Global Energy Best Ideas Obsidian Energy Ltd. was added to RBC’s “Global Energy Best Ideas List” on Monday.
“We are adding Obsidian Energy to the Global Energy Best Ideas list on the back of the company’s differentiated growth model led by Peace River heavy oil; existing Bluesky development spans only 34 sections to date relative to roughly 500 sections held in the Peace River region,” said analyst Luke Davis. “Management’s recent Peace River update has outlined a path to 50,000 boe/d [barrels of oil equivalent per day] by 2026 (annualized 16 per cent/25 per cent CAGR [compound annual growth rate] for total volumes/liquids), with a long runway for opportunity while being internally funded. We believe the company’s growth orientation while focusing on operational sustainability, cash cost improvements, debt reduction, and NCIB activity, positions the company favourably to narrow the current valuation gap.”
Mr. Davis has an “outperform” recommendation and $14 target for Obsidian shares. The average on the Street is $13.10.
Norway’s Aker Solutions ASA was also added to the list, which now consists of 21 equities and rose 1 per cent in September.
Other TSX-listed stocks are: Suncor Energy Inc. , Topaz Energy Corp. , ARC Resources Ltd. , Tourmaline Oil Corp. , Canadian Natural Resources Ltd. , AltaGas Ltd. , Pembina Pipeline Corp. and Superior Plus Corp.