Tenaz Energy (TNZ-T)

Its small size, and the sector, add risks, but the valuation is quite attractive and the stock is showing good momentum (even before the broadcast). Insiders own 12% and have been net buyers this year. The balance sheet is strong and good cash flow/production growth is expected. Production rose 176% in the last quarter with a corresponding giant increase in cash flow. TNZ has also been buying back its own shares (though not at a huge level). All-in, for a small cap stock in the sector we agree that it looks good.
Unlock Premium - Try 5i Free  

It just closed a deal with a consortium that ran assets in the Dutch North Sea. These were neglected assets so with new technology and capitalization there is enhanced recovery. The assets in this acquisition are phenomenal. The CEO used to be with Vermilion and has a lot of credibility. He has set up a $140 million debenture to work on anther venture.       Buy 5  Hold 0  Sell 0

TNZ reported Q3 EPS at $0.71 which beat analysts’ estimates of $0.007. Revenue came in below forecasts of $16.6M at $15.05M, nearly doubling year-over-year. Fund flow from operations (FFO) was $4.8M or $0.16 per diluted share versus the same period a year prior at $2.3M and $0.08 respectively. TNZ closed the acquisition of XTO Netherlands in Q3 to increase position in the Dutch North Sea (DNS). Net income was $21M up from $0.2M in the prior year due to the estimated gain from the XTO acquisition. TNZ expects Q4 production to increase significantly, mainly driven by contributions from new wells at Leduc-Woodbend, whereas annual production guidance post XTO acquisition is unchanged. Share prices for TNZ have increased sharply since June, up +110.23% year-to-date. Q3 was solid for TNZ with strong revenue growth and recent acquisitions being positive indicators. Conversely, cash from operations is just slightly positive and has declined in recent quarters, while also continuing to face small cap risks and being tied to the performance of oil.
Unlock Premium - Try 5i Free