An Updated Reference Guide to What Drives Montney Performance.
Patrick O'Rourke, CFA 403-539-8615
Following our initial reference guide for Montney assets, we are refreshing our detailed look at our updated Montney coverage universe, highlighting the drivers of equity performance and diving into these metrics on a company by company basis.
2019 Has been a Challenging Year for Energy Equity Performance, but we Continue to Advocate for a Disciplined Fundamental Approach with a Focus on Near Term Return on Capital and Long Term Asset Capture
In our view, the Montney levered stocks that deliver the best returns to investors in the near term tend to be those with the best returns on capital. This is why our key drivers for stock selection are:
Inside the full report, we explain these concepts and their importance on equity returns, and their key determinants, which are asset quality, ability to get products to market (egress) and the ability to access capital. In particular, we are looking for companies that are able to create the most efficient capital velocity in the near term, or which have captured and de-risked large quantities of inventory, which will create high rates of return in the long term. The higher the velocity of capital, the greater the likelihood that assets support a return of capital to investor—something that has clearly become thematic in 2019.
Drivers of PDP NAV Growth & Capital Velocity
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