- Tenaz Energy, a profitable microcap oil stock, has announced its 2024 budget and guidance with eyes on exceeding its impressive performance in 2023
- Production guidance for the new year is set at an average of 2,700 to 2,900 barrels of oil equivalent per day (boe/d), a 17 per cent increase from 2023
- The company’s net income for 2023 stands at more than C$23 million through Q3
- Tenaz Energy stock (TSX:TNZ) is up by 74.06 per cent year-over-year and by 39.77 per cent since 2018
Tenaz Energy (TSX:TNZ), a profitable microcap oil stock, has announced its 2024 budget and guidance with eyes on exceeding its impressive performance in 2023.
Production guidance for the new year is set at an average of 2,700 to 2,900 barrels of oil equivalent per day (boe/d), a 17 per cent increase from 2023. The estimate reflects continuing growth at Leduc-Woodbend and flat production at the company’s Dutch North Sea assets.
Tenaz has earmarked C$23 million-C$25 million in drilling and development capital (D&D CAPEX), as well as C$3 million in exploration and evaluation capital (E&E CAPEX) to assess a potential CCS project in the Dutch North Sea.
The 2024 capital program will be focused on continuing rateable organic growth and free cash flow generation, while advancing the company’s acquisition pipeline.
Leduc-Woodbend
The planned D&D CAPEX program is composed of four (three-and-a-half net) wells in the Rex formation at Leduc-Woodbend. Drilling is slated to begin around mid-year with wells tied in for production by the start of Q4 2024.
Management stresses that its Canadian development program is flexible, affording it “several options to scale the program up or down depending on the commodity environment and opportunities to employ capital outside of Canada,” according to Thursday’s news release.
Non-operated Dutch North Sea assets
Regarding its non-operated Dutch North Sea assets, the company intends to use D&D CAPEX for minor additive production activities on operating wells, further studies at the F17 oil development project, and investment in facility-enhancing capital.
L10 CCS project
Project partner Neptune Energy, and other participating partners, will advance the L10 CCS project from the concept select phase into the front-end engineering and design (FEED) phase.
At the end of the FEED phase in 2025, Tenaz expects all partners to be in a position to make a final investment decision (FID).
L10 CCS seeks to store 5 Mton of CO₂ annually, contributing to carbon neutrality in northwest Europe.
Expenditures during FEED are estimated at C$3 million in 2024 and are classified as E&E CAPEX given the absence of an FID.
A year to remember
Tenaz has generated about C$23 million in net income in 2023 thanks to strategic acquisitions and well development, extending its profitability streak to four out of the past five years.
The company reported C$20.9 million in net income in Q3 2023, which is 7x higher than the nearest result over the past five quarters, because of its accretive acquisition of XTO Netherlands.
The new Netherlands assets also contributed to funds flow from operations for the nine months ended Sept. 30 of C$15.5 million, an 188 per cent increase year-over-year.
Potential investors can learn more about the company as part of our best-performing stocks of 2023.
Tenaz Energy is focused on the acquisition and sustainable development of global oil and gas assets capable of generating free cash flow for shareholders. The company holds assets in Canada and the Netherlands.
Tenaz Energy stock (TSX:TNZ) last traded at C$3.69 per share. The stock is up by 74.06 per cent year-over-year and by 39.77 per cent since 2018.
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