Tourmaline Oil Corp (TOU.TO)

Natural gas has challenges with large storage numbers. Best natural gas producer in Canada. Excellent management team with best in class operations. Current valuation high compared to others in sector. Positive cash flow profile with excellent balance sheet. Safe dividend with expected growth. Would recommend buying. 

It is a very high quality company and a household name. A top priority is returning cash to its shareholders. It is the largest Canadian company in its field and the fifth largest in North America. Its recent earnings were fantastic. It is mostly natural gas and there will some price movement with the changing price of energy.      Buy 15  Hold 1  Sell 0

Offers growth and share buybacks. Reported great Q3 earnings. Expects long-term growth in natural gas, because it will allow the transition from fossil fuels to renewable energy. The transition won't be sudden.

"The CNQ of natural gas." Great management team, assets, balance sheet. Not excited by its trading at 5.5x. 6x multiple is reasonable with 8% upside. Amazing optionality with LNG, but until then he'd rather buy other names for capital appreciation of 100% or more. Yield is 7%, plus writing calls.

OPEC meetings are reactive, not pro-active. With all their data, for instance, they cut production if that data foretells weak demand. So, a cut is not a good thing. That said, he would buy quality oil stocks like Parex and Tourmaline.

Happy to add to it. Has performed well. The best natural gas producer in Canada. They've amassed great drilling locations, cheap production costs, so growth will happen for years. Good history of paying dividends, both regular and special.

Oil is the safest of all the resource categories. Here are 2 names that will let you sleep at night.

Big fan of CNQ: best in class in execution, quality assets, aristocrat in dividend growth. 

TOU doesn't give the upfront, regular dividend, but has been generous with special dividends. Capable of delivering in high single-digit range in terms of total yield.

Sentiment toward security of fuel has changed, brought on by the Russian invasion of Ukraine. His estimates show that Canadian nat gas production will have to increase 30-50% by 2030 to satisfy LNG demand.

Unique, as they have access to the Gulf Coast, good egress in California. His favourite stock, but still frustrating. A staple in the energy space.

The caller asked about his preference between Tourmaline and CNQ. Both are the highest quality oil and gas companies in Canada. Tourmaline is superbly run but is natural gas weighted and moves around a lot along with the price of natural gas. CNQ is more diversified and therefore its stock price is steadier.

Best in terms of management, balance sheet, and returning capital to shareholders. Management is best in class. Recently increased dividend, plus special dividends. Low-cost provider gives them the best balance sheet, profits are fantastic. He's positive on oil and gas. Bonavista acquisition will do great things for the company. Will increase production by further acquisitions at fair prices. Yield is 1.43%.

A dominant nat gas company that's well-run. They move gas from Canada to California. Because there are no processing plants for LNG in Canada right now, TOU has been sending their gas to the US to refine then ship to Asia, but receive a much better price. Volumes aren't large yet, but Asian demand is strong.

His favourite is natural gas. Solar is at the mercy of the sun, and suffers on cloudy days. Nat gas you can turn on and off at will. The more solar and wind power, there will be more nat gas demand with nat gas as a back-up. He read a book that says that modern civilization depends on 4 cornerstones which all rely on fossil fuels: fertilizer-driven agriculture, cement, steel and plastics. Even if every car was an EV, we'd still need fossil fuels. TOU has tremendous reserves and pays a good yield.

NA gas is trading sideways, and will probably stay that way for a while. A cold winter could easily cause gas price to spike. Low-cost gas producer. Trades at 6x price to cashflow, one of the best-run oil/gas companies in the world.

Energy prices should remain firm. Oil usage at all-time high, have to build US reserves again. In the sector, he prefers CNQ and TOU for growth, though dividends are not as high as some other companies.