Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Q2/23 Highlight for Oil & Gas Co. is Close of Acquisition
Research Report

View Important Disclosures for this Article
Share on Stocktwits


Among other benefits, the transaction nearly doubles the firm's production in the Netherlands, noted a Research Capital Corp. report.

Tenaz Energy Corp.'s (TNZ:TSX) Q2/23 results were as expected, the highlight being the close of the XTO Netherlands acquisition, reported Research Capital Corp. analyst Bill Newman in an August 11 research note.

"The highly accretive XTO Netherlands acquisition provides additional cash flow, and the boost in working capital should position Tenaz favorably to pursue further acquisitions through consolidation of its interests in the Netherlands and other assets located in the European and Middle East and North African focus areas," Newman wrote.

As such, Research Capital maintained its CA$6 per share target price on the Canadian oil and gas explorer-producer, currently trading at about CA$2.55, noted Newman. The return to target implies a significant return for investors of 135%.

Tenaz is rated Speculative Buy.

Acquisition is Beneficial

Newman presented the benefits to Tenaz of its XTO Netherlands acquisition. It nearly doubled Tenaz's interest in six producing licenses in the Netherlands and nearly doubled its production there to about 1,250 barrels of oil equivalent per day (1,250 boe/d). Further, Tenaz gained from the deal about CA$46.7 million (CA$46.7M) in working capital and increased its working interest in a midstream company to 21%.

Further, a recently released independent contingent and prospective resources report of Tenaz's new Netherlands assets "showed significant additional upside potential," Newman wrote, "suggesting years of growth potential beyond currently booked reserves."

According to the report, the total best estimate of the contingent resource net to Tenaz is 4,300,000 barrels of oil equivalent (4.3 MMboe), which has an after-tax net present value discounted at 10% of $86M. As for the prospective resource, the total best estimate net to the company is 19.8 MMboe.

Production Over Time

Newman reported that Tenaz's Q2/23 production averaged 1,903 boe/d, below Research Capital's projection of 2,140 boe/d. The miss is attributed primarily to the maintenance of facilities being done in Canada and the Netherlands during the quarter.

Net Q2/23 production in Canada averaged 1,323 barrels per day. In the Netherlands, it averaged 580 boe/d.

The lower-than-expected production, along with a slightly higher general and administrative expense, led to a funds flow miss in Q2/23. It came in at US$3.4M versus Research Capital's US$5.1M estimate.

Despite Tenaz's production underperformance in Q2/23, management reiterated its average production guidance for 2023: 2,200–2,500 boe/d.

In the near term, total production should get a boost, starting in Q4/23, from four new wells in Canada's Leduc-Woodbend oil field. Tenaz already drilled two in Q2/23 and intends to drill the other two in Q3/23.

Want to be the first to know about interesting Oil & Gas - Exploration & Production investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. Subscribe

Important Disclosures:

  1. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  2. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

For additional disclosures, please click here.

Disclosures for Research Capital Corp., Tenaz Energy Corp., August 11, 2023

Analyst Certification I, Bill Newman, CFA, certify the views expressed in this report were formed by my review of relevant company data and industry investigation, and accurately reflect my opinion about the investment merits of the securities mentioned in the report. I also certify that my compensation is not related to specific recommendations or views expressed in this report. Research Capital Corporation publishes research and investment recommendations for the use of its clients. Information regarding our categories of recommendations, quarterly summaries of the percentage of our recommendations which fall into each category and our policies regarding the release of our research reports is available at or may be requested by contacting the analyst. Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

Relevant Disclosures Applicable to Companies Under Coverage Relevant disclosures required under IIROC Rule 3400 applicable to companies under coverage discussed in this research report are available on our website at

General Disclosures The opinions, estimates and projections contained in all Research Reports published by Research Capital Corporation ("RCC") are those of RCC as of the date of publication and are subject to change without notice. RCC makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; RCC makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained therein and accepts no liability whatsoever for any loss arising from any use of or reliance on its Research Reports or its contents. Information may be available to RCC that is not contained therein. Research Reports disseminated by RCC are not a solicitation to buy or sell. All securities not available in all jurisdictions.

Potential Conflicts of Interest All Research Capital Corporation ("RCC") Analysts are compensated based in part on the overall revenues of RCC, a portion of which are generated by investment banking activities. RCC may have had, or seek to have, an investment banking relationship with companies mentioned in this report. RCC and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned in our Research Reports as principal or agent. RCC makes every effort possible to avoid conflicts of interest, however readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.

RC USA INC. Information about Research Capital Corporation’s Rating System, the distribution of our research to clients and the percentage of recommendations which are in each of our rating categories is available on our website at The information contained in this report has been drawn from sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in providing it does Research Capital Corporation assume any responsibility or liability. Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part without the express permission of Research Capital Corporation. US Institutional Clients – Research Capital USA Inc., a wholly owned subsidiary of Research Capital Corporation, accepts responsibility for the contents of this report subject to the terms and limitations set out above. US firms or institutions receiving this report should effect transactions in securities discussed in the report through Research Capital USA Inc., a Broker – Dealer registered with the Financial Industry Regulatory Authority (FINRA).

Want to read more about Oil & Gas - Exploration & Production investment ideas?
Get Our Streetwise Reports' Research Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe