Oil & gas stocks have been hit hard since mid-2014 as oil prices have seen a sharp pullback. Oil prices tumbled in late 2014 after the Organization of Petroleum Countries (OPEC) announced that it is maintaining production levels despite a supply glut. OPEC’s most important member, Saudi Arabia, believes that it is high-cost producers in North America that should cut production.
Lower oil prices have hurt high-cost producers in Canada and the U.S. However, oil prices seem to be finally bottoming out. Indeed, major producers, including Saudi Arabia, have hinted at freezing production. While this may not push prices higher, it will certainly provide a floor. This is good news for oil & gas companies such as Bonterra Energy Corp. (TSX: BNE).
Based in Calgary, Bonterra is engaged in the exploration, acquisition, development and production of oil and natural gas reserves in the provinces of Alberta, British Columbia and Saskatchewan. Over the last one year, BNE shares have fallen more than 42%. But with oil prices bottoming, BNE shares could see a sharp recovery. In fact, in the last three months, the stock has gained more than 13%.
Bonetrra, though, not only offers capital appreciation but also a very attractive yield. BNE currently has a yield of 6.14%.
