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Crescent Point doubles down on the Torquay

Also: Rafi Tahmazian pounds the table for Paramount Resources

When he was younger, Max Fawcett wanted to make a mint in the markets. Now as the managing editor of Alberta Venture he gets to write about them. Close enough, right? He can be reached at mfawcett@albertaventure.com

Apr 24, 2014

by Max Fawcett

It had been a while since Crescent Point Energy had done a deal. Too long, maybe. In any event, on the heels of the recent news that it had made a big find in its Torquay properties, the acquisition-savvy company announced yesterday that it was buying CanEra Energy, a private company with land that in the same play, for $1.1 billion including assumed debt. As FirstEnergy’s Cody Kwong said in a note, “the acquisition adds approximately 10,000 boe/d of production along with more than 260 net sections of land with Torquay potential, and coupled with the announcement last week brings Crescent Point’s total exposure on the play to over 880 net sections.” He liked it so much, in fact, that he bumped his price target on its shares up to $52.

Meanwhile, Canoe Financial’s Rafi Tahmazian showed up on BNN yesterday to talk about his growing bullishness for the entire Canadian energy space. “We still think that the fundamental basis of the bullish gas story is not well understood yet. We’ve had an increase in cash flows this over what we thought they would be this year just three months ago, and Peters & Co. thinks cash flows in its universe this year are going to be up by about $10 billion. That’s a huge number,” he said.

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And while the market had bid up prices on virtually every Canadian energy name this year, he thinks there’s plenty more yet to come. “Your cash flows are going up, your debt’s going down, you can expand your cap-ex program and increase your volumes – and do all that without dilution from new equity,” he said. “I hate to sound terribly bullish at any time, but this really is playing out very nicely.” In terms of a specific name, he likes Paramount Resources (TSE:POU). “I’ve always been on the show talking about Paramount, and nothing changes there. They continue to be very well positioned in high liquids content gas plays, they’ve got a midstream company within them, they’ve got a drilling company within them, and they’ve got a heavy oil company as well. The sum of the parts is just mind-boggling.” How mind-boggling? Despite the parabolic look of its stock chart over the last few weeks, he thinks it could still get to $100 – nearly a double from where it sits today.

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