Easy Money in Colombia Oil Patch?

Easy Money in Colombia Oil Patch?
Oil & gas prices are once again trending higher. No surprise here.

Between shaky supply, assorted disruptions in the supply chain from two wars, and a plethora of “economic sanctions”, the bias for prices can only be higher going forward.

It’s obvious. Yet, in our algorithm-twisted markets, many oil & gas stocks have yet to be repriced to reflect these dynamics.

Where should energy investors go to harvest the opportunities here? How about Colombia?

With an increasingly robust oil & gas sector, the Colombian oil patch offers no shortage of undervalued investment prospects.

Just 10 days ago, Colombia-based NG Energy International Corp (CAN:GASX / US:GASXF) reported its guidance for 2024.
  •   Average Gross Production of 25 – 35 MMcf/d
  •   Cash flow from operations of USD$20 - $25 million

This is derived from 3P reserves of 415.1 Bcf, with an NPV of USD$466.

Yet, the market cap for GASXF is currently a very stingy USD$149 million. That's less than half of where it was trading toward the end of 2021 – when market conditions were similar.

Then there is Arrow Exploration Corp (CAN:AXL / US:CSTPF), also operating in Colombia. With a market cap of only USD$86 million, Arrow has the following reserves profile.
  •   1P reserves with NPV of USD$134.88
  •   2P reserves with NPV of USD$280.22 million
  •   3P reserves with NPV of USD$445.02 million

Similar reserves to GASXF, but trading at not much more than half of its market cap.

Looking for bigger numbers and better value? How about Colombia-based LNG Energy Group (CAN:LNGE / US:LNGNF)? The Company only started trading on September 12, 2023, so it’s still flying under the radar of most oil & gas investors.

But LNGNF has already assembled an impressive portfolio of oil & gas assets. On March 12, 2024, LNG Energy Group announced its year-end reserves for 2023.
  •   1P reserves with NPV of USD$171 million
  •   2P reserves with NPV of USD$306 million
  •   3P reserves with NPV of USD$577 million

With a market cap of only USD$26.67 million, LNGNF oozes value.

Like Goldilocks and the Three Bears, investors have to decide for themselves which of these three stocks is “just right” for their portfolio. However, for investors wanting the most bang-for-their-buck (and upside potential), LNG Energy Group offers a stellar value proposition.

DISCLOSURE: LNG Energy Group is a paid client of Dynamic Wealth Research.

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