CALGARY – As share prices in Canadian natural gas producers trade at depressed valuations, Tourmaline Oil Corp. is spinning out its royalty business that analysts say will capture more value for the parent company.
“You never know what the market is going to do,” Rose said, adding that he was pleased with the reaction to the news but looking over the longer term. The Topaz spinoff, however, is unique in Canada in combining the royalty and the infrastructure business in a spinoff, Rose said. GMP FirstEnergy analyst Robert Fitzmartyn said that Canadian oil and gas companies are currently trading at three to four times their debt-adjusted cash flow.
“I think most boards will prefer to see a little bit longer term. Where is this in six months? How will Topaz look when it goes public?” Fitzmartyn said. “I think though that you’ve got to acknowledge it and weigh the merits of . You’re not doing your fiduciary duty if you don’t.”