Is Canada’s Razor Energy Corp (CVE: RZE) a Stock Worth Watching?

By Kirsteen Mackay

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Canadian-listed Razor Energy Corp (CVE: RZE) is involved in oil production, oil services, geothermal power generation and carbon capture.

Razor Energy Corp (CVE: RZE) is a publicly-traded junior oil and gas company in Alberta, Canada. It's a leading-edge enterprise with a couple of interesting subsidiaries. 

The company is focused on acquiring and enhancing producing oil and gas properties in Alberta.

Blade Energy Services is Razor's subsidiary in oilfield services and environmental management. While FutEra is Razor Energy's subsidiary intent on transitioning energy to cleaner power generation and sustainable infrastructure. Geothermal is a key area of interest for the company from its Swan Hills Geothermal Power Corp division.

What is Razor Energy Corp?

Razor Energy Corp. operates as an oil and gas development and production company. It focuses on acquiring, enhancing, and exploring oil and gas properties. Razor's property portfolio includes Swan Hills, Kaybob, and District South area.

The company believes its Swan Hills reef light oil pools are ideally suited for carbon capture, utilization and storage and enhanced oil recovery purposes.

Razor Energy is led by experienced management and a strong, committed Board of Directors, with a long-term vision of growth focused on efficiency and cost control in all areas of the business.

Razor currently trades on Canada's TSX Venture Exchange under the ticker "RZE.V."

What is FutEra?

FutEra is focused on creating transitional power and sustainable infrastructure solutions to commercial markets and communities, both in Canada and globally. Currently, it is developing a 21MW co-produced geothermal and natural gas hybrid power project in Swan Hills, Alberta. 

The Swan Hills Geothermal Project will be capable of generating up to 21MW of grid-connected power, of which up to 30% will be sustainable clean power generation.

What is Blade Energy Services?

Blade Energy Services is a subsidiary of Razor. Operating in west-central Alberta, Blade's primary services include fluid hauling, road maintenance, earthworks including well site reclamation and other oilfield services.

Financial Metrics Today

  • Market Cap: $23.6m

  • Fully Diluted Shares Outstanding: 21m

  • P/S: 0.4

  • Financing: On October 22, 2021, the company closed a Private Placement of common shares with Alberta Investment Management Corporation and certain members of management which raised $1,890,000.

  • Production: Reactivation work in Razor's operated and non-operated properties has increased current production to approximately 4,700 boe/d based on field estimates.

  • Production Guidance: The Company expects to exit 2021 with 5,000 boe/d or higher production.

Q3 Highlights

  • Swan Hills Acquisition: Strategic consolidation adding long life low-risk light oil reserves, production and cash flow underpinned by industry-leading annual base decline rate of 10%.

  • Net Income: $9.7m ($12.1m gain concerning Swan Hills acquisition)

  • Production: Averaged 3,567 boe/d (13% increase Q/Q)

  • Geothermal Project: Commenced project execution on Swan Hills Geothermal Project (estimated completion Q1 2022)

  • ESG and Sustainability: Deposited approximately 2,500 tonnes of hydrocarbon impacted soils into Razor's recently completed treatment facility in Virginia Hills, which employs bioremediation to treat hydrocarbon-impacted soils. This first batch of soil is expected to be remediated by Q2 2022.

  • Reducing Decommissioning Liabilities: Settled $1.1m of decommissioning obligations, including $0.3m related to government grants received for well site rehabilitation through Alberta's Site Rehabilitation Program.

Who Are Razor Energy's Competitors?

Razor Energy's rivals and comparable companies include:

  • Canadian Natural Resources Limited (TSE: CNQ)

  • Imperial Oil Limited (NYSEAMERICAN: IMO)

  • Tourmaline Oil Corp. (TSE: TOU)

  • ARC Resources Ltd. (TSE: ARX)

  • Whitecap Resources Inc. (TSE: WCP)

  • Crescent Point Energy Corp. (NYSE: CPG)

Energy stocks face several headwinds but benefit from elevated oil and gas prices. As a junior stock Razor Energy is a speculative investment prone to share price volatility, but its Swan Hills Geothermal Power acquisition and interest in carbon capture give this company interesting angles worth watching.

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Topics:
energy
Energy Equipment and Services
Oil and Gas Equipment and Services
Oil
Industries:
Energy

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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