January 20, 2019

Pengrowth Energy Corp (PGF)

 

Pengrowth Energy Corp. (PGF) is one of the many Canadian energy plays on the TSX. The current version of the company is the product of a restructuring that took play January 1, 2011.  Along with many other energy trusts at the time, the Pengrowth Energy Trust morphed into a dividend-heavy corporation because of the change in taxation rules on trusts and their distributions.  The new corporation combined the former Pengrowth Energy Trust, Pengrowth Corporation, Monterey Exploration Ltd., and Pengrowth Energy Coproation, into the modern conglomerate that you see today.  By combining the former subsidiaries, Pengrowth hopes to streamline their operations for maximum efficiency.  The energy company has a 66% working interest in about 200 properties across Saskatchewan, Alberta and British Columbia.  Pengrowth’s (PGF) current reserves are an estimated 320 million barrels of oil equivalent, and the reserve life index is 11.1 years.  Right now the company is producing approximately 75,000 boe per day (which is an improvement over what experts had predicted earlier in the year).  It’s main assets are in the Swan Hills and Monterey oil formations.  Pengrowth’s (PGF) leap forward to become a legitimate player in Canada’s oil and gas industry cam in 2007 when the company purchased undeveloped properties from ConocoPhillips for a cool $1 billion.  At the time, this was one of the largest acquisitions ever for an energy trust.

 

Pengrowth Energy Corp (PGF) lists their priorities and focus as follows:

 

  1. Focus on large accumulations of oil and gas
  2. Utiliize new technology to squeeze more from existing pools
  3. Utilize unconventional technology to known hydrocarbon accumulations to achieve economic production
  4. Ensure financial strength & flexibility
  5. Strong balance sheet
  6. Sustainable business model
  7. Hedge as required
  8. Strive to be the most efficient operator
  9. Lowest total cost structure
  10. Focus everyday on being low cost

 

The latest news coming out of Pengrowth headquarters is their recent issuing of shares.  With the company’s valuation at a recent high due to rising oil prices, and increased earnings reports, Pengrowth (PGF) sought to raise capital to the tune of $300 million.  The company recently changed its short-term outlook from a conservative stance, to a much more aggressive one; consequently, they recent announced that their 2011 capital expenditure budget would rise by $60 million (hence the additional funding needed).  This is likely a precursor to some acquisitions or increased operations by the energy company.  The offering was led by BMO Nesbitt Burns.

 

 

 

 

 

Pengrowth Energy Corp. (PGF) shares are currently trading around $10.50.  The oil giant has a market capitalization of almost $3.5 billion.  This price is significantly off of the 52-week high ($13.96).  The price is indicative of the recent sector downturn, and the company’s annual dividend of $0.84 is fairly lucrative at that price.  The dividend yield of 8.20 is definitely attractive in this income-starved environment.  That being said, the Performance-to-Earnings ratio of 35 and Forward P/E of 24, scares me a little.  Even at $10.50, the stock is slightly overvalued at this point in my opinion.

 

Pengrowth Energy Corp. (PGF) Technical Analysis:

PGF Trend Analysis

PGF is on a down trend, click here to get your PGF free trend analysis report.

 

Pengrowth Energy Corp. (PGF) Stock Graph:

TSE PGF

Pengrowth Energy Corp. (PGF) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
PGFPengrowth Energy Corp12.516.71101.010.2511329-21.8413-15.15152