Update from the hydracapital blog Tenaz Energy (TNZ.TO, last at $3.97)
Tenaz’s performance has made it my biggest position by far, and I think it’s still just getting started, so it gets to go first. Speculation continues around when TNZ will do its next deal. There have been rumours that TNZ may be looking at additional assets in the Dutch North Sea, but I would be willing to bet that they have a couple/few parallel processes going at any time. At $4, the company trades at market cap of about $108 million and an EV/CF of multiple of around 1-1.5x depending on whether you want to use 2023 or 2024 numbers at this point. By all measures, TNZ remains remarkably cheap (link to a recent report from Cormark here), particularly given the strength of the team and soundness of the strategy here. I have little new to say, other than I have a lot of patience for TNZ. Both of Mr. Marino’s prior companies were multi-billion-dollar enterprises, so I think there’s a looooong way to go yet given the current market cap and the company’s respect for shareholders when it comes to dilution. I think that TNZ’s acquire-and-optimize M&A business model can work in almost any market tape, and Tenaz’s core competencies should serve shareholders well when it comes to capturing value from the rationalization of international assets by senior companies. I can’t guarantee that TNZ does another deal in Q4, but my gut says they will.