Tenaz Energy (TSX:TNZ) Could Be 13% Undervalued On Dutch Gas Expansion
Recent updates around Tenaz Energy (TSX:TNZ) center on its push to scale natural gas production in the Netherlands, using multiple rigs and increased exposure to European gas pricing as a potential earnings factor.
The recent updates around Dutch gas expansion land on a stock that has already been moving firmly higher. A 1-day share price return of 2.33% and a 7-day share price gain of 3.76% build on a 90-day share price return of 31.47%. The year-to-date share price move of 170.01% and a 1-year total shareholder return of 177.30% sit on top of a very large 3-year total shareholder return of more than 16x, indicating that investors are treating Tenaz Energy’s growth plans and risk profile as increasingly attractive over both shorter and longer horizons.
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After a move this strong, the real question around Tenaz Energy is whether the recent surge already reflects the Dutch gas build out, or if the valuation still leaves meaningful upside on the table.
Most Popular Narrative: 13% Undervalued
Tenaz Energy’s most followed valuation storyline points to a fair value of about CA$81.67 per share, which sits above the recent close at CA$70.85. As a result, the current quote is being framed as a discount to that benchmark.
The build out of high quality Netherlands gas production, supported by multiple rigs across TEN operated, ONE Dyas operated and ENI operated wells, increases exposure to European gas pricing and can support higher revenue as more volumes move into the sales mix.
The Triton 10 barge and the pipeline of about 50 identified offshore workover opportunities provide a multi year program that is expected to add productive capacity at relatively low incremental capital, which can support net margins by spreading fixed costs over higher output.
See why 4 investors see Tenaz Energy as 13% undervalued.
Result: Fair Value of CA$81.67 (UNDERVALUED)
Still, heavy reliance on volatile European gas pricing and a front loaded C$300 million capital program means weaker prices or underperforming wells could quickly challenge the Tenaz Energy narrative.
Find out about the key risks to this Tenaz Energy narrative.
Next Steps
Sentiment around Tenaz Energy is clearly divided between opportunity and risk. Move quickly, review the full data set, and weigh the 3 key rewards and 5 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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