(Idea) Bonterra Energy Update
By: Jon Costello
Note: Dollar references are to Canadian dollars unless otherwise specified.
E&Ps have been trading lower due to a tepid oil price outlook over the next twelve to eighteen months. But oil prices will eventually rise. When they do, E&P stocks will follow.
Today's depressed sentiment makes this a good time to search for E&P stocks with explosive upside amid higher commodity prices. Bonterra Energy (BNE:CA) is a prime example.
Bonterra jumps out as having one of the worst stock charts among North American E&Ps. The shares have been on a steady ride lower since 2022 when high commodity prices caused them to soar.
Source: Yahoo! Finance, Nov. 26, 2024.
After its multi-year decline, Bonterra is being valued as if WTI will remain in the low US$70s indefinitely. However, its shares offer multi-bagger potential at even US$80 per barrel.
The shares present an attractive buying opportunity for investors who can hold until WTI breaks out of its current doldrums. However, it is also important to understand the risks in the picture.