Tourmaline Oil Corp (Alberta) T.TOU

Insider Buying

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Morning Report: Insiders at natural gas producers buy the pullback 

December 20, 2021

During market turbulence, we are always on the lookout for stocks where insiders are buying as share prices drop. Today, we focus on two situations in the Energy sector where insiders were buying last week. Both companies also have the distinction of being in the sunny INK Edge category, meaning they rank well not only based on insider commitment, but also when both value and price momentum are considered. They both have significant exposure to natural gas production in western Canada.

Tourmaline Oil (TOU) CEO Mark Rose was buying on Friday as the stock dropped to lows not seen since early fall. When the company reported Q3 results on Nov. 3rd, average production for the quarter was 456,489 barrels of oil equivalent (boe/d), 78.4% weighted to natural gas. Thanks to rallying commodity prices and rising production, Tourmaline's 12-months trailing cash flow per share has soared from $3.44 a year ago to $8.89 as of Q3. The company expects production growth to continue with 2022 average production estimated between 500,000-510,000 boe/d.

When Montney formation focused ARC Resources (ARX) reported Q3 results on Nov. 4th, average production was 353,657 boe/d, 49.3% weighted to natural gas and natural gas liquids. Trailing 12-months cash flow per share has also been on the rise, coming in at $2.05 versus negative a year ago. For 2022, ARX expects to produce between 335,000 and 350,000 boe/d. Last week an insider was buying the dip for his retirement and brokerage accounts.