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Source: Makarov Ilya, Shutterstock
Summary
- The devastating winter freeze that hit North America in February saw many businesses suffer major setbacks.
- A handful of companies, however, secured growth amid this crippling deep freeze, such as Tourmaline Oil Corp (TSX:TOU).
- Over the last one year, Tourmaline stocks expanded by over 206 per cent.
The devastating winter freeze that hit North America in February 2021 saw many businesses suffer major setbacks. Electricity retailer Just Energy, for example, incurred a loss of C$ 315 million due to the increasing blackouts in the region and was forced to file for bankruptcy. At the same time, a handful of companies secured growth amid this crippling deep freeze, such as Tourmaline Oil Corp (TSX:TOU).
One of the top trading energy stocks on the Toronto Stock Exchange (TSX), Tourmaline surged by over 23 per cent in the month of February and recorded a year-to-date (YTD) growth of nearly 38 per cent.
Over the last one year, Tourmaline stocks have expanded by over 206 per cent.
So, how did Tourmaline record growth amid the Texas deep freeze? Let’s find out.
Tourmaline Oil Corp (TSX:TOU) & Texas Deep Freeze
Severe Arctic snowstorms dawned upon southern states in the US around February 11. Texas, in particular, suffered gravely, as the frigid weather escalated and snapped its electricity supply, leaving millions at the risk of freezing to death.
The extended blackouts and sub-zero temperatures quickly made people turn to heating fuel for warmth. As a result, the same blackout that inflicted huge losses for electricity companies pumped up the demand and prices for natural gas.
In places like Oklahoma and Texas, natural gas prices reportedly zoomed to record levels of $200 per 1,000 cubic feet in mid-February while spot natural gas prices went through the roof. Meanwhile, Canadian oil and gas producers imcreased their export quantities to the US in February on a month-over-month (MoM) level amid the soaring demand and prices.
©Kalkine Group 2021
Tourmaline Oil Corp, which reportedly had ample supply of natural gas stored in energy hubs near San Francisco and Toronto, sold massive volumes in these regions during this time.
The company has not disclosed its earnings from the deep freeze period. But some reports claim that based on the average prices of natural gas from San Francisco and Toronto hubs in February 2021, Tourmaline has likely added about C$ 18 million to its revenue for the current quarter.
Tourmaline Oil Corp Latest Financials
Tourmaline, which is largest natural gas producer in Canada, saw its net earnings jump 926 per cent year-over-year (YoY) to C$ 629.2 million in the fourth quarter ending 31 December 2020. On an annual level, the company’s net earnings was up 93 per cent YoY to C$ 618.3 in 2020.
Tourmaline Oil Corp also increased its quarterly dividend from C$ 0.14 to C$ 0.16 per share in the latest quarterly report. It currently posts a dividend yield of 2.65 per cent, as per TMX data.
©Kalkine Group 2021
