Following along with the insiders and just added a few more at $62.50. GLTA
Morning Report: Tourmaline Oil insiders bet on a happy LNG new year
January 5, 2023
Yesterday, 32 companies had insider buy filings and 9 companies had insider sell filings.
With oil & gas prices selling off in the early days of 2023, we return to the Energy sector to see what insiders are making of the situation. As we wrote in our recent Canadian and US market updates, insider sentiment is jumping. In fact, the INK Exploration & Production Indicator stands at 154%, meaning there are more than 1.5 stocks with key insider buying over the past 60 days for every one stock with key insider selling. At the end of 2021, the indicator was at the same level, but share prices in the sector were significantly lower. In our view, the resurgence of the indicator suggests that the sector's fundamental outlook has improved over the past year and the current pullback represents an opportunity for energy bulls.
Tourmaline Oil (TOU) is one example where we have seen insider buying as share prices tumbled. Tourmaline is down 13.6% since we last featured it here on August 4th and down 19.4% over the past 30 days due to sector weakness. After the drop, investors have factored in a lot of gloomy days ahead for the company. TOU is trading with a trailing 12-months P/E of 4.9 and a price-to-cash flow ratio of 4.0. However, some factors might help support the stock's sunny INK Edge outlook. Based on Q3 guidance, average production for 2023 is expected to be about 545,000 barrels of oil equivalent per day (77% natural gas). That is up from 481,897 average boe/d in Q3. Moreover, about 5.6% of expected daily natural gas production is now destined for the US Gulf Coast via a long-term deal with Cheniere Energy (Sunny; LNG). That provides Tourmaline with exposure to international LNG pricing. Looking further ahead, TOU is shooting for an average production of 700,000 boe/d in 2028 after completing both phases of the North Montney Conroy, BC development which is positioned to tap into LNG Canada export opportunities.