23rd Jul '23 by bullhead

12 comments 1777 reads

If you look through the mid caps of oil producers you will see a large choice of cash generative high div shares that look either to cheaply or are priced to go bust

Personally think they have been over sold on the alter of green energy and worries of falling demand while there will be political difficulties on a country basis and with funding from certain banks etc for those who can fund new developments I think these companies will continue to throw off large amounts of cash

Quotes from IEF on increased oil demand in second half from India and China

https://www.cnbc.com/2023/07/2...

Here are a few suggestions would be grateful of any other suggestion

£DEC Energean (LON:ENOG) Serica Energy (LON:SQZ) Seplat Energy (LON:SEPL) Harbour Energy (LON:HBR)

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About the Author

Bullhead

Premium Member

12 comments

WarrantStar

23rd Jul '23

I don't invest in energy companies. But it's easy to do a screen on Stocko for companies in the Oil & Gas industry, set the maximum market capitalisation that you might want, and set other factors eg minimum value rank or maximum PE ratio.

Alphaflight

24th Jul '23

My best performing investments of 2023 have been the oil and gas service and equipment sector. I bought these when they were destroyed, even now they look ridiculously cheap but are up over 80% from my average entry points. e.g. Transocean (RIG), XES, DO, XPRO. The only way to bring on more supply [in the west] is to utilize these sorts of companies otherwise no new supply comes online. All of this sector is still cheap, very few people are paying attention to it.

bullhead

25th Jul '23

Thanks for those suggestions alpha the oils services sector along with oil producers is an area people have ignored recently with the rush to green energy I do really need to start looking across the pond more at companies like those you have suggested totally agree the west is going to experience a supply crunch unless it ups output Hunting (LON:HTG) is a UK based firm that should benefit too I’m thinking

noisyboy9

25th Jul '23

I3E Energy is worth a look IMHO, Recent falls mainly due to suspension of monthly dividend

Alphaflight

25th Jul '23

bullhead: You are very welcome. Another sub-sector that has been destroyed is the offshore ship builders. Good thing we will never need more oil rigs - right:-) Remember, oil rigs are like ships, they age and have to be thrown on the scrap heap. Again few people are interested in this so massive convexity to be had by a patient investor that believes we will need more oil/gas in the future.

Also, to digress slightly, if you are merely looking for high income, Petrobras in Brazil pays out a 40% per year dividend yield (NYSE listing: PBR), Ecopetrol in Colombia (NYSE listing: EC) pays out 30% per year. Both of these companies have PEs below 3 - unreal.

Coal stocks are the same deal if you are looking for high income, especially the Indonesian coal miners!

bullhead

27th Jul '23

Your full of insights and ideas AF totally agree the whole oils and gas sector is miss priced at the moment and there are a lot of opportunities for a patient investor in this area for capital growth and the opportunity to lock in some big yields

Yep coal is still the Asia and Steel makers guilty little pleasure

And Germanys too

https://www.reuters.com/market...

bullhead

27th Jul '23

Thanks for the suggestion

bullhead

1st Sep '23

Good results from Diversified Energy (LON:DEC) this morning on all fronts also is a results presentation at 12.00 which can be found by following link below

http://newsfile.refinitiv.com/...

Alphaflight

1st Sep '23

Still lot of cheap high paying dividend energy companies out there:

Woodside Energy (LON:WDS) - Dividend 10% p.a.

Saras SpA (BIT:SRS) - Dividend 14.45% p.a.

Ecopetrol SA (NYQ:EC) - Dividend 18% p.a.

Petroleo Brasileiro SA Petrobras (NYQ:PBR) - Dividend >25% p.a.

For pure convexity, see SPDR S&P Oil & Gas Equipment & Services ETF (PCQ:XES)

This ETF captures the service and equipment companies required to find/bring on/service more oil&gas supply. Without these companies we have no more future supply. I believe I'll make 4 or 5 times my initial investment with this ETF over the next 5 years.

Something like Transocean (NYQ:RIG) offers more alpha than XES but potentially much more volatile.

pastybap

1st Sep '23

I've mentioned it here before but Arrow Exploration (LON:AXL) is my number 1 pick in this sector. Currently 3000boepd. Should be 4500boepd by year end. Growing production, growing reserves. Relatively low energy tax jurisdiction (Though Colombia does scare some off). Priced at approx 1x earnings, net cash, should have it's market cap in net cash by YE24.

Alphaflight

5th Sep '23

Oil Soars To New 2023 High After Saudis, Russia Surprise With Extended Production Cut

"...Bottom line: we now know that a year and a half later, the OPEC+/BRIC+ reaction to Biden's weaponized dollar is weaponized oil; may the least hopeless man win."

Source

14 Double Up

29th Dec '23

Working in the industry I have an unhealthy bias in my portfolio to O&G. What has amaz d me in the last 4 years since I started taking more interest in my investments and the U.K. market in general is just how unloved the industry is, really amazes me. I’m a long term holder in Jersey Oil and Gas (LON:JOG), over the last 7 years they’ve basically discovered oil and farmed out a credible FDP, all now unlocked barring NSTA FDP sign off later in the year, valued the same as 7 years ago, pre discoveries and farmout. Harbour Energy (LON:HBR) have just announced a merger that will quadruple the size of the company, proven track record of delivery and again a muted market reaction…U.K. Fintwit appears to prefer investing in a card shop Card Factory (LON:CARD) ?

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Is now the time to buy cheap oil stocks

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About the Author

Bullhead

12 comments

Oil Soars To New 2023 High After Saudis, Russia Surprise With Extended Production Cut

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