Whitecap Resources (WCP TSX):
It is a premier intermediate oil producer with an attractive 4.2 per cent dividend yield. It has a recent stock overhang from its $1.7 billion XTO acquisition of Montney and Duvernay assets. Insiders have been buying post-deal. The acquisition is highly accretive: 20 per cent to cash flow, production per share and free cash flow with 3-5 years growth for assets going from 32,000 barrels of oil equivalent per day (boepd) to 50,000-60,000 boepd. The market is likely concerned about leverage and implications for return of capital. The projected dividend is increasing by 65 per cent as debt levels come down over the next 12 months. There is an interesting ESG angle, given the carbon capture Weyburn unit (2MM tons) and 3-5MM tons in agreements for the Saskatchewan project.
TOP PICK
Whitecap Resources(WCP-T)
12/07/2022 at 08:00pm
Leveraged to oil. Acquisition was highly accretive. Concern about leveraging up again. Should meet debt targets as long as oil stays above $85, and this goes hand-in-hand with increasing dividend by 65% after 12 months. Plan to double production over 2 years. Yield is 4.32%. (Analysts’ price target is $16.16)
OIL AND GAS (INTEGRATED OILS)
Dennis da Silva
$8.290
Owned