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Topaz Energy Corp T.TPZ

Alternate Symbol(s):  TPZEF

Topaz Energy Corp. is a royalty and infrastructure energy company. The Company is focused on generating free cash flow growth and paying reliable and sustainable dividends to its shareholders, through its strategic relationship with Canada's natural gas producer, Tourmaline Oil Corp. Its asset portfolio is made up of royalty interests across approximately six million gross acres in the Western Canadian Sedimentary Basin (WCSB). Its assets are strategically located throughout Canada's resource plays, including NEBC Montney, Alberta Clearwater, Deep Basin, Peace River (Charlie Lake), Central Alberta, Southeast Saskatchewan and Manitoba. Its segments include royalty production and infrastructure. Its facilities provide services to customers on a fee-for-service basis, including natural gas processing and water usage, storage and disposal. The Company also invests in environmentally responsible oil assets. It also has working interest in the Musreau Facility.


TSX:TPZ - Post by User

Post by Westcoastenergyon Jul 23, 2024 9:55am
154 Views
Post# 36144089

Canaccord reiterates TPZ as one of its top energy picks

Canaccord reiterates TPZ as one of its top energy picksTopaz Energy (TPZ-TSX: C$24.83 | BUY, C$29.00 target, Mike Mueller) We are reiterating our top pick among royalty names with Topaz Energy. Having recently bolstered its infrastructure revenue stream with a $100M acquisition of 50% in WCP's Musreau facility, TPZ continues to differentiate itself in the oil and gas arena. Pro forma the acquisition, revenue generated from its infrastructure assets cover ~45% of its $1.28/share dividend (annualized, yielding 5%). In our view, this provides the foundation for future dividend increases with ~80% of its infrastructure revenue underpinned by fixed take-or-pay contracts and having operating margins of nearly 90% (~89%). We anticipate TPZ will remain active on the M&A front with another potential phase of LNG-related expansion in the basin over the balance of the decade. The company has over $500M of available capacity on its credit facility to continue pursuing both infrastructure deals and incremental royalty assets as producers seek out other avenues to finance growth opportunities. TPZ shares have increased 28% YTD compared to the sector at 17%. TPZ's dividend and our 12-month target price currently imply a total return of 22%. Our target is DCF-based and reflects a 2025E EV/DACF multiple of 13.2x. TPZ currently trades at 11.7x 2025E EV/DACF, in line with the royalty group average of 11.7x.
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