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Buzz on the Bullboards: Has COVID’s Storm Passed, or is it the Eye of the Hurricane?

Stockhouse Editorial
2 Comments| September 10, 2020

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(Image via the National Association of Insurance Commissioners.)

With headlines dominated by COVID-19 and one-million-plus jobless claims, the threat of hurricane (now tropical storm) Laura had almost come and gone without much international attention.

Its path along the southern US had seemed to pose a threat to crude oil and gas production and while prices had fallen moderately in recent weeks, it appears things are poised for a rebound, with the storm passing through Texas and Louisiana without lasting disruption to the region’s refineries and pipelines. stated that, aside from an empty product tanker in Orange, Texas, there were no major tankers that were docked or berthed within Houston and Port Arthur area.

“This was a very well-coordinated effort to minimize impact. Question is only the inland oil storage situation and how well that is coping right now.”

Stockhouse’s Energy Bullboards are often full of lively chatter, analyzing both the positive and negative news that has emerged from the recent fallout of this storm and price movement.

Crescent Point Energy Corp. (TSX: CPG, Forum) announced the reactivation of economic volumes previously shut-in, resulting in second half 2020 production increasing by approximately 20%.

CPG also provided investors with a revised 2020 guidance with expenditures expected to be approximately $665 million in 2020, in-line with the lower end of the prior range. The Company added that it will be generating approximately $125 million of excess cash flow in second half of 2020. It is preliminary outlook for 2021, the goal is to sustain or exceed second half 2020 production with continued excess cash flow generation.

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On the flip side, Shares of Baytex Energy Corp. (TSX: BTE, Forum) have seen better days, trading far below $2.32 this time last year and a country mile apart from nearly $6 in May 2018 or $7.70 in June 2016. Those where different times, however. BTE’s Eagle Ford assets in Texas have been experiencing tumultuous events.

(Baytex Energy Corp. stock chart – Sept 2019 – Sept 2020. Click to enlarge.)

For example, Mexico conglomerate ALFA S.A.B. de C.V. (BMV: ALFAA) reported in August 2020 that its subsidiary, Newpek LLC, divested all of its assets in Texas, including all wells and leases in the Eagle Ford Shale and closed its administrative office in Irving, Texas and moved remaining functions to Monterrey, Mexico.

Another operator in Texas’ Eagle Ford Trend, Earthstone Energy, Inc. (NYSE: ESTE), has also endured hard times, seeing its stock plunge nearly 9% this week. Its Q2 2020 financial repots came in far below that of 2019 and its CEO, Robert Anderson pinned that performance against – “[A] difficult backdrop that was unprecedented in our industry with the second quarter of 2020 being hit with low commodity prices, reduced demand due to COVID-19 and threats of forced curtailments.”
Even so, some bullboard posters are calling for a reversal in BTE’s shares in the coming days as the price of crude rises, perhaps “all ships will rise as well” … we shall see.

This brings us to our poll question of the week – Do you think oil and gas stocks will experience a surge in share price value to match climbing oil prices? Click the poll below to cast your vote.

Taking a look at last week’s survey, most traders seem to share the belief that metals and mining will come out of a post-COVID market revival the strongest … but don’t count the tech sector out, yet.

Speaking of tech advancements, basic materials company HPQ Silicon Resources Inc. (TSX-V: HPQ, Forum) has been on a roll lately.

The developer of silicon nano-materials confirmed this week that it had closed its $2.7 million non-brokered private placement at 50% premium to market. As a result of this financing, HPQ has never been as well funded to push forward on its nano silicon initiatives for the battery sector and renewable energy applications.

HPQ also strengthened its partnership with the soaring PyroGenesis Canada Inc. (TSX-V: PYR, Forum), having just signed a $3 million contract with the high-tech company, via its subsidiary, HPQ Nano Silicon Powders Inc., which includes an IP sale of $2.4 million.

In other developments, Sona Nanotech Inc. (CSE: SONA, Forum) kept investors happy this week when it stated that it is not affected by the US Food & Drug Administration’s deactivation of 340 previously registered foreign establishments for failing to identify a US Agent. Of these, 131 establishments list devices that are essential to the COVID-19 pandemic response.

(Image via @sona_nanotech on Instagram.)

What the "Buzz"

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This market resurgence even appears to extend to the cannabis sector, as well. While some jurisdictions had labelled it an essential service, shipping products overseas (and even domestically) had been one of many facets of the business hampered by COVID-19, but a couple companies that topped the Bullboard this week just put the postage on their latest deliveries:

In other news, Canopy Growth Corp. (TSX: WEED, Forum) recently said it plans to open 10 new cannabis stores in Alberta, creating 100 new jobs in the process.

Following greater financial flexibility with credit facility amendments, industry heavyweight Aurora Cannabis Inc. (TSX: ACB, Forum) reported this week that it expects its fiscal Q4 2020 net revenue to land between $70 and $72 million, including $66 to $68 million in net revenue and also anticipates positive adjusted EBITDA in its fiscal Q2 2021.

Coming out of a shortened week on account of the long-weekend, next week should bring a return to relative normalcy. On deck is a better understanding of COVID 19’s impacts, as well as a clearer outlook into political developments in Canada and the US. On top of that, we can expect small-cap investors to react and explore what the market has to offer, and the Stockhouse Bullboards to illuminate their findings. For previous editions of Buzz on the Bullboards: click here.

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FULL DISCLOSURE: PyroGenesis Canada Inc. is a client of Stockhouse Publishing.

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