Tourmaline Oil Corp (TOU.TO)

Commodity price downturn has been pretty abrupt, but still nice levels for Canadian producers. $70 crude converted to CAD is still a pretty nice number. On the gas side, transformational event will be LNG Canada egress coming on late 2024 and early 2025. It will make capital budgets more dependable. Can deploy capital here, but keep powder dry in case of economic or commodity weakness.

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Has owned this a long time. The chart has done very well. Every time shares gap higher, he trims to reduce his weighting. TOU is set up very well for the long-time; Canada LNG is in the sweet spot. Happy to hold this for a long time.

Best company to own natural gas in Canada. Excellent management team. Very good growth. Excellent marketing team that secures good pricing. Pipeline expansion in Canada will benefit company. Con to the business is that natural gas is commodity under pressure. Overall, a strong business. Would recommend buying. 

High exposure to natural gas. Strong support around $2mcf. Believes gas has upside which is good for Tourmaline. Would recommend buying.

Editor's Note - The question was more related to the oil and gas sector in general. The sector is down and not growing much so wait for a pullback before buying stock in these companies. There has been less capital spending in the industry than before so there could be supply chain constraints going forward. Companies have been paying cash flow back to shareholders through dividends and share buybacks. He doesn't own Tourmaline but it is a great company.

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.