Q: Hello Wonder Team at 5i. Could I ask your thoughts on Tenaz Energy, they seem to have gone straight up into earnings coinciding w Iran conflict. How did the earnings report look, would you be comfortable owning it here (around $55). What would be a reasonable price? Am I correct in assuming price is correlated to European Natural Gas Benchmark TTF prices? And a final "long shot" question - if the Ras Laffan Nat Gas facility in Qatar continues to suspend operations, will this bode well for the share price of Tenaz? Thank you for your thoughts and impressions on where the share price might be going next. Much appreciated. Gord
5i Research Answer:
Earnings were excellent with a giant beat on earnings per share. Production volume rose 33% and cash flow rose more than 50%, driven by acquisitions and drilling success. EPS is expected to more than double next year. There is some leverage, but growth is indeed there. It is also quite expensive, but again, due to growth. We would be comfortable owning at $55. It is up today. There is some price correlation to TTF prices. And any disruptions in the Middle East we think would move the stock, likely though perhaps temporarily (though the company of course still gets higher cash flow in the interim).