December 10, 2018

Trilogy Energy Corp (TET)

 

 

Trilogy Energy Corporation (TET) is an mid-sized Canadian energy company that was brought into existence as a spinoff of Paramount Resources in the spring of 2005.  It operated under the structure of an energy trust until 2010 (which seen most of Canada’s energy trust switch over to alternate business models due to new tax regulations).  The company is focused on developing assets in the Kaybob area.  This allows Trilogy to keep a tight control on costs and associated risk.  While the energy company’s goal under the energy trust model was to maintain a certain level of production and pass earnings on to shareholders, Trilogy (TET) has developed more of a growth model after their re-structuring in 2010.  They have also been on the cutting edge of technology in the energy field and have made great use of horizontal drilling and completion techniques, which have allowed the company to exploit smaller reservoirs and further cut costs.  Since 2012 management has seen fit to reinvest more of the company’s earnings into growing and developing a larger asset base.

 

Over 93% of Trology’s production came from their Kaybob property last year.  It also accounted for 88% of the capital expenditures, and has been identified as the main production focus of 2011 as well.  Trilogy (TET) has found that this area represents the most efficient and profitable drilling opportunities for the company going forward, and that it has a large quantity of high quality gas assets.  Since the company has already sunk the majority of the infrastructure costs into the area, management believes that the most profitable years are still ahead in terms of profit margin.  In 2010 the Kaybob property produced over 21,200 boe/d, which was a large increase from the 17,837boe/d that were produced in 2009.  Thus proving that the capital expenditures and investment in technology are paying immediate dividends, especially when it came to using horizontal wells.  It is definitely worthy for potential investors of Trilogy Energy (TET) to note that board chairman Clay Riddell recently purchased an additional 100,000 shares of the company.  While these stock options were realized at a huge discount relative to the market premium, it still represents a substantial vote of confidence for the company.

 

Trilogy is recent trading in the $36.00 range.  This is after an explosion in stock value during 2011 from a 52-week low of $11.65.  It has a market capitalization of $4,269 million.  I’m not quite sure where the confidence has come from for investors to boost the price of this company so high.  While the energy sector is notoriously volatile, a 300% jump in share price is definitely considerable.  With a very high Price-to-Earnings ratio of over 30, I’m not rushing out to buy the stock at current prices.  The company’s annual dividend of $0.42, gives the company a yield of merely 1.10%.  This just isn’t competitive with the other companies in the energy sector.

 

Trilogy Energy (TET) Technical Analysis:

TET trend analysis

TET is trading on a strong uptrend, CLICK HERE to get your free trend analysis report on TET.

Trilogy Energy (TET) Stock Graph:

TSE TET

Trilogy Energy (TET) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
TETTrilogy Energy Corp21.781.93528.160.1966435-33.33595-24.32433