Orca Energy Group Inc. (ORXGF:OTCMKTS;ORC.B:TSXV) announced financial and operational data from the first quarter of this year, which met projected expectations, reported Research Capital Corp. analyst Bill Newman in a May 17 research note.
During the quarter, there was an average net natural gas sales production of 94.8 MMcf/d, which resembled the fourth quarter of last year's average of 95.5 MMcf/d. The company upheld its 2023 average production forecast of 90 to 100 MMcf/d.
Orca reported cash and cash equivalents of US99.5 million and US$68.4 million in working capital as of the end of March 2023.
Newman reported that "working capital less long-term debt was US$28.5mm versus US$21.8mm on December 31, 2022. Cash flow (before changes in non-cash working capital) was US$16.7 million (US$0.84/fd share), which was in line with our forecast of US$17.7mm ($0.89/fd share)."
Production Capacity Increased
This reported quarter, Orca finished its workover program and inlet compression project at Songo Songo Field. The total production capacity at Songo Songo was raised to between 150 MMcf/d and 155 MMcf/d. April's gross production from the field averaged 119.8 MMcf/d or 86.9 MMcf/d net to Orca.
In light of these results, Newman noted, "Orca remains in a strong financial position and continues to generate free cash flow that supports its current quarter dividend of CA$0.10 per share (annualized yield of 8.1%) and NCIB, as well as, fully funding its capital expenditures."
With this, Newman reinstated his speculative Buy rating on the company.
Structure and Predictions
In his report, Bill Newman preserved his target price on Orca Energy of CA$7.50.
Newmans's research also shared current market data on the company:
- Price: CA$4.94, with a 52-week range between CA$3.92 and CA$5.62.
- Price Target: CA$7.50
- Market Cap: CA$98 million
Newman expects a projected return of 51.8% and notes that Orca has an enterprise value of CA$59 million.
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Disclosures for Research Capital Corp., Orca Energy Group Inc., May 17, 2023
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