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1. Company Snapshot

1.a. Company Description

Cardinal Energy Ltd.engages in the acquisition, exploration, and production of low decline light, medium, and heavy quality oil, and natural gas in Western Canada.It has operations in the provinces of Alberta and Saskatchewan.


As of February 24, 2022, the company had total proved plus probable oil and gas reserves are 110,391 thousand barrels of oil equivalent.Cardinal Energy Ltd.was incorporated in 2010 and is headquartered in Calgary, Canada.

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1.b. Last Insights on CJ

Cardinal Energy Ltd.'s recent performance was negatively driven by the company's significant debt issuance, including a $45 million bought deal offering of senior subordinated unsecured debentures in March 2025 and a $60 million bought deal offering in January 2025. These debt issuances may indicate the company's financial struggles and increasing financial leverage, which could negatively impact its credit rating and future funding options. Additionally, the company's Q1 performance and guidance were not publicly disclosed, limiting the analysis of its recent business condition.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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RBC Names Suncor Energy, Canadian Natural Resources as Top Picks in Integrated Oil, Exploration and Production Cos

Nov -24

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A Fresh Look at Cardinal Energy (TSX:CJ) Valuation After Strong Reford Output and Dividend Update

Nov -13

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Are Cardinal Energy's (TSX:CJ) Margins Under Pressure or Just Recalibrating Their Profit Story?

Nov -12

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Cardinal Energy Ltd. Announces Monthly Dividend for November, Production Update at Reford

Nov -10

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Cardinal Energy Ltd. Announces Third Quarter 2025 Operating and Financial Results

Nov -06

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Cardinal Energy (TSE:CJ) Has Announced A Dividend Of CA$0.06

Oct -28

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Cardinal Energy Ltd. Hosts Reford SAGD Project Ribbon Cutting Ceremony with Saskatchewan Premier Scott Moe

Oct -06

Source: newsfilecorp.com

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Cardinal Energy Ltd. (TSE:CJ) Stock Is Going Strong But Fundamentals Look Uncertain: What Lies Ahead ?

Oct -02

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.86%)

6. Segments

Crude Oil

Expected Growth: 2%

Cardinal Energy Ltd.'s 2% growth in Crude Oil is driven by increased production from its light oil assets in Alberta, improved operational efficiencies, and a favorable pricing environment. Additionally, the company's focus on cost reduction and capital discipline has enabled it to maintain a strong balance sheet, supporting its growth initiatives.

Royalties

Expected Growth: 1%

Cardinal Energy Ltd.'s royalty growth is driven by increased oil production, higher crude oil prices, and strategic acquisitions. The company's focus on optimizing its asset base, improving operational efficiency, and expanding its drilling program also contribute to its growth. Additionally, Cardinal's strong balance sheet and disciplined capital allocation enable it to capitalize on opportunities and drive long-term value creation.

Natural Gas

Expected Growth: 3%

Cardinal Energy Ltd.'s 3% growth in natural gas is driven by increased production from its low-cost, high-margin assets in Alberta and Saskatchewan, combined with improved operational efficiencies and a favorable commodity price environment. Additionally, the company's strategic acquisitions and focus on cost reduction initiatives have contributed to its growth momentum.

Natural Gas Liquids

Expected Growth: 2%

Cardinal Energy Ltd.'s Natural Gas Liquids (NGLs) segment growth is driven by increasing demand for petrochemical feedstocks, growing global energy demand, and strategic acquisitions. Additionally, the company's focus on operational efficiency, cost reduction, and exploration of new markets also contribute to its growth.

Processing and Other

Expected Growth: 1%

Cardinal Energy Ltd.'s Processing and Other segment growth is driven by increased oil processing volumes, higher realized prices, and improved operating efficiencies. Additionally, strategic acquisitions and investments in infrastructure expansion have contributed to the growth. Furthermore, the company's focus on cost optimization and margin enhancement initiatives has also supported the segment's growth.

7. Detailed Products

Crude Oil

Cardinal Energy Ltd. produces high-quality crude oil from its oil wells, suitable for refining into various petroleum products.

Natural Gas

Cardinal Energy Ltd. extracts natural gas from its wells, providing a clean-burning fuel for power generation and industrial applications.

Natural Gas Liquids (NGLs)

Cardinal Energy Ltd. produces NGLs, a group of hydrocarbons that include ethane, propane, and butane, used as feedstocks for petrochemicals and fuels.

Oilfield Services

Cardinal Energy Ltd. offers a range of oilfield services, including drilling, completion, and production optimization, to support its operations and those of third-party clients.

Midstream Services

Cardinal Energy Ltd. provides midstream services, including gathering, processing, and transportation of crude oil and natural gas.

8. Cardinal Energy Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Cardinal Energy Ltd. is medium, as there are some alternative energy sources available, but they are not yet widely adopted.

Bargaining Power Of Customers

The bargaining power of customers for Cardinal Energy Ltd. is low, as the company operates in a niche market with limited competition.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Cardinal Energy Ltd. is medium, as the company relies on a few key suppliers for its operations.

Threat Of New Entrants

The threat of new entrants for Cardinal Energy Ltd. is high, as the energy industry is attractive to new companies and entrepreneurs.

Intensity Of Rivalry

The intensity of rivalry for Cardinal Energy Ltd. is medium, as the company operates in a competitive market, but has a strong market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.79%
Debt Cost 17.21%
Equity Weight 95.21%
Equity Cost 18.74%
WACC 18.67%
Leverage 5.03%

11. Quality Control: Cardinal Energy Ltd. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Headwater Exploration

A-Score: 7.6/10

Value: 5.9

Growth: 9.7

Quality: 8.2

Yield: 9.0

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

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Parex Resources

A-Score: 7.6/10

Value: 8.6

Growth: 6.2

Quality: 7.0

Yield: 10.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Cardinal Energy

A-Score: 7.1/10

Value: 6.8

Growth: 4.2

Quality: 6.9

Yield: 10.0

Momentum: 6.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Freehold Royalties

A-Score: 6.9/10

Value: 5.1

Growth: 5.4

Quality: 7.2

Yield: 9.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
MorningStar Partners

A-Score: 6.4/10

Value: 6.4

Growth: 6.6

Quality: 4.8

Yield: 10.0

Momentum: 5.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
VAALCO Energy

A-Score: 5.7/10

Value: 8.1

Growth: 6.7

Quality: 5.9

Yield: 8.0

Momentum: 1.0

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.08$

Current Price

9.08$

Potential

-0.00%

Expected Cash-Flows