These 5 Oil & Gas Stocks Look Too Tempting To Resist – Here’s Why

Oil and gas exploration companies rely on drilling new wells to increase production and improve the economics of their operations and those companies best able to find high boe/d drilling sites at low costs will often see the greatest margin growth and related increase in value. Today we have assembled a list of five TSX oil and gas stocks with the lowest forward looking EV/EBITDAX ratios (which include back exploration costs) so we can compare O&G exploration and production companies on a level playing field…

1. Gear Energy Ltd. (TSX:GXE)

Oil & Gas Exploration and Production

Gear Energy is an oil and natural gas producer with assets in Alberta and western Saskatchewan. The Company strives to grow its operations through a balanced strategy of exploration and M&A. Its two core assets are its Lloydminster Heavy Oil and Alberta Light Oil properties. Its 2018 forecast include average annual production of 7,350 boe/d (86% liquids).

  • Market Cap: $280.9 Million
  • EV/EBITDAX 2018: 3.3 x
  • EV/EBITDAX 2019: 1.8 x
  • YTD Total Return: -5.6%

2. Frontera Energy Corp. (TSX:FEC)

Oil & Gas Exploration and Production

Frontera Energy is a Canada-based producer with operations focused in Latin America. with diversified interests in more than 30 exploration and production blocks in Columbia and Peru. As of December 31, 2018, FEC’s properties hosted 2P reserves of 154M boe. Frontera is guided to produce an average net production of 65,000-75,000 boe/d in 2018.

  • Market Cap: $1,870.2 Million
  • EV/EBITDAX 2018: 7.5 x
  • EV/EBITDAX 2019: 2.9 x
  • YTD Total Return: 30.6%

3. Baytex Energy Corp. (TSX:BTE)

Oil & Gas Exploration and Production

Baytex Energy is a Canada-based oil producer operating in Alberta and Texas, producing 51% of its oil from its Eagle Ford asset in Texas and the remainder from its Peace River and Lloydminister heavy oil fields. On June 18, 2018, the Company announced that it had reached an agreement with Raging River Exploration (TSX:RRX) to merge. The combined company will have an enterprise value of approximately $5B and will continue to operate under the Baytex name. Following the merger, average annual production is expected to range between 100,000 – 105,000 boe/d.

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