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1. Company Snapshot

1.a. Company Description

Paramount Resources Ltd., an independent energy company, explores for, develops, produces, and markets natural gas, crude oil, and natural gas liquids in Canada.The company's principal properties are the Montney and Duvernay developments located in Alberta and British Columbia.It also invests in public and private corporations.


Paramount Resources Ltd.was founded in 1976 and is based in Calgary, Canada.

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1.b. Last Insights on POU

Paramount Resources Ltd.'s recent performance was positively driven by strategic portfolio adjustments and increased cash proceeds. The company closed the sale of 18.5 million common shares of NuVista Energy Ltd., generating $296 million in cash proceeds. Additionally, insiders placed bullish bets worth CA$1.13m, signaling confidence in the company's prospects. A declared cash dividend of $0.05 per common share also contributed to shareholder value. These actions demonstrate the company's efforts to optimize its portfolio and return value to shareholders.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Paramount Resources Ltd. Announces December Dividend

Dec -01

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U.S. oil companies, energy investors 'looking at Canada again' amid flurry of deals

Nov -20

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Paramount Resources' (TSE:POU) Earnings Might Not Be As Promising As They Seem

Nov -12

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Does Paramount Resources Still Offer Growth After Strategic Montney Asset Sales and a 28.6% Drop?

Nov -05

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Ovintiv Makes Second Montney Acquisition in a Year

Nov -05

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Paramount Resources (TSX:POU) 282% Earnings Surge Challenges Bearish Forecasts for Profit Decline

Nov -05

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Paramount Resources: Q3 Earnings Snapshot

Nov -04

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Paramount Resources Increases 2025 Guidance Despite Q3 Loss

Nov -04

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.15%)

6. Segments

Condensate and Oil

Expected Growth: 12%

Paramount Resources Ltd.'s 12% growth in Condensate and Oil is driven by increased production from its Kaybob and Grande Prairie assets, improved well performance, and successful drilling programs. Additionally, the company's focus on cost optimization, efficient operations, and strategic hedging have contributed to the growth.

Natural Gas

Expected Growth: 11%

Paramount Resources Ltd.'s 11% growth in Natural Gas is driven by increased production from its Montney and Duvernay assets, improved well productivity, and strategic acquisitions. Additionally, favorable Canadian gas prices, growing demand, and efficient operations also contribute to this growth.

Commodities Purchased

Expected Growth: 10%

Paramount Resources Ltd.'s 10% growth in commodities purchased is driven by increasing global demand for energy, favorable oil prices, and strategic acquisitions. Additionally, the company's focus on operational efficiency, cost reduction, and exploration of new oil-rich areas have contributed to this growth.

Royalties

Expected Growth: 9%

Paramount Resources Ltd.'s 9% royalty growth is driven by increased oil and natural gas production, improved commodity prices, and strategic acquisitions. Additionally, the company's focus on optimizing operations, reducing costs, and investing in high-growth areas has contributed to its robust growth.

Other Natural Gas Liquids

Expected Growth: 8%

Paramount Resources Ltd.'s Other Natural Gas Liquids segment growth is driven by increasing demand for ethane and propane in petrochemical applications, strategic acquisitions, and optimization of existing assets. Additionally, the company's focus on cost reduction and operational efficiencies has contributed to the 8% growth rate.

Royalty and Other

Expected Growth: 7%

Paramount Resources Ltd.'s 7% growth in Royalty and Other is driven by increased oil and natural gas production, rising commodity prices, and strategic asset acquisitions. Additionally, the company's focus on cost optimization and efficient operations has contributed to the growth. Furthermore, Paramount's diversified revenue streams, including royalties from its investments, have also supported the segment's expansion.

7. Detailed Products

Conventional Oil

Paramount Resources Ltd. is a major producer of conventional oil, extracted from its properties in Alberta and Saskatchewan, Canada.

Natural Gas

The company produces natural gas from its properties in Alberta and British Columbia, Canada.

Natural Gas Liquids (NGLs)

Paramount Resources Ltd. also produces NGLs, including ethane, propane, and butane, as a byproduct of natural gas production.

Oil Sands

The company has interests in oil sands projects in Alberta, Canada, which involve the extraction of bitumen from oil sands deposits.

Midstream Services

Paramount Resources Ltd. offers midstream services, including gathering, processing, and transportation of oil and natural gas.

8. Paramount Resources Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Paramount Resources Ltd. is medium due to the availability of alternative energy sources.

Bargaining Power Of Customers

The bargaining power of customers for Paramount Resources Ltd. is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Paramount Resources Ltd. is medium due to the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for Paramount Resources Ltd. is high due to the relatively low barriers to entry in the energy industry.

Intensity Of Rivalry

The intensity of rivalry for Paramount Resources Ltd. is high due to the competitive nature of the energy industry and the presence of several major players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.83%
Debt Cost 19.85%
Equity Weight 99.17%
Equity Cost 19.85%
WACC 19.85%
Leverage 0.83%

11. Quality Control: Paramount Resources Ltd. passed 6 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
Paramount Resources

A-Score: 6.8/10

Value: 8.2

Growth: 8.0

Quality: 7.6

Yield: 9.0

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

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ARC Resources

A-Score: 6.7/10

Value: 6.1

Growth: 6.0

Quality: 7.5

Yield: 6.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Coterra Energy

A-Score: 6.6/10

Value: 6.9

Growth: 4.4

Quality: 6.9

Yield: 9.0

Momentum: 4.5

Volatility: 7.7

1-Year Total Return ->

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Black Stone Minerals

A-Score: 6.4/10

Value: 5.0

Growth: 3.7

Quality: 9.0

Yield: 10.0

Momentum: 1.5

Volatility: 9.3

1-Year Total Return ->

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Kimbell Royalty Partners

A-Score: 5.4/10

Value: 2.7

Growth: 3.7

Quality: 5.6

Yield: 10.0

Momentum: 2.0

Volatility: 8.7

1-Year Total Return ->

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Enerplus

A-Score: 5.1/10

Value: 6.3

Growth: 7.2

Quality: 7.8

Yield: 1.0

Momentum: 5.0

Volatility: 3.3

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

26.42$

Current Price

26.42$

Potential

-0.00%

Expected Cash-Flows