Consider these three independent oil and gas companies operating in western Canada as possible additions to your energy portfolio.
1. ARC Resources
ARC Resources (TSX: ARX) is one of the largest conventional oil and gas companies in Canada. ARC focuses on developing high quality, long-life assets. The company’s operations are across western Canada. In 2013, ARC Resources advanced large-scale development plans for its Montney assets in northern Alberta and northeast British Columbia. The company holds roughly 900 net sections of Montney land in some of the finest parts of the play.
In Q1 2014, ARC achieved record production of 105,699 barrels of oil equivalent per day. This was 11% higher than Q1 2013 and 5% higher than Q4 2013.
In June, ARC Resources confirmed a July 15, 2014 dividend amount of $0.10 per share. ARC pays out dividends monthly. ARC’s current dividend yield is 3.94% and its dividend rate is $1.20. Its three-year average dividend growth rate is 33.33%. In 2013, ARC paid more than $374 million in dividends to its shareholders.
2. Athabasca Oil
Athabasca Oil (TSX: ATH) has a varied group of thermal and light oil assets. Its Light Oil portfolio is more than 2.7 million acres of petroleum and natural gas rights in a number of liquids-rich resource plays in northwestern Alberta. Regarding Thermal Oil assets, it has accrued more than 1.4 million (net) acres of oil sands leases in the Athabasca area of northern Alberta.
For Q1 2014, Athabasca Oil produced an average of 6,299 barrels of oil equivalent per day with 47% liquids. This was in line with its guidance of 6,000 to 6,500 barrels of oil equivalent per day.
The company plans to sell a 40% interest in the Dover West oil sands venture to partner PetroChina for $1.3 billion. The Dover West Sands has 87 million bbl of probable reserves and approximately 2.8 billion bbl of contingent resources. The Dover West area is around 240,000 net acres of stacked sand and carbonate reservoirs. It is 90 kilometres northwest of Fort McMurray, Alberta.
3. Penn West Petroleum
Penn West Petroleum (TSX: PWT)(NYSE: PWE) is one of Canada’s largest conventional oil and natural gas producers. Penn West is focusing its development activities on projects with the highest returns in three of its core areas. These are Cardium, Viking and Slave Point in western Canada.
In Q1 2014, 80% of the company’s capital spending was targeted to these three core assets. Penn West states, “Our focus in the Cardium is to improve per well cost performance and reduce cycle times to become the benchmark operator as we ramp activity progressively over the next several years.”
Furthermore, Penn West is engaging in asset disposition of non-core assets. Part of the company’s long-term strategy includes $1.5-2 billion of asset dispositions.
At the end of April, Penn West Petroleum announced its Q2 2014 dividend of $0.14 per share. The company’s current dividend yield is 6% and its dividend rate is $0.56.
Western Canada oil and gas projects offer investment opportunities for those desiring an energy aspect to their portfolios. These three companies are worthy of due diligence as investment vehicles for years to come.
