Finally! Don't expect a pull back. We're in a breakout from a cup and handle formation in the six month chart.
https://www.financestrategists.com/wealth-management/fundamental-vs-technical-analysis/cup-and-handle-pattern/ Every US$5 increase in Brent at 25,000 bopd adds about US$7 million in cash flow per quarter after royalties and taxes... about CA$10 million per quarter.
With uncertainty eliminated and a clear path ahead, institutions will be adding knowing this is no longer a penny stock under CA$5 that is well below an average EV to EBITDAX of 2 amongst peers as noted in the 2024 Corporate presentation. The industry median is 3.4 according to some sources. Even using an EV to cash flow (CFO) of 2 is still way undervalued.
With EBITDAX of US$400 million and just US$200 million net cash, an EV of US$800 million would be more appropriate, putting Market Cap at US$1 billion.
At US$31 CFO per bbl from latest PR, annual CFO should be close to US$250 million. For an EV to CFO of 2, an EV of US$500 million would make sense... US$700 million Market Cap, close to CA$1 billion. That's conservative using EV to CFO... and that's not including the additional US$5 increase in Brent.
This is an easy double and that's what institutions are looking at. Some big block trades have been showing up on the tape. I would expect more. Daily volume may continue in the millions for a while. Hang on for the ride!