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The recent rise in oil prices is a potential thrust for energy companies to reap maximum profits from their existing inventories. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) decision of curtailing production has sent oil prices soaring.
Energy stocks have been gaining momentum and mostly trading above their pre-COVID-19 level.
The entire sector is looking quite bullish on the back of the latest OPEC+ nations’ move. The S&P/TSX Capped Energy Index is up 11.61 per cent in one year, propelled by its month-to-date (MTD) growth of 10.34 per cent.
Here are two Toronto Stock Exchange (TSX)-listed oil and gas stocks that investors’ should explore:
Canadian Natural Resources Limited (TSX:CNQ)
The stocks of one of the leading Canadian energy companies have risen by 13.17 per cent in the last five trading sessions, outperforming the energy index that has grown 11.19 per cent in the same period.
The large-cap stock has yielded 20.56 per cent in the last one year, almost double as compared to the energy index’s growth in the same time period.
The stock reached its 52-week high of C$ 40.41 per share on Friday. It has a current price of 39.28, which is up over 300 per cent from its 52-week low of 9.80 per share on March 18, 2020.
Canadian Natural Resources’ One Year Stock Performance Chart. (Source: Refinitiv)
In 2020, the company produced nearly 1,164,000 Barrel of oil equivalent (BOE) a day, a surge of 6 per cent or almost 65,000 BOE a day against its 2019 levels.
The Canadian Natural Resources’ free cash flow amounted to C$ 694 million in the fourth quarter of 2020, after net capital spending of C$ 655 million and quarterly cash dividend distribution of C$ 502 million in Q4 2020.
Ovintiv Inc. (TSX:OVV)
Shares of North American exploration and production firm also soared to their 52-week high of C$ 36.30 per piece on Friday, March 5, 2020. The energy company is one of the top price performers of 2020, with an increase of 92.34 per cent YTD.
Ovintiv stocks have bounced back with a massive growth of 1,092.54 per cent against its 52-week low of C$ 2.95, recorded on March 9, 2020. It has a lucrative 20 per cent MTD return and an extraordinary one-year return of 180.31 per cent.
Ovintiv's One Year Stock Performance Chart. (Source: Refinitiv)
In the fourth quarter of 2020, its crude and condensate oil production stood at 215 thousand barrels a day (Mbbls/d), up 7.5 per cent from its guidance of 200 Mbbls/d.
The company drilled averaged 557 thousand BOE a day, and its full-year 2020 production was 544 thousand BOE per day.
In its 2021 outlook, Ovintiv expects a capital investment of C$ 1.5 billion and estimates to generate around C$ 1 billion of free cash flow (non-GAAP).
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
