- The TSX has cleared Saturn Oil & Gas (TSX:SOIL) for a stock buyback program to cancel up to 11,306,825 of its outstanding common shares between Aug. 27, 2024 and Aug. 26, 2025
- Read on to learn about what kind of conviction Saturn stock merits at its current price
- Saturn Oil & Gas is a Canadian energy company operating free-cash-flowing assets in Saskatchewan and Alberta
- Saturn Oil & Gas stock has fallen by 0.39 per cent year-over-year, but has gained 5.83 per cent since 2019
The TSX has cleared Saturn Oil & Gas (TSX:SOIL) for a stock buyback program to cancel up to 11,306,825 of its outstanding common shares between Aug. 27, 2024 and Aug. 26, 2025.
The oil and gas producer had 204,198,643 shares issued and outstanding as of Aug. 21, 2024, or 113,068,253 shares excluding those owned by Saturn directors, executive officers and insiders with more than 10 per cent positions.
According to TSX rules, Saturn can repurchase a maximum of 46,032 shares per day, which is equivalent to 25 per cent of the stock’s average daily trading volume for the six months preceding the buyback’s approval.
The company has enlisted Ventum Financial to conduct any purchases on its behalf and intends to fund them using available cash on its balance sheet.
According to Friday’s news release, Saturn’s board views the buyback as accretive to shareholder value, contingent on purchases being made when “the market price of the common shares does not fully reflect their underlying value.” The question of the hour then becomes, what kind of conviction does Saturn Oil & Gas stock merit at its current price of C$2.54 per share? The answer, we’ll argue, is near ironclad.
5 reasons to invest in Saturn Oil & Gas today
- Production has grown steadily after four major acquisitions coming out of the pandemic, increasing from 1.9 million barrels of oil equivalent per day (MMboe/d) in Q2 2021 to an estimated 38-40 MMboe/d between Q3 2024 and Q3 2025, with more than 20 years of drilling inventory to keep operations running over the long term. This trajectory has been accompanied by 5.8x adjusted EBITDA growth from C$18 million in Q2 2022 to a quarterly record of C$106 million in Q2 2024 – almost C$400 million over the past year – providing the company with plenty of cash to pursue further growth.
- Profitability has grown meteorically over the past few years, swinging from a more than C$65 million loss in 2021 to net income of C$74.82 million in 2022 and C$290.62 million in 2023.
- Management has proven itself skilled at increasing operational efficiency, lowering operating and transportation costs by 23 per cent from 2021 to 2023 and royalties by 25 per cent over the same period.
- Saturn stock hasn’t reflected its underlying company’s profitable growth, having given back over 35 per cent since January 2022, suggesting an undervalued entry point.
- Saturn’s undervaluation is supported by the stock being worth C$7.33 per share based on proved, developed and producing reserves, C$10.63 based on proved reserves and C$16.11 based on proved and probable reserves, representing potentially exponential gains from the current share price.
While the oil and gas markets are unavoidably tied to the macro worries of the day, and Saturn stock will swing according to this sentiment over the short-term, the company’s track record affords it a high probability of coming out ahead over the long-term by continuing to increase reserves, production and cash flow in line with shareholder value creation.
About Saturn Oil & Gas
Saturn Oil & Gas is a Canadian energy company operating free-cash-flowing assets in Saskatchewan and Alberta.
Saturn Oil & Gas stock (TSX:SOIL) is up by 3.25 per cent, trading at C$2.54 per share as of 11:13 am ET. The stock has fallen by 0.39 per cent year-over-year, but has gained 5.83 per cent since 2019.
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(Top photo: Saturn Oil & Gas)