Canadian energy has had a crazy ride this year. Oil prices have hit multi year highs and keep ripping. Some Canadian E&P have increased over 400% since March last year.
For those interested in energy but risk adverse, XEG is a great way to dip your toe into the industry. It is weighed over the largest energy corps (SU - Suncor, CNQ - CNRL, CVE - Cenovus). Current price is $9.26 and with oil prices remaining steady, we can expect it to bounce when the next quarter reports are out.
Medium risk would be owning individual energy stocks. One that has yet to feel the price rally is Suncor (SU). They can produce oil for less than $30/bbl so with oil prices now around $70/bbl, you can do the math on free cash flow generation. Some other great stocks include ARC Resources (lots of nat gas - I expect a good bump this year), MEG Energy (Thermal SAGD with exceedingly low operating costs), Tamarack Valley (recently bought up cash flow generating assets), and Kelt Exploration (recently sold assets and reduced debt to zero). Whitecap is the first carbon negative oil company in Canada, so if there are ESG minded investors (like myself), this is a good way to reward forward thinking O&G companies.
High risk for energy are small cap producers. Companies such as Baytex (BTE), Gear (GXE), and Athabasca (ATH). These companies are small so changes in oil price can really influence them. BTE has hedges on oil that role off over the next year.
I am a geologist that works in O&G and I have not seen the patch this optimistic since 2014. Lots of room to make money here as long as you keep you head cool
DM is also open if anyone has any questions! Also not investment advice.. just the musings of a geologist
For those interested in energy but risk adverse, XEG is a great way to dip your toe into the industry. It is weighed over the largest energy corps (SU - Suncor, CNQ - CNRL, CVE - Cenovus). Current price is $9.26 and with oil prices remaining steady, we can expect it to bounce when the next quarter reports are out.
Medium risk would be owning individual energy stocks. One that has yet to feel the price rally is Suncor (SU). They can produce oil for less than $30/bbl so with oil prices now around $70/bbl, you can do the math on free cash flow generation. Some other great stocks include ARC Resources (lots of nat gas - I expect a good bump this year), MEG Energy (Thermal SAGD with exceedingly low operating costs), Tamarack Valley (recently bought up cash flow generating assets), and Kelt Exploration (recently sold assets and reduced debt to zero). Whitecap is the first carbon negative oil company in Canada, so if there are ESG minded investors (like myself), this is a good way to reward forward thinking O&G companies.
High risk for energy are small cap producers. Companies such as Baytex (BTE), Gear (GXE), and Athabasca (ATH). These companies are small so changes in oil price can really influence them. BTE has hedges on oil that role off over the next year.
I am a geologist that works in O&G and I have not seen the patch this optimistic since 2014. Lots of room to make money here as long as you keep you head cool
DM is also open if anyone has any questions! Also not investment advice.. just the musings of a geologist