Canadian Superior Energy (SNG) Update by Jonathan M. Heller, CFA
Last Month at the 3rd Annual Value Investing Congress West in Pasadena, Atticus Lowe and Lance Helfert from West Coast Asset Management presented a compelling case for relatively underfollowed natural gas company Canadian Superior Energy. They suggested that the company’s recent discovery of an offshore gas field near Trinidad was the potential catalyst to drive SNG shares much higher.
Since their presentation, Canadian Superior shares are up nearly 35% to $4.22 (June 6, 2008). On May 20th, the company announced a collaborative effort with Global LNG Inc on the Liberty Natural Gas Transmission Project, a $550 million effort to transport liquid natural gas from the Trinidad fields through a deepwater pipeline that will end 15 miles off the New Jersey coast. Canadian Superior expects this project to deliver up to 2.4 billion cubic feet of natural gas by 2011.
Canadian Superior Energy also recently reported first quarter earnings. Revenues from petroleum and natural gas sales were up 27% from the same quarter last year; earnings were ($.01) per share vs. breakeven last year.
With the price of natural gas up nearly 50% so far in 2008, to $12.47 per million BTU’s (July Futures price), and great prospects in Trinidad, this is a company to watch. However, as Lowe and Helfert pointed out, SNG’s success is not dependent on soaring natural gas prices. With a market cap just north of $625 million, the company is currently covered by just one analyst according to Bloomberg. More positive news from the Trinidad fields will likely change that.
Jonathan M. Heller, CFA
*The author has a position in Canadian Superior Energy