TSX:PRQ

Stock Analysis Report

Petrus Resources

Executive Summary

Petrus Resources Ltd., an energy company, engages in the acquisition, exploration, development, and exploitation of oil and gas development assets in western Canada.

Rewards

Trading at 88.6% below its fair value

Revenue is forecast to grow 6.16% per year

Earnings have grown 4.4% per year over the past 5 years

Risk Analysis

Does not have a meaningful market cap (CA$10M)

Currently unprofitable and not forecast to become profitable over the next 3 years



Snowflake Analysis

Fair value with imperfect balance sheet.

Share Price & News

How has Petrus Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PRQ has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-7.1%

PRQ

0.6%

CA Oil and Gas

0.6%

CA Market


1 Year Return

-63.2%

PRQ

0.2%

CA Oil and Gas

5.8%

CA Market

Return vs Industry: PRQ underperformed the Canadian Oil and Gas industry which returned 0.2% over the past year.

Return vs Market: PRQ underperformed the Canadian Market which returned 5.8% over the past year.


Shareholder returns

PRQIndustryMarket
7 Day-7.1%0.6%0.6%
30 Dayn/a-2.3%0.5%
90 Day11.4%3.8%3.6%
1 Year-63.2%-63.2%4.6%0.2%9.1%5.8%
3 Year-92.9%-92.9%-7.0%-16.9%15.4%5.0%
5 Yearn/a-9.6%-24.0%33.6%14.0%

Price Volatility Vs. Market

How volatile is Petrus Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Petrus Resources undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PRQ (CA$0.2) is trading below our estimate of fair value (CA$1.72)

Significantly Below Fair Value: PRQ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PRQ is unprofitable, so we can't compare its PE Ratio to the Oil and Gas industry average.

PE vs Market: PRQ is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate PRQ's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: PRQ is good value based on its PB Ratio (0.1x) compared to the CA Oil and Gas industry average (0.7x).


Next Steps

Future Growth

How is Petrus Resources forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

6.2%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if PRQ's forecast earnings growth is above the savings rate (1.4%).

Earnings vs Market: Insufficient data to determine if PRQ's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PRQ's revenue (6.2% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: PRQ's revenue (6.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PRQ is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Petrus Resources performed over the past 5 years?

4.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PRQ is currently unprofitable.

Growing Profit Margin: PRQ is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: PRQ is unprofitable, but has reduced losses over the past 5 years at a rate of 4.4% per year.

Accelerating Growth: Unable to compare PRQ's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: PRQ is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (6%).


Return on Equity

High ROE: PRQ has a negative Return on Equity (-16.21%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Petrus Resources's financial position?


Financial Position Analysis

Short Term Liabilities: PRQ's short term assets (CA$11.0M) do not cover its short term liabilities (CA$104.0M).

Long Term Liabilities: PRQ's short term assets (CA$11.0M) do not cover its long term liabilities (CA$82.7M).


Debt to Equity History and Analysis

Debt Level: PRQ's debt to equity ratio (113.5%) is considered high.

Reducing Debt: PRQ's debt to equity ratio has increased from 24.4% to 113.5% over the past 5 years.


Balance Sheet

Inventory Level: PRQ has a high level of physical assets or inventory.

Debt Coverage by Assets: PRQ's debt is not covered by short term assets (assets are 0.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable PRQ has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: PRQ is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 40.1% per year.


Next Steps

Dividend

What is Petrus Resources's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.9%markettop25%5.3%industryaverage4.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate PRQ's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate PRQ's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PRQ's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PRQ's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PRQ's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Neil Korchinski (42yo)

3.3yrs

Tenure

CA$415,250

Compensation

Mr. Neil Korchinski, P. Eng., has been the Chief Executive Officer, President of Petrus Resources Ltd. since November 7, 2016. Mr. Korchinski served as the Chief Operating Officer and Vice President of Eng ...


CEO Compensation Analysis

Compensation vs Market: Neil's total compensation ($USD313.35K) is above average for companies of similar size in the Canadian market ($USD155.16K).

Compensation vs Earnings: Neil's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Neil Korchinski
President3.3yrsCA$415.25k0.50% CA$47.8k
Cheree Stephenson
CFO & VP of Finance4.3yrsCA$338.04k0.37% CA$35.8k
Marcus Schlegel
Vice President of Engineering3.1yrsCA$280.59kno data
Brett Booth
Vice President of Land3.1yrsCA$259.20kno data
Jamie Kuntz
Manager of Facilities and Pipelines5.6yrsCA$271.00kno data
Robert Moncrieff
Field Production Foreman0yrsCA$162.20kno data

3.3yrs

Average Tenure

Experienced Management: PRQ's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Neil Korchinski
President3.3yrsCA$415.25k0.50% CA$47.8k
Stephen White
Independent Director4yrsCA$68.49k0.24% CA$23.3k
Donald Gray
Independent Chairman of the Board4.3yrsCA$89.49k14.79% CA$1.4m
Patrick Arnell
Independent Director4.3yrsCA$74.49k0.40% CA$38.8k
Donald Cormack
Independent Director4.3yrsCA$78.49k0.044% CA$4.2k

4.3yrs

Average Tenure

58yo

Average Age

Experienced Board: PRQ's board of directors are considered experienced (4.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Petrus Resources Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Petrus Resources Ltd.
  • Ticker: PRQ
  • Exchange: TSX
  • Founded:
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: CA$9.647m
  • Shares outstanding: 49.47m
  • Website: https://www.petrusresources.com

Number of Employees


Location

  • Petrus Resources Ltd.
  • 240 – 4th Avenue SW
  • Suite 2400
  • Calgary
  • Alberta
  • T2P 5H4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PRQTSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 2016
PTRU.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDFeb 2016
6P4DB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 2016

Biography

Petrus Resources Ltd., an energy company, engages in the acquisition, exploration, development, and exploitation of oil and gas development assets in western Canada. It primarily explores for natural gas, natural gas liquids, and crude oil. The company holds 55% working interest in Ferrier/Strachan Area, which include 31,767 net acres of undeveloped land and 13,216 net acres of developed land located in west central Alberta near the town of Rocky Mountain House, Alberta. It also has an average of 61% working interest in the Thorsby/Pembina area covering 24,929 net acres of undeveloped land and 47,862 net acres of developed land located in southwest of Edmonton, Alberta; and an average of 52% working interest in the Foothills area that consists of 35,448 net acres of undeveloped land and 7,647 net acres of developed land located northwest of Rocky Mountain House, Alberta. The company is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 01:18
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.