First stock in the clip. GLTA
https://www.bnnbloomberg.ca/video/brian-madden-s-top-picks~2862194
Tourmaline Oil (TOU TSX) Tourmaline is Canada’s largest natural gas producer, producing 2.3 billion cubic feet per day from Montney, Peace River and Deep Basin fields and another 100,000 barrels of oil and natural gas liquids daily. It is also the fourth-largest midstream Canadian natural gas processor. We expect the company to grow earnings by nearly 20 per cent this year. Warm winter weather has kept natural gas prices low, but the company’s scale, lean operating model and low-cost structure enable strong profitability through the commodity price cycle. The company has recently struck a 15-year contract with Cheniere Energy to liquefy natural gas at Cheniere LNG plants on the Gulf Coast and then export it to Asia where pricing can be 10 times higher.
Also the soon-to-be complete $40 billion LNG Canada export terminal should support structurally stronger demand and higher prices for Western Canadian natural gas. Tourmaline strikes a nice balance between growth and capital discipline. It has production volumes growing at an 18 per cent compound rate over the past five years and a flexible dividend policy that returned $6.55 to shareholders last year – which equates to a 12 per cent yield on today’s share price. It is trading at 5.1 times cash flow, having pulled back 26 per cent from the November high, and we see good value as well as a timely entry point into the shares here.
TOP PICK
Tourmaline Oil Corp(TOU-T)
06/02/2024
Canada's largest natural gas producer, nearly 15% of Canada's NG. Also, they produce 100,000 barrels daily of oil. TOU is a lean, low-cost operator. Warm weather is keeping nat gas prices low this winter, though. They struck a deal with Cheniere to ship their nat gas to the Gulf of Mexico and is shipped to Asia to fetch higher prices (10x higher). Including special dividends, their yield totals 12%. Also, LNG Canada will open next summer on the west coast which should boost demand for Canadian nat gas.
(Analysts’ price target is $78.96)
Oil / Gas
Brian Madden
$54.970
Owned