RE:PE Ratiohey pasta, its nice to see that there is at least one person out there who appreciates a VERY LOW P/E and,as you probably know, a +ve P/E for any junior oilco is nearly impossible to find. But, 2!!! The overall market is priced at 20, Shopify (last I looked is over 200), and the next 'best' oilco is 5.
Why such a ridiculously low P/E?
For a number of reasons: the mgmt isn't out to screw the shareholder, for one. They hold more than 8M shares (15%) and operate the company like I would.
Also, the P/E reflects the high recycle ratio which can only be achieved in a core area that has high operating margins and low f&d costs (Chedder/Cow Lake). To do this, they invested heavily in infrastructure last year to ensure low opex. The market doesn't like that in the short term but mgmt is in it for the long haul.
The resulting NAV10(1P) = $10.66 is also ridiculously high and results in a NAV/SP > 10. Ripe for a takeout at $3...duh!
With a P/CF < 1...are you kidding me!
And don't forget the large land spread in the Chedder core area acqired last year at fire-sale prices.
Now that they are back to the 20T fracs, production has passed the 15T speed bump and will kick into high gear. The Edm Lite diff has recently improved from $9US to $5US, the AECO price is holding @ $2, curtailments are not a concern, emulsion trucking is a smart strategy to get around the bottlenecks....and YGR is truly a rare diamond lost in the muck of market sentiment.
So, I think of YGR as an oilco that I would gladly come on staff with no salary and only stock options. I did that back 25 years ago and it financed my retirement. So, a small investment now, when everyone hates junior oilcos, is a smart choice.
Hmm, I just talked myself into doubling down today.