High-quality reserves are key to their success

Article Excerpt

The best way to cut your risk when investing in oil and gas stocks is to focus on companies with long-lasting reserves. We also look for producers with low operating costs. That helps them stay profitable when oil prices decline. We analyze three companies below: Encana and Cenovus offer strong long-term prospects; and while Pengrowth’s focus on its new oil sands project is a plus, its high debt load is a major risk factor. ENCANA CORP. $9.36 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $14.0 billion; Price-to-sales ratio: 2.6; Dividend yield: 1.1%; TSINetwork Rating: Average; www.encana.com) operates four key properties: Montney (B.C.), Duvernay (Alberta), and Eagle Ford and Permian (both in Texas). In addition to natural gas, these fields produce large amounts of oil and natural gas liquids. In February 2019, the company completed its purchase of Newfield Exploration Co. (New York symbol NFX). That firm operates shale oil and natural gas wells in the Stack and Scoop…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.