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Recent Interviews

Dirk Graszt, CEO, Clean Logistics SE

Dirk Graszt
CEO | Clean Logistics SE
Trettaustr.32, 21107 Hamburg (DE)

info@cleanlogistics.de

+49-4171-6791300

Interview Clean Logistics: Hydrogen challenge to Daimler + Co.


Matthew Salthouse, CEO, Kainantu Resources

Matthew Salthouse
CEO | Kainantu Resources
3 Phillip Street #19-01 Royal Group Building, 048693 Singapore (SGP)

info@krl.com.sg

+65 6920 2020

Interview Kainantu Resources: "We hold the key to growth in the Asia-Pacific region".


Justin Reid, President and CEO, Troilus Gold Corp.

Justin Reid
President and CEO | Troilus Gold Corp.
36 Lombard Street, Floor 4, M5C 2X3 Toronto, Ontario (CAN)

info@troilusgold.com

+1 (647) 276-0050

Interview Troilus Gold: "We are convinced that Troilus is more than just a mine".


22. September 2021 | 10:28 CET

BP, Saturn Oil + Gas, Gazprom: Where growth meets low valuations

  • Oil
Photo credits: pixabay.com

The climate turnaround is coming, but it will not happen overnight. One raw material that will be needed for a long time to come is oil. OPEC recently increased its demand forecast for 2022 by 4.2 million barrels - every day. The oil companies, which are currently valued low on the stock market, will therefore continue to earn good money for a long time to come. But here, too, the companies with the edge are those that are flexible and have a sustainable focus. We present three stocks.

time to read: 3 minutes by Nico Popp
ISIN: BP PLC DL-_25 | GB0007980591 , SATURN OIL+GAS O.N. | CA80412L1076 , GAZPROM ADR SP./2 RL 5L 5 | US3682872078


John Jeffrey, CEO, Saturn Oil + Gas Inc.
"[...] The Oxbow Asset now delivers a substantial free cash flow stream to internally fund our impactful drilling and workover programs. [...]" John Jeffrey, CEO, Saturn Oil + Gas Inc.

Full interview

 

Author

Nico Popp

At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

About the author


BP dares the green turn

One oil multinational that is already investing heavily in renewable energy is BP. In addition to Scotland, the Company is also trying to gain a foothold as a wind farm operator off the coast of Norway. At the same time, BP continues to produce oil and gas. Specifically, it is working in Angola and the Gulf of Mexico. However, BP earns most of its money in the refining and distribution of fossil fuels. But the Company's revenue figures show that it needs to change something. Between 2015 and 2020, sales fell by an average of about 4%. Cash flow fell by up to 8.7% in the same period. The figures show: BP's stock is not a growth story.

On the stock market, however, BP is helped by solid oil prices. Although the recent China uncertainty also infected the oil price, the trend is positive on a one-year view - BP's share price went up by around 23%. Beyond the GBP 330 mark, an even stronger recovery is possible in the long term. However, the fact that BP has become the focus of many environmentalists and now has a bad image speaks against the share. Although BP is working on better ESG ratings, this is an arduous task for a large corporation.

Saturn Oil & Gas: Organic growth and a P/E ratio just above 1

Saturn Oil & Gas, on the other hand, is an entirely different story. At the Canadian oil producer, both ESG key data and growth are right. The Canadians have far-reaching plans to restore their production sites and plant trees, among other things. Saturn Oil & Gas is also committed to gender equality and specifically invites women for internships to make the energy industry in Canada more female. Beyond these soft factors, Saturn Oil & Gas shines with impressive numbers: Thanks to the Oxbow oil field's acquisition on outstandingly favorable terms by industry standards, the Company has increased its production by 2,000% this year. Just yesterday, the Company announced that an independent appraiser valued the reserves on Oxbow at CAD 435.7 million using standard valuation methods - that is, CAD 0.87 per share. As of now, net operating income is expected to be around CAD 70 million annually. Compared to the current valuation, the share shines with a price-earnings ratio of just over 1.

The acquisition of the Oxbow property was primarily financed by Saturn through a loan from private lenders. In the past, family offices were under discussion. At the same time, Saturn succeeded in securing the existing production to repay the loan within two years, irrespective of the further development of oil prices. For months now, Saturn has been generating a daily free cash flow of around CAD 265,000 - after hedging expenses. The Company is already investing these funds in organic growth. It is confident that it will maintain high output from the new Oxbow property while expanding its involvement in the existing Viking area, where Saturn has already been very successful in the past. The stock has come down a bit in the wake of the China concerns. However, valuation, growth prospects and ESG profile suggest Saturn can be one of the best energy stocks in the coming years.

Gazprom: ESG still lacking

Gazprom is less focused on sustainability. Nevertheless, the share is currently in demand. The Nord Stream 2 pipeline to Europe is on its way, and business with China is also promising. Gazprom has enormous reserves, and the potential for cost-effective production is considerable. The largest business segment is natural gas, accounting for 55% of sales; oil plays only a minor role at 7.7%. In recent quarters, Gazprom has been on a growth path, which has also benefited the stock. However, there are weaknesses in the ESG profile.


While Gazprom can easily outperform BP in the duel of the oil multinationals, the comparison with Saturn Oil & Gas is quite different. Although the latter is a relatively small company, the risks seem low given the existing oil price hedge. Moreover, since Saturn generates free cash flow, it can once again focus on organic growth. The Company, rooted in Saskatchewan, Canada, knows the industry well and has already been successful in this area.


Author

Nico Popp

At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

About the author



Conflict of interest & risk note

In accordance with §34b WpHG we would like to point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH may hold long or short positions in the aforementioned companies and that there may therefore be a conflict of interest. Apaton Finance GmbH may have a paid contractual relationship with the company, which is reported on in the context of the Apaton Finance GmbH Internet offer as well as in the social media, on partner sites or in e-mail messages. Further details can be found in our Conflict of Interest & Risk Disclosure.


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  • Oil

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Nel, JinkoSolar, Saturn Oil + Gas: It looks good!

  • Oil

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FuelCell Energy, Saturn Oil + Gas, Gazprom - The Renaissance of fossil fuels

  • Oil

There is no question that Germany has already achieved a great deal in terms of climate protection. In 2020, about 45% of its electricity came from renewable sources. However, the goal of becoming greenhouse gas neutral by 2045 is still a long way off. For this plan to become a reality, wind power still needs to be expanded significantly. The first half of the current year shows that it will not be possible to do without fossil fuels in the coming years. According to calculations by the Federal Statistical Office, over 56% of the total 258.9 billion kWh of electricity generated in Germany came from conventional sources such as coal, natural gas and nuclear energy.

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