Building an investment caseI been picking off shares on the CAD side for a bit and before I commit to a larger spot I ran a comparsion to a very similar sized company many of you may be familair with: OBE
Both companies are listed US/CAD sides and are actually very close in size. Up here in Alberta OBE comes up in conversation alot as a undervalued solid pick to choose if wanting exposure to an oil stock. I guess I would agree that it could be. I went to GTE instead for a bit. Here are the numbers:
All $ values have been converted to USD
GTE EV= $747M- WINNER GTE
OBE EV= $788M
GTE FY22 FCF= $129M- WINNER GTE
OBE FY22 FCF= $86M
GTE 1P MMBOE= 84- WINNER GTE
OBE 1P MMBOE= 76
GTE 23 GUIDED CAPEX= $210-250M
OBE 23 GUIDED CAPEX= $191-198M- WINNER OBE
GTE 23 GUIDED PRODUCTION= 32-34K BOE 100% BRENT OIL c/w heavy discount - WINNER GTE
OBE 23 GUIDED PRODUCTION= 32-33.5K BOE >66% WTI OIL
GTE 23 GUIDED FCF= $65M
OBE 23 GUIDED FCF= $77M- WINNER OBE.--- This line is what the market cares about most and I need to figure out how this is possible for OBE to beat GTE. My bet is that GTE meets targets, will OBE?
Both Co's say they are commited to full use of a NCIB in 23
Clearly there are risks to something crazy happening in Columbia and the effect that can have will hang on the GTE price. Canada isn't completely risk free either particularly if the crazy NDPers end up being elected in AB and issues again with heavy discounts or AECO disruptions
Feel free to poke holes in any of this