed investing most/vast majority of the free cashflow in the oil sands (Blackrod*).
* the case for Blackrod is the valuation of what Conoco bought from Total (which Suncor was going to buy but Conoco had a right of first refusal). That was 70,000 boepd net (the other half owned by Conoco to begin with, now they own 100%) for $4B + contingency fees. Implies Blackrod phase I once commissioned could be worth close to C$2B (versus C$1.1B capex).
Warning again, all IPCO figures in their reporting are in USD (even though they trade in Canada and Sweden and don't trade in the US).
E&OE
YMMV.