CA - PrairieSky Royalty: Well-Managed But I Remain On The Sidelines

2024-04-23 10:30:00 ET

Summary

• PrairieSky Royalty's Q1 2024 results show an increase in oil and gas production and a higher average realized oil price.
• The low natural gas price negatively impacts revenue breakdown, with oil still being the main contributor to the total revenue (and cash flow).
• PrairieSky's cash flows are stronger than net income, and the current dividend is fully covered by incoming cash flows.

Introduction

I like oil (and gas) royalty companies to gain exposure to the fluctuating oil and gas prices. At the end of last year, I discussed PrairieSky Royalty ( PSK:CA ) ( PREKF ), but I decided I liked other oil royalty companies better and rated the stock a ‘hold’ . As the company has now published two quarterly updates since the previous article, and as the oil price has shown a nice move up, I wanted to have another look at the company to see if my investment thesis needs to be fine-tuned....

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