06. October 2021 | 12:56 CET
BYD, Saturn Oil + Gas, Royal Dutch Shell - Explosion on the oil market
The Organization of Petroleum Exporting Countries OPEC and its alliance partners led by Russia (OPEC+) have decided to increase production only gradually, despite tight supply. Demand is recovering strongly as the Delta variant of the coronavirus subsides. The result is skyrocketing oil prices, which are the highest they have been in seven years. In contrast, oil producer shares are still far from their highs.
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ISIN: BYD CO. LTD H YC 1 | CNE100000296 , SATURN OIL+GAS O.N. | CA80412L1076 , ROYAL DUTCH SHELL A EO-07 | GB00B03MLX29
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Saturn Oil & Gas - Extreme undervaluation
A prime example of massive undervaluation compared to the peer group is currently provided by the Saturn Oil & Gas share. Analysts from Ryder Scott determined that the value of the newly acquired Oxbow area is CAD 0.87 per share. If the free cash flow of CAD 265,000 per day continues, this will add about CAD 80 million to the coffers of Saturn Oil & Gas. The stock market value of Saturn Oil & Gas is currently around CAD 95 million at a share price of CAD 0.19. Thus, the Company currently has a price-earnings ratio for 2022 of just over 1.
By completing a transformative acquisition of light oil assets in the Oxbow area of southeastern Saskatchewan, one of the most economically viable oil plays in North America, the Canadians rose to become one of North America's leading petroleum producers. In one fell swoop scaling oil production by a factor of twenty to 7.000 barrels per day. For the next three years, the Company also identified the potential to generate annual free cash flow by optimizing and re-completing more than 500 existing wells.
Further upside potential is offered by the 20:1 reverse stock split, which is expected to take place before the end of October. The elimination of the penny stock restriction will then allow institutional investors to acquire the stock. Things should get interesting on October 14, 2021. Here Saturn Oil & Gas CEO John Jeffrey will present the Company to the general public at the "International Investment Forum" online event. The IIF - International Investment Forum - will take place on October 14, 2021. Ten companies and their directors will present their companies and answer investors' questions via Zoom. Saturn Oil & Gas is on at 5:15 p.m. (CEST), more info at: www.ii-forum.com)
Royal Dutch Shell - Resistance breached
The shares of oil giant Royal Dutch Shell were put on the launch pad by the OPEC decision not to increase production volumes significantly. The acute shortage in the market will only be raised by the planned 400,000 barrels. As a result, Royal Dutch Shell was able to break out of the uptrend triangle under high volume at EUR 18 and leave behind the prominent resistance, which now serves as support for investors. The next price target is now EUR 23.34.
There was currently good news to report from Mexico. After Hurricane Ida caused considerable damage to the West Delta 143 offshore facility at the end of August, this has now been repaired, and production has continued. In the run-up to the hurricane, Shell and other operators were forced to evacuate and shut down most of their facilities in the Gulf of Mexico. At its peak, about 80% of Shell's production in the Gulf of Mexico was shut down. Shell's other Gulf of Mexico facilities - Appomattox, Enchilada/Salsa, Auger, Perdido and Stones - are already in production.
BYD - Growth in tact
Around 88% of passenger cars still roll along Germany's roads with combustion engines, but the transformation to battery-powered vehicles is in full swing. Alongside established carmakers such as Volkswagen or Tesla, the Chinese electromobility company BYD catches the eye with solid growth. In September alone, the Warren Buffett-funded company reached a production volume of 78,800, an increase of almost 85% compared to the same period last year. Analogously, car sales even grew by 89.9% to 80,100 units.
From a chart perspective, the stock broke away from the support area at EUR 26.00. It is now attempting a renewed run-up to the high for the year at EUR 30.69. In the long term, BYD is one of the most promising electromobility stocks.
The oil price is marching blithely on due to the limited production volume with rising demand. Royal Dutch Shell broke through its resistance area in the wake of the OPEC+ decision. Canadian oil producer Saturn Oil & Gas continues to be undervalued compared to its competitors. The Chinese carmaker BYD also has a positive chart picture.