Topic: How To Invest

Q: Hi. Would you please provide you view on Tourmaline Oil? Thanks.

Article Excerpt

A: Tourmaline Oil, $14.41, symbol TOU on Toronto (Shares outstanding: 272.1 million; Market cap: $4.0 billion;, is a Canadian oil and natural gas exploration, development, and production company with properties concentrated in central Alberta and northeast B.C. In the three months ended September 30, 2019, Tourmaline’s daily output averaged 289,578 barrels of oil equivalent (81% gas and 19% oil), up 13.9% from 254,185 a year earlier. However, cash flow per share fell 22.6%, to $0.82 from $1.06, as significantly lower oil and gas prices offset the higher production. The company’s long-term debt of $1.8 billion is a manageable 45% of its market cap. Tourmaline has low operating costs, and sells roughly 60% of its gas to hubs in the U.S., with which it has long-term contracts that pay a higher price for its gas. The company also owns a lot of its own mid-stream (processing, storage and transportation) infrastructure. The stock trades at just 3.2 times this year’s forecast cash flow of $4.53…

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