Tourmaline Oil Corp (Alberta) T.TOU

Madden Details

[retiredcf]

First stock in the clip. GLTA

https://www.bnnbloomberg.ca/video/brian-madden-s-top-picks~2862194

Tourmaline Oil (TOU TSX)

Tourmaline is Canada’s largest natural gas producer, producing 2.3 billion cubic feet per day from Montney, Peace River and Deep Basin fields and another 100,000 barrels of oil and natural gas liquids daily.  It is also the fourth-largest midstream Canadian natural gas processor. We expect the company to grow earnings by nearly 20 per cent this year. Warm winter weather has kept natural gas prices low, but the company’s scale, lean operating model and low-cost structure enable strong profitability through the commodity price cycle. The company has recently struck a 15-year contract with Cheniere Energy to liquefy natural gas at Cheniere LNG plants on the Gulf Coast and then export it to Asia where pricing can be 10 times higher.

Also the soon-to-be complete $40 billion LNG Canada export terminal should support structurally stronger demand and higher prices for Western Canadian natural gas. Tourmaline strikes a nice balance between growth and capital discipline. It has production volumes growing at an 18 per cent compound rate over the past five years and a flexible dividend policy that returned $6.55 to shareholders last year – which equates to a 12 per cent yield on today’s share price. It is trading at 5.1 times cash flow, having pulled back 26 per cent from the November high, and we see good value as well as a timely entry point into the shares here. 

TOP PICK

Tourmaline Oil Corp(TOU-T)

06/02/2024

 

Canada's largest natural gas producer, nearly 15% of Canada's NG. Also, they produce 100,000 barrels daily of oil. TOU is a lean, low-cost operator. Warm weather is keeping nat gas prices low this winter, though. They struck a deal with Cheniere to ship their nat gas to the Gulf of Mexico and is shipped to Asia to fetch higher prices (10x higher). Including special dividends, their yield totals 12%. Also, LNG Canada will open next summer on the west coast which should boost demand for Canadian nat gas.

(Analysts’ price target is $78.96)

Oil / Gas

Brian Madden

$54.970

Owned

[houbahop]

"Cheniere Energy to liquefy natural gas at Cheniere LNG plants on the Gulf Coast and then export it to Asia where pricing can be 10 times higher." Asia pricing is now 3x higher, same pricing if including transport from Cheniere to JKM. This is today's reality, not rear view mirror! Selling dreams...

[Lupuslupus]

JKM futures pricing for the rest  of this year is between $9.50 - $12.25, so clearly more than 3Xs aeco    also where do you find the processing and transportation costs for Cheniere? i Don't recall seeing this information posted  

[houbahop]

Various costs: Transportation to Cheniere Liquefaction costs Transportation from Cheniere to JKM through Panama canal. Loss of gas during boat transport Re-gasification costs I will let you make your own research on those costs. JKM averages vs HH averages vs AECO averages and  x HH: 2024: $10.50 vs $2.50 vs $2.25  4.2x 2025: $10.90 vs $3.40 vs $3.25  3.2x 2026: $10.23 vs $3.75

[Lupuslupus]

I like how you conveniently edited out of your post that transportation and liquification costs were such that the JKM pricing Tou was getting was negated down to aeco pricing nice try thats why I asked where you got that information from  nevermind, I figured you pulled that out of you where  I never agreed with Madden that pricing (at this point in time) is 10Xs you stated 3 Xs

[houbahop]

And for your information about what is going on with JKM pricing, you might be interested in having a look to JKM futures strip: https://www.barchart.com/futures/quotes/JKM*1/futures-prices Consider this response has courteous. I usually don't respond to insulting messages.

[Lupuslupus]

I know exactly what JKM pricing is - I quoted the range in my comment based on this https://www.cmegroup.com/markets/energy/natural-gas/lng-japan-korea-marker-platts-swap.html#venue=globex your original post stated that Tourmalines JKM pricing is essentially negated by the costs of processing and transportation, Thats why I asked where you found these costs related to gas sold to Cheniere

[houbahop]

And from my understanding, you have absolutely no idea what are the costs of bringing Tourmaline gas to JKM. Am I right? Without this important knowledge, how can you claim TOU is generating big FCF by selling JKM at $10? Easier to bash someone bringing you back to reality than take a few minutes to do your own DD on this. LOL!

[GunnerG]

If you can't provide the message you are whining about, at least provide a name. I know for a fact that I have never made those comments so it must be someone else. You are new to TOU, come to this BB making silly, arrogant comments as if you are this all knowing expert on TOU.  All gas prices are down, including JKM and TTF, thank you for the great insight.  TOU makes about $2

[GunnerG]

You left off the receptionists salary and the phone bill. We had this discussion with you a month ago pointing out you incorrect statements.  Apparently you have decided to ignore facts. Not sure what you are trying to accomplish by bashing a stock I am sure you are not invested in given your comments.

[houbahop]

Dear Mr. Gunner, Since you are accusing me to bash the stock I own in my portfolio, can you provide the fallacies written in my previous post?

[GunnerG]

Well there was the TOU doesn't make money under $15 JKM. Go back and read the rest yourself.