Canada's Saturn Oil & Gas Q2 revenue rises on higher output, prices

Overview

• Canada light oil producer's Q2 revenue hit record, driven by higher production and prices

• Q2 production exceeded guidance for eighth straight quarter

• Company repurchased 1.3 mln shares in Q2

Outlook

• Saturn Oil Gas expects Q3 capital spending of $165-$175 mln

• Company sees Q3 production averaging 42,000-43,000 boe/d

• Saturn Oil Gas targets 2026 exit production of 48,000-50,000 boe/d

Result Drivers

• ACCELERATED CAPITAL SPENDING - Co advanced C$20 mln of capital from Q3 into Q2 to bring production on sooner and capture higher oil prices

• STRATEGIC ACQUISITIONS - C$45 mln in tuck-in acquisitions expanded scale, drilling inventory and asset value

• OPERATIONAL OUTPERFORMANCE - Production exceeded guidance for eighth straight qtr, partly offset by weather-related downtime in June

Company press release: ID:nNFC3XmNw7

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil gas exploration and production peer group is "buy"

• Wall Street's median 12-month price target for Saturn Oil Gas Inc is C$8.25, about 57.7% above its July 28 closing price of C$5.23

• The stock recently traded at 5 times the next 12-month earnings vs. a P/E of 27 three months ago

Reuters Recommended Reads

• July 28 - Canada's Cardinal Energy Q2 adjusted funds flow jumps 150% on higher output

• July 28 - Canada's Tamarack Valley Q2 revenue rises on higher oil prices

• July 29 - Canada's Surge Energy Q2 revenue rises 48%, net income more than doubles on the back of oil, NGL price surge

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)