Scotiabank sees a tough year ahead for North American natural gas firms

Topaz Energy

08/02/2023 14:28

** Scotiabank remains bullish on long-term outlook for
natural gas firms, but sees the sector facing several
challenging months as the North American natural gas supply and
demand balance recalibrates
    ** Says that the sudden collapse of natural gas prices has
shifted the near-term calculus for investing in the sector
    ** Brokerage sees average 2023 NYMEX prices firmly below
$4/mmBtu on warmer temperatures for rest of winter
    ** Sees NYMEX price collapse to put pressure on 2023 capital
budgets and reduce gas focused drilling activity as the year
progresses
    ** Adds that it is now seeking safety and sustainability
from the most defensive names instead of pursuing positive rates
of change and abundant shareholder returns
    ** Sees Canadian firms as more sustainable than the U.S.
firms, with lower break-evens, higher growth and dividend
yields, stronger balance sheets, and better asset level returns
    ** Tourmaline Oil Corp  TOU.TO  and Topaz Energy Corp
 TPZ.TO  stand out as the most attractive natural gas-weighted
names in the sector - Scotiabank
 (Reporting by Arshreet Singh in Bengaluru)
 ((Arshreet.Singh@thomsonreuters.com))