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After five weeks of reviewing Canada’s E&P companies, Oil & Gas 360® offers its wrap up on this particular section of the industry as we move into 2015.

Based on EnerCom’s E&P Weekly report, which was used to gather all the financial metrics used in the Canadian E&P Weekly series, we have compared all of the companies together in one peer group to give a final overview of Canadian E&P companies. The data used for this comparison is dated for the week ended December 19, 2014.

Our recap includes Bonavista Energy (ticker: BNP), Baytex Energy (ticker: BTE), Bellatrix Exploration (ticker: BXE), Canadian Natural Resources (ticker: CNQ), Canadian Oil Sands (ticker: COS), Crescent Point Energy (ticker: CPG), Crew Energy (ticker: CR), DeeThree Exploration (ticker: DTX), Encana Corp (ticker: ECA), Enerplus (ticker: ERF), Gran Tierra Energy (ticker: GTE), Lightstream Resources (ticker: LTS), Manitok Energy (ticker: MEI), Peyto Exploration and Development (ticker: PEY), Pengrowth Energy (ticker: PGH), Paramount Resources (ticker: POU), Strategic Oil & Gas (ticker: SOG), Tamarack Valley Energy (ticker: TVE) and Vermilion Energy (ticker: VET).

Because it was purchased by Spain’s Repsol (ticker: REPYY) after the time of its inclusion in the Canadian E&P Weekly – Part 4, Talisman Energy Inc. (ticker: TLM) is not included in this comparison.

Of the 19 companies we spotlighted in our series, the average enterprise value is $2.54 billion, average debt is $1.86 billion, average asset intensity (defined as the percent of cash flow from operations that is required to maintain production) is 84%, the average trailing twelve month (TTM) capital efficiency is 202%, the average debt to market cap is 66%, the average enterprise value per share (EVPS) to cash flow per share (CFPS) is 5.2x and the average TTM cash margin to barrel of oil equivalent is $38.21.

The average asset intensity falls to 34% when ECA is excluded. Encana’s asset intensity is abnormally high at 974%. The average debt to market cap also falls considerably when outlier Lightstream Resources is removed. LTS has a debt to market cap of 570%. Without that, the remaining 18 companies average 38%.

The standouts in the group based on individual markers are Gran Tierra and Tamarack Valley, who both have zero debt, Strategic, which has just 13% asset intensity, meaning the remaining 87% of its cash flow is available for growth projects, acquisitions, or can be returned to shareholders, Bellatrix, which has a TTM capital efficiency of 553% and Crescent Point with $63.56 of cash margin per barrel of oil.

When compared to EnerCom’s 88-company,U.S.  E&P Weekly, the Canadian peer group still performs well. The Canadian group’s average asset intensity is 20% lower than the U.S.  group’s 106% average even including ECA, its debt to market cap average is 147% lower on average including LTS, its EVPS to CFPS is less than half the large groups average of 12.0x and the Canadian group earns $8.78 more than the average TTM cash margin per barrel of oil than the group of 88’s $29.43 per barrel.

The U.S. peer group had a much higher enterprise value, averaging $9.1 billion, and 19% better TTM capital efficiency, averaging 221%.

Moving into 2015

Many companies have decided to reduce their capital expenditures for 2015 due to the low predicted prices of oil, but all of the Canadian E&P companies are still hopeful about prospects in the coming year. Not all of the companies featured in our Canadian E&P Weekly have released 2015 capital expenditure guidance yet, but those that have are optimistic that next year will be good, despite the current price environment.

The companies that have reported their 2015 guidance so far are: Bonavista, Baytex, Bellatrix, Canadian Natural Resources, Lightstream, Peyto, Vermilion, Encana, Gran Tierra, Enerplus and Canadian Oil Sands.

The total expected capital expenditures for these 11 companies in 2015 will be $15.7 billion, with total production at approximately 1,954 MBOEPD, or about $8,018 per BOEPD. Compared to 2014 guidance, when these same 11 companies expected to spend $16.2 billion and produce 2,267 MBOEPD, or $7,164 per BOEPD.  This represents 14% lower production and 3% lower capital expenditures from the 11 companies’ expectations in 2014.

When asked about his thoughts on where he saw the oil and gas industry headed in 2015, Brent Eshleman, Executive Vice-President and COO of Bellatrix, had this to say to Oil & Gas 360®: “2015 will be a challenging year for the oil and gas industry as a whole, but we have seen these downturns in the past. Good management teams position their companies in the good times to handle these volatile times. It will be an interesting year ahead; but isn’t every year?”

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.