Tamarack Valley Energy (TVE-T)

Hit or exceeded numbers for 3 quarters in a row. People have come back to the story. 20 years of stay-flat inventory in the Clearwater, a massively economic play. Benefit of incremental FCF lowering the decline rate. Shareholders likely to get 60% of FCF for the next several years as it pays down debt. 

Mid-cap, but doing very well. Deep value. Still believes in $80 oil one day, which would translate to 17% FCF yield, and that's where the juice of the mid-cap shines. Yield is 3.4%.

Company has hit guidance targets 3 quarters in a row - out of the penalty box as a result. Pure play on Clearwater/Charlie Lake oil plays. Wells are paying our multiple times in ~2 years. Very economic oil metrics. Trading at a steep discount to NAV and cash flow multiples. Would recommend buying at this price. Management buying stock aggressively. 

He's stuck with it through some real pain. Hit its numbers for 2 quarters in a row, exceeding expectations. Beat on higher production and lower capex. At least 20 years of high-quality, stay-flat inventory. 60% of free cashflow to shareholders, meaningful buybacks. 18% free cashflow yield, 1/2 in buybacks and 1/2 as dividend. Yield is 3.74%.

Sees $8.32 one year out, 71-104% potential upside 2 years out.

Has its ups and downs, can be more volatile, so the dividend can help. These small caps are quite dependent on the energy price. Nice run earlier this year; now just bouncing between $3.50 and $4.25, looking for direction.

Suffered from poor performance due to being aggressive acquirer, a lot of stock was issued and had to be absorbed. 

He continues to hold with a 7-7.5% weight. Quality assets, though may have overpaid, but that's in the past. Deleveraging so that more free cash can be returned to shareholders; investors get half of it right now, goal is 75%. Well over 10 years of inventory. 10% free cashflow yield is reasonable. Ticks all the boxes.

It trades around 3x cash flow and a double-digit free cash flow yield, and pays over a 4% dividend yield. He see 50-80% upside. They operate in the Clearwater oil play and another high-return oil project. They just started buying back shares which should increase as they lower debt. You get paid to wait.

Deeply out of favour. Active doing M&A, created an overhang. Timing and quality of assets purchased was very good.

Can't find any negative comments on its assets. May have overpaid slightly for its most recent purchase, but very high quality. Hit numbers for 2 quarters in a row, so his confidence in execution is increasing. 20% free cashflow yield. Needs to pay down debt, and then 75% of free cashflow can return to shareholders. He trimmed recently, from a 10% position to 6.5%. Implied price target is almost $7. Share price is getting increasingly attractive.

EPS of ($0.06) missed estimates of $0.0763 and revenues were $393.34M. Adjusted Funds Flow was $181.6M, a 15% year-over-year increase, which was directed to dividends, and reinforcing its balance sheet. TVE purchased 7.6M in shares during the quarter, 1.4% of outstanding shares for $25.6M. Production volume was in line with guidance, and management called for an average annual production of 61,000 to 63,000 boe/d in 2024 with a capital budget of $390M to $440M. A big piece of its loss per share in the quarter is due to an unrealized loss in its commodity related hedging contract. The stock closed the day in the green, and we are not overly concerned by this quarter. It continues to offer a high dividend yield, and repurchase shares. 
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They've been aggressive acquiring inventory, perhaps overpaying for a few, but that's now in the past, and they won't be buying more in the near future. They have more than enough drilling inventory, so now they must prove to markets the merits of what they bought and that they've taken care of all their overhangs. He projects 19% forward free cash flow yield--compelling. It's been a frustrating stock, though. Past laggards should perform well this year.

A large disappointment due to their acquisitions, which haven't paid off yet. There are no more overhangs, though, so this could rerate higher. He target $6.80 or 73% upside. Are a prime target to merge to gain scale and attract large investors.

Oil should stay in the $80 range or higher. TVE had issued shares for its acquisitions but is now buying back shares and paying down debt. He owns and is buying. Headwater is the number one position in the Clearwater area.

Half its production comes from the Clearwater Formation, the hottest play in Canada. Very high margin, excellent leverage to differentials (WCS and WTI) pulling back to historic averages at the Transmountain comes online soon. However, they bought several companies and the market didn't like that. But they will reach their debt level in the second half of 2024 that will lead to 25% of free cash flow to return to investors and eventually reach 75%. He expects more debt reduction.

He bought a lot of oil in 2020 when it bottomed, and oil did well through 2022. Shares have come down since, but oil and gas prices remain good, and the stocks offer good free cash flows. But sentiment is not there. The Saudis don't want oil below $70/barrel, and they run OPEC. If you believe that the Saudis will cut production to maintain that price, then oil stocks are undervalued. The large-caps have the best balance sheets and are the most stable. Mid-caps are slightly more volatile and the small-caps are very but are really cheap though don't pay dividends. TVE is the best mid-cap with great assets in the Clearwater. The knock is that they made some acquisitions which raised their debt, but this is short term. He expects a rebound this year.

Higher cost, higher leveraged assets. Weak compared to others in the sector. But if we see strength in the energy sector, a name like this could perform better because the marginal increase can affect them more to the upside. Not one to own if you're only middling on energy.

Likes it and the energy space, but the malaise is down to weak oil and natural gas prices as well as the federal government being hostile to this space. TVE has grown very well in recent years.