Topic: How To Invest

Power Growth Investor Hotline – Friday, August 18, 2023

Article Excerpt

BIRCHCLIFF ENERGY LTD., $8.29, is a buy for aggressive investors. The company (symbol BIR on Toronto) develops and produces oil and gas, mainly in the Peace River Arch area of both Alberta and B.C. Its average output of 77,510 barrels of oil equivalent per day is 82% natural gas and 18% oil. Cash flow in the quarter ended June 30, 2023, fell 75.9%, to $0.26 a share from $1.08 a year earlier. The drop mostly reflects lower oil and gas prices. The company’s long-term debt now stands at just $281.4 million, or a low 13% of its market cap. That’s down from $500.1 million at the start of 2022, as Birchcliff used previously strong cash flow to pay down debt. The company now pays a quarterly cash dividend of $0.20 a share (for an exceptionally high yield of 9.7%). Like all natural-gas-weighted producers, the company will need oil and gas prices to move higher in order to report stronger cash flow. However, we still like the…