Topaz Energy Corp. is raising its 2021 guidance to recognize recent acquisitions and signalling its intent to continue to be a buyer following its $250-million initial public offering in October.
The Calgary-based company says it expects average royalty production of about 11,700 barrels of oil equivalent in 2021, up from 10,300 boe/d of actual output in the last three months of 2020.
It also expects revenue from its gas processing and other assets to rise by about 25% to $50.8 million from the actual level of $40.6 million in 2020.
Topaz was created by oil and gas producer Tourmaline Oil Corp. — Canada’s largest natural gas producer — in late 2019 to hold petroleum processing and handling assets that it felt were not being recognized in its share price.
It says it had net income of $8.3 million on revenue of $30.7 million in the fourth quarter of 2020, up from a net loss of $2.9 million on revenue of $26.4 million in the third quarter. Meanwhile, earnings before interest, taxes, depreciation, and amortization rose to $27 million from $24 million.
After paying its expected 2021 dividend of 80 cents per share, and assuming the midpoint of guidance range, Topaz estimates it will exit 2021 with $121 million of working capital, said CEO Marty Staples on a Thursday morning conference call.
“We’re still seeing a tremendous amount of opportunity and we’re looking for a tremendous amount of opportunity right now,” he said when asked about the current acquisition market.
“When you see a big run in oil (prices) like we’ve seen, the goalposts get a little wider but it certainly doesn’t stop us from being able to transact on things. I think we provide a unique form of capital to different operators that are out there right now and I think there’s going to be a need for that.” 29dk2902l