Why Delphi Energy Shares Popped

Is this meaningful? Or just another movement?

The Motley Fool

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of oil and gas explorer Delphi Energy (TSX: DEE) climbed 10% today after providing an operations update that excited Bay Street.

So what: The stock has slumped over the past month on valuation concerns, but today’s East Bigstone update — the fourth Montney well produced an average rate of 9.4 million cubic feet per day (“mmcf/d”) of raw gas and 1,250 barrels per day (“bbls/d”) of wellhead condensate — is quickly easing those worries. For perspective, Delphi’s most fruitful Montney well so far produced at an average of 8.8 mmcf/d of raw gas and 750 bbls/d of wellhead condensate.

Now what: Don’t expect Delphi’s success at Bigstone to stop anytime soon. “Drilling times for the Company’s Montney wells have decreased 35 percent and drilling costs have been reduced by 25 percent since the beginning of the Bigstone Montney program,” noted the company. “Drilling operations continue in East Bigstone with three gross (2.7 net) additional wells planned to be drilled prior to break-up in 2014.” So while the stock remains far too risky for average investors, Delphi’s strong momentum at Bigstone make it a particularly enticing speculation for energy-savvy Fools.

 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Brian Pacampara does not own shares in any of the companies mentioned.  The Motley Fool does not own shares in any of the companies mentioned.

More on Investing

food restaurants
Investing

If I Could Only Buy 1 TSX Stock for the Next 10 Years, This Would Be It

Here's why Restaurant Brands (TSX:QSR) remains my top pick on the TSX for long-term investors seeking excellent total returns.

Read more »

data analyze research
Bank Stocks

The 1 Canadian Bank Stock I’m Watching This Week

Bank of Montreal (TSX:BMO) stock is starting to look dirt-cheap after its post-earnings fumble.

Read more »

Investing

The Best Stock to Invest $1,000 in Right Now

Cineplex has emerged from the pandemic riddled with debt but also with a stronger underlying business and stock that grossly…

Read more »

Golden crown on a red velvet background
Dividend Stocks

3 Top Dividend Stocks to Start a Growing Passive Income Stream

Start a growing passive income stream with shares like Canadian Utilities that boast five decades of dividend growth.

Read more »

Stocks for Beginners

3 Growth Stocks Wall Street Might be Sleeping On, But I’m Not

These growth stocks have more than doubled in the last year, yet there could certainly be more growth on the…

Read more »

diamonds, hidden gems
Investing

2 Undervalued Gems to Watch in March 2024

Value stocks such as Air Canada and Exchange Income trade at a compelling discount to consensus price target estimates.

Read more »

TFSA and coins
Dividend Stocks

TFSA Investors: Where to Put $7,000 in 2024

These top TSX dividend stocks now offer yields near 8%.

Read more »

Coworkers standing near a wall
Energy Stocks

3 Things About Enbridge Stock Every Smart Investor Knows

Enbridge stock (TSX:ENB) continues to be one of the best dividend stocks out there, but with a payout ratio of…

Read more »