12:26 PM EDT, 07/02/2024 (MT Newswires) -- Tudor, Pickering, Holt on Tuesday reiterated a buy rating on the shares of Topaz Energy ( TPZEF ) with a C$26.00 price target after the Western Canadian oil and gas royalty and infrastructure company acquired a 50% interest in a Whitecap Resources (WCP.TO) natural-gas processing plant.

TPZ CN announced this morning the acquisition of a 50% non-operated working interest in WCP CN's new natural gas and condensate gathering facility in the Alberta Montney (43mmcf/d of gas compression and 12.5mbopd of condensate stabilization), which is supported by fixed, take-or-pay revenue for a 10-year term, followed by 7 years of preferential capacity dedication. Expected annualized revenue in 2024 is quoted at C$13-14MM, with no maintenance or operating costs flowing through to TPZ CN (100% operating margin per release). With the deal already closed on June 24th, the company was already able to increase 2024 guidance for revenue to C$75.5-78.0MM (+C$6.5-7.0MM), with YE'24 ND/EBITDA now expected at 1.1x (prior 0.8x); more fulsome guidance update to come with Q2 results after hours on July 29th. Total cash considerations were C$100MM, to be funded through TPZ CN's credit facility," analyst Jeoffrey Lambujon noted.

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