Energy Pulling in Two Different Directions

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Thursday, February 20, 2020

Once again, energy stocks are in the spotlight in North America Thursday, with the sector making scant progress on the TSX (0.4%), fading a tad on the NYSE, It’s all a sign of the general volatility of the bigger market, which suddenly went for a slide as noon hour approached.

On Canadian soil, one energy concern clinging tenaciously to gains is Whitecap Resources Inc. (TSX:WCP), not one usually given to the designation of “small-cap”, but still very much within the parameters of the term.

The Calgary-based Whitecap took time last week to build anticipation for its fourth-quarter and year-end earnings announcement due next Thursday. Meantime, the company announced a cash dividend of 85 cents Canadian per common share in respect of February operations, which will be paid on March 16, to shareholders of record on February 29. 

While WCP peaked for the last 52 weeks near six dollars last April, the price has fallen since then, but pulled itself up by two cents to $4.86, on volume topping 1.8 million shares. 

Big hitters in the U.S. small-cap energy stocks were few and far between Thursday, but one exception proved to be Earthstone Energy Inc. (NYSE:ESTE) out of The Woodlands, Texas.

Its primary assets are located in the Midland Basin of west Texas and the Eagle Ford Trend of south Texas. 

Latest tidings out of Earthstone, released at the end of January, were of projected oil and gas sales volumes at ~1.60 MMBoe or an average of ~17,380 Boe/day up 66% Y/Y (66% oil). For 2019, ESTE estimates its annual sales volumes grew 35% to ~4.88 MMboe, beats top end of 2019 guidance by 9%

The company ended the period with $155 million of undrawn capacity on a $325-million senior secured revolving credit facility and a cash balance of $13.8 million.

ESTE climbed four cents, or 0.9%, not world-beating action, but which propelled the price to $4.73, on volume of more than 115,000 shares.

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