Canadian royalty and energy infrastructure company Topaz Energy Corp. (TSE:TPZ) has won investors’ attention by signing an all-cash deal worth around C$265.3 million with Deltastream Energy Corporation. With the latest deal, TPZ aims at boosting its existing Clearwater royalty acreage by 26%. To increase its appeal to investors, the company has also raised its quarterly dividends by 7%.
Sparking investors’ interest in the stock, Topaz Energy’s announcement led to a 6.3% rise in its shares on September 12.
Under the agreement, TPZ will buy a 5% gross overriding royalty on Deltastream’s current and future oil production from its Clearwater acreage in Alberta (the Royalty Lands). Subject to customary closing conditions, the transaction is expected to close by September end. Furthermore, Topaz is financing the deal with its existing credit facility.
According to the company, its Clearwater royalty production will surpass 2,000 boe/d immediately after concluding the acquisition deal. Further, Topaz expects to hold royalty interests across roughly 700,000 gross acres in the greater Clearwater area.
Is Topaz Energy a Buy?
Topaz Energy stock seems like a great pick. Turning to Wall Street, analysts are optimistic about TPZ stock as it has a Strong Buy rating, based on six Buys.
Further, financial bloggers and retail investors seem bullish about TPZ stock. Financial bloggers’ opinions are 100% Bullish on TPZ stock, above the sector average of 72%. Retail investors have also increased their holdings in TPZ stock by 3.8% in the last 30 days.
Final Thoughts
Topaz Energy has already experienced a bull run on the bourses as its shares are up 20.5% so far in 2022. Enhancing its appeal to investors, the company has also raised its quarterly dividend by 7% to C$1.20 per share. Further, TPZ stock’s average price of C$29.71 signals a 38.4% upside potential from current levels.
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