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

dividends can compound over time
Bank Stocks

Is National Bank of Canada Stock a Buy Now?

National Bank of Canada stock should continue to compound investors' returns post CWB acquisition

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

Cash Kings: 3 TSX Stocks That Pay Monthly

These TSX stocks pay monthly dividend and offer high yield near current market price, making them top investments for passive…

Read more »

Dividend Stocks

An 8.1% Dividend Stock Paying Cash Every Single Month

This dividend stock is a strong option not just for income in general, but also for paying out every month!

Read more »

stocks climbing green bull market
Dividend Stocks

2 TSX Stocks to Hold for Steady Gains

These TSX stocks are backed by a defensive business model and consistently deliver above-average returns for their shareholders.

Read more »

woman looks at iPhone
Retirement

How I’d Allocate $50,000 in Retirement Stocks in Today’s Market 

Here's how to invest in today’s stock market, presenting both opportunities to grow a retirement portfolio and risks of depleting…

Read more »

Investing

Can Air Canada Stock Finally Recover in 2025?

Down over 60% from all-time highs, Air Canada stock is expected to underperform in the near-term. However the TSX stock…

Read more »

space ship model takes off
Tech Stocks

1 Canadian Stock That Could Be the Best Investment This Decade

This tech stock might not seem like the most obvious buy, but trust me, it certainly should be.

Read more »

dividend growth for passive income
Dividend Stocks

5 Canadian Dividend Stocks With Years of Secure Payouts Ahead

These Canadian dividend stocks have visibility over future payouts, implying investors can rely on them for steady passive income.

Read more »