3 Oil and Gas Stocks Worthy of Your Portfolio

Operating in western Canada, these 3 companies are positioned for greater growth.

| More on:
The Motley Fool

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.

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 Michael Ugulini has no position in any stocks mentioned.

More on Investing

money cash dividends
Dividend Stocks

The 2 Stocks Every Dividend Investor Should Own for Reliable Cash

Dividend stocks offering consistent and reliable returns can be a crucial asset in any portfolio, especially for income-producing dividend portfolios.

Read more »

grow dividends
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These top TSX dividend-growth stocks now offer yields above 7%.

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold for Tax-Free Gains

Building a large, tax-free nest egg in your TFSA with growth stocks can give you more control over your tax…

Read more »

Group of people network together with connected devices
Tech Stocks

This Is the Best Overlooked AI Stock on the TSX Today

This AI stock has been a top growing in the last while, but remains overlooked despite its strong portfolio and…

Read more »

Women's fashion boutique Aritzia is a top stock to buy in September 2022.
Dividend Stocks

May Boycotts: Is Loblaw Stock in Trouble?

Even extreme fluctuations in consumer purchasing patterns may not impact a stock as aggressively as demoralizing actions like boycotts.

Read more »

Dice engraved with the words buy and sell
Stocks for Beginners

TD Stock: Buy, Sell, or Hold?

TD stock (TSX:TD) is under immense scrutiny during its money laundering probe, but this could also mean it is a…

Read more »

Different industries to invest in
Tech Stocks

Why This AI Stock Surged 363% in Just 1 Year

This AI stock has surged this year by almost 400%! And yet this could only be the beginning for this…

Read more »

Online shopping
Tech Stocks

2 Growth Stocks Bay Street Might Be Sleeping On, but I’m Not

I'm not sleeping on Taiwan Semiconductor (NYSE:TSM) stock. Shopify (TSX:SHOP) is a Canadian stock with similar growth rates.

Read more »