Post by
matt2018 on Jul 30, 2023 7:36am
Appetite for Energy Stocks
Investors seem to be flocking back into energy names after many reporting their Q2 numbers.
Price of oil moving up recently has certainly helped (good timing).
Here's what's interesting, MEG for example, had lowest production numbers in awhile (high planned maintenance), but investors like what they see for the future and stock hit a 52 week high.
CVE & IMO also marched higher with not exactly blow out production numbers either.
What was noticeable in these Q2 reports was that even with the lower production numbers (planned or unplanned) and low price of oil for the Qtr, they made money, hundreds of millions.
I believe the thinking is going fwd, with maintenance behind most, oil demand increasing, potential for even higher Oil price 2nd half, the profit potential is massive.
Perhaps even more than we seen in the last oil price run up as most energy companies were alot more leveraged then and took profits during that period and plowed them to their debts.
The balance sheets for many energy co. have never looked better.
Strange in way to suggest this (considering EV advancemennts & gov't future mandates), but it could be setting up for a very good time to be invested in Oil stocks (if oil price holds $80).
One thing market isn't liking right now is adding to debt for acquisitions even if you get them at a great price.
You will end up in penalty box till you can show decent FCF from those assets.
Look at BTE for example, investors starting to come around to the Ranger Oil acquisition after punishing them mercilessly.