It is safe to say that Canada has enough of oil and gas resources to be self-sufficient. But what is less known is that during 2019, Canada-based energy firms have quietly outperformed their U.S. counterparts. Moreover, the positive outlook is here to stay as U.S. political risks and production concerns due to trade wars are only an additional reason for a potential shift of funds towards Canadian energy stocks…
Energy Industry Is The Winner In Canada
It was in first quarter of 2019 that Canada's energy sector saw a big rise in profits due to increased oil prices. But more interestingly, despite global oil prices facing volatility with US-China tensions, Canadian prices have skyrocketed.
And they jumped so much that the energy sector outpaced Canada's major industries when it comes to operating profit, manufacturing included. But even manufacturing operating profit for petroleum and coal product manufacturers rose due to increased oil prices. The mixed picture for Canadian businesses varies by sector, but image is more than clear when it comes to oil and gas. And for that reason, Canada's oil companies should be on any investor's radar.
AOC Targets Canada's "Golden Mine"
A just rebranded Advantagewon Oil Corporation AOC is a company focused on building consistent cash flow from low cost, low risk oil wells. And it has just expanded its Canada-based operations. By entering into this agreement, it acquired working rights to a former operating well. However, this is by no means an ordinary well but rather one with a historic production record between 20 to 30 barrels of oil per day (BOPD).
Additionally, the company committed to funding and implementing a workover program with the purpose of recommissioning the well that is acquiring. The total commitment amounting to $80,000 CDN includes the purchase price and anticipated costs to implement the above described incentive. And once completed, the well will be both reconditioned and put back online, but more importantly, the company's interest on the well be 100 percent.
Moreover, AOC anticipates that the work which will be commenced immediately will take only three weeks. So, AOC isn't taking it slowly but rather capitalizing on this positive trend rather quickly. Afterall, one should ‘strike while the iron is hot'!
US Runners
Meanwhile, EOG Resources Inc EOG, a Houston-based company engaged in hydrocarbon exploration, just saw its shares up p 16.80% from its 52-week low and is poised to grow.
Also from Houston, Texas, Phillips 66 PSX is an American multinational energy company with a market cap of $42.97 billion. Several analysts expressed their opinions, Morgan Stanley MS reduced their price objective on
Barclays assumed coverage with an ‘overweight rating' and Zacks Investment Research switched from a "buy" rating to a "hold" rating and set a $125.00 price objective on the stock. The image will be far clearer once earnings are released on Friday, January 31st, just before markets open.
Another Texas comrade, but from San Antonio, Valero Energy Corporation VLO a Fortune 500 international manufacturer and marketer of transportation fuels, other petrochemical products, and power just topped earnings and revenue estimates with its fourth quarter. Income of $2.13 per share has significantly topped the Zacks Consensus Estimate of $1.60 but comparing to last year's figure of $2.19 per share, earnings have decreased.
In fact, the better than expected results might as well be attributed to processing of a record number of Canadian low-cost heavy crude, along with lower cost of sales. So, Canada definitely seems to hold the key…
Canadian oil – to golden egg
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