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Bullboard - Stock Discussion Forum 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... see more

TSX:TPZ - Post Discussion

Topaz Energy Corp > From Scotia this Morning $24.00 Target
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Post by savyinvestor333 on Jul 30, 2021 7:29am

From Scotia this Morning $24.00 Target

Topaz Energy Corp. Oil Growth Drives Q2/21 Beat

OUR TAKE: Positive. TPZ delivered strong Q2/21 results with higher-than-expected oil royalty volumes driving EBITDA and Adjusted Funds Flow (AFF) beats. With the company poised to once again hold a GORR on substantially all acreage and production owned by Tourmaline Oil Corp. (TOU-T; SO), we expect TPZ to shift its focus to acquisitions from additional high quality counter-parties. Looking ahead, we see TPZ benefiting from its exposure to organic royalty production growth on the TOU asset base and its non-TOU Clearwater and Charlie Lake assets and additional acquisitions facilitated by its low cost of capital. We believe that TPZ offers a compelling investment case given its: (1) strong upstream and midstream asset base; (2) top-tier free cash flow conversion profile and dividend growth potential (demonstrated by the recently announced 5% dividend bump); and (3) emerging position as the financial partner of choice for quality E&Ps in a capital constrained market. We maintain our Sector Outperform rating and $24.00 per share Target Price.

KEY POINTS Oil growth drives Q2/21 beat. Royalty production of 12.3 mboe/d (89% gas) was in line with expectations; however, liquids volumes came in ~7% ahead of the Street on higher heavy oil volumes. As a result, EBITDA and AFF per share both beat consensus forecasts (see Exhibit 1). TPZ converted ~91% of its revenue into free cash flow (vs. ~90% in Q1/21) and the company paid ~$25.7M in dividends during Q2/21, resulting in a simple payout ratio of ~69% (up from ~65% in Q1/21)
Comment by Mapleleaf57 on Jul 30, 2021 8:16pm
I dont get it,, $15.97
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