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Sunday, June 16, 2024

Enterprise Outperforms in the Oil and Gas markets (TSX: E, OTC: ETOLF)

Enterprise Groupe (TSX: E, OTC: ETOLF), a company specializing in equipment and services in the build-out of infrastructure for energy pipeline and construction industries, has shared solid positive earnings. These outstanding results will boost investors’ confidence, and upcoming investments in the oil and gas sector should help the company grab more market share. E.TO gained 40% YoY, a significant gain compared to S&P (-19.4%), Nasdaq (8.7%), and Dow (-9).

Oil & Gas Sector Overview

The oil and natural gas sector is active in 12 of Canada’s 13 provinces and territories. Canada is sixth in the production of natural gas and fourth in the production of crude oil worldwide.
The GDP of Canada receives billions of dollars from its oil and natural gas production, which also generates thousands of employment annually. 

Large amounts of these resources are found in Alberta, Canada’s top oil and natural gas producer. Around 80% of Canada’s total oil production comes from Alberta and natural gas can be found all over the province. However the oil sands are only in the northern part of the province. Predictions say the oil and gas industry will be worth $40 billion CDN on March 1, 2023, an increase of 11% from 2022. According to a Bank of Montreal estimate, Alberta will receive $28 billion in investments this year, or almost 70% of all investments made in Canada. According to CAPP (largest investor in environmental protection), the conventional and oil sands industries are the key drivers of investment growth.

“The year 2023 may be one of the most pivotal moments in time for Canada’s oil and natural gas industry. With an emerging liquefied natural gas export industry, the expected completion of the Trans Mountain pipeline expansion, and billions of dollars in emissions reduction investments waiting to be unlocked, Canada is positioned to play a much larger role in providing responsibly produced energy resources to the world.”

Company Overview

Enterprise Groupe (TSX: E, OTC: ETOLF), Inc. combines services, such as the renting of specialist equipment to the energy and resource industries. For both itself and its clients, the company strongly emphasizes systems and technologies that mitigate, decrease, or eliminate CO2 and greenhouse gas emissions. Local Tier One and multinational resource corporations in Western Canada are familiar with the company.

Evolution Power Projects, a brand-new, wholly owned company, was formally introduced by Enterprise Group in April 2022. EPP is the top supplier of surface infrastructure and low emission mobile power systems to the industrial, resource, and energy sectors. The company’s cutting-edge techniques provide low-emission natural gas-powered systems and micro-grid technologies to its clients, enabling them to do away with diesel completely. Further natural gas-powered systems, such as turbine generators, accounted for a sizeable amount of the Enterprise’s capital expenditures for 2022.

The company also emphasizes sustainability. Enterprise is continually developing quantitative measures and techniques to track and improve the company’s performance in relation to ESG aspects, by making new technology investments that enable us to be a top provider of tools and services that significantly lower the emissions of Enterprise’s clients and assist them in achieving their ESG goals.

Share Structure / Financials 

As we stated in our introduction, Enterprise Group reported positive earnings and solid results, marking one of the strongest years in the company’s history. Revenues rose by $8,159,914 or 44% to $26,892,249 for the fiscal year that concluded on December 31, 2022, from $18,732,335 the year before. Adjusted gross margin increased by $5,897,197 or 118% to $10,879,928 for the fiscal year that finished on December 31, 2022, from $4,982,731 in the year before. In comparison to the preceding year’s adjusted EBITDA of $2,959,020, which was $8,147,223, this year’s adjusted EBITDA was $8,147,223, an increase of $5,188,203 or 175%.

During 2022, the company purchased and canceled 1.8M shares representing $714.6k. These shares were withdrawn from the share capital account because they had a carrying value of $2,445,077, or $1.36 per share. The company has bought back and canceled 10,057,500 shares since the program’s launch at a total cost of $2,391,560, or $0.24 per share. A total of $14,289,151 worth of these shares, with a carrying value of $1.42 per share, have been taken out of the share capital account over the share repurchase program. In addition to the share repurchase program, management exercised 4,881,000 options for the year ending December 31, 2022, generating net proceeds of $901,070 that were returned to the company, giving management a 40% ownership holding. Through August 29, 2023, Enterprise has extended its regular course issuer bid.

Bottom Line

Enterprise Groupe (TSX: E, OTC: ETOLF) continues to grow while being well-structured. The share price remains strongly undervalued as the company’s book value is $0.68 per share. Remember, the company had positive earnings, and the trend should continue as Enterprise launched Evolution Power Projects, which is the leading provider of low emission, mobile power systems and associated surface infrastructure to the energy, resource, and industrial sectors. 

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