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Strategic Oil & Gas Ltd Net Income surged on 130% in 2016 while Revenue dropped on 44.8%

24.03.2017 • About Strategic Oil & Gas Ltd ($SOG) • By InTwits

Strategic Oil & Gas Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is declining: in FY2016 vs. -208.0% in FY2015 vs. 39.1% in FY2012
  • Strategic Oil & Gas Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -12.4% for the sames years0
  • It operates with high leverage: Net Debt/EBITDA is 12.4x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Strategic Oil & Gas Ltd ($SOG) key annual financial indicators

mln. CAD201220132014201520162016/2015
Gross Profit12.7872.191-15.81517.972-100.0%
Net Income-4.788-22.316-129.490-110.11533.242
Balance Sheet
Short Term Debt34.12563.77529.01652.560-100.0%
Long Term Debt0.0000.0000.0000.000
Cash flow
Revenue growth151.4%24.8%-0.3%-35.7%-44.8%
EBITDA growth-730.5%-2.1%-21.3%-651.8%
Gross Margin27.1%3.7%-26.9%47.6%-47.6%
EBITDA Margin39.1%30.7%24.2%-208.0%0.0%208.0%
Net Income Margin-10.1%-37.9%-220.6%-291.8%159.7%451.6%
SG&A, % of revenue17.6%-17.6%
CAPEX, % of revenue132.6%202.3%172.6%31.1%-31.1%
Net Debt/EBITDA1.7x3.5x2.0x0.0x

Strategic Oil & Gas Ltd ($SOG) key quoterly financial indicators

mln. CADFY16Q1FY16Q2FY16Q3FY16Q4YoY change
Net Income-7-6-652
Balance Sheet
Short Term Debt0000-100.0%-100.0%-100.0%-100.0%
Long Term Debt79808484
Gross Margin1.8%32.2%26.7%49.2%32.2%-19.3%-16.5%-4.2%
EBITDA Margin -41.1% 5.3% -1.3% 813.0%-58.2%-29.5%778.9%1,154.0%
Net Income Margin -177.4% -110.2% -131.7% 781.0%-98.7%-60.7%718.3%1,202.0%

Revenue and profitability

The company's Revenue dropped on 44.8%. Annual revenue decline showed slowdown in FY16Q4 - revenue dropped on 11.3%.

Net Income marign surged on 452 pp from -292% to 160% in FY2016.

Appendix 1: Peers in Energy

Below you can find Strategic Oil & Gas Ltd benchmarking vs. other companies in Energy industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Oryx Petroleum Corp Ltd ($OXC)-18.4%141.2%
Seven Generations Energy Ltd ($VII)115.7%340.2%39.0%94.4%
Athabasca Oil Corp ($ATH)342.7%5.5%-22.9%73.1%
Painted Pony Petroleum Ltd ($PPY)41.3%56.0%-42.5%60.7%
ONEnergy Inc ($OEG)6,002.6%231.5%57.4%
Median (116 companies)15.4%17.0%-27.7%-18.0%
Strategic Oil & Gas Ltd ($SOG)24.8%-0.3%-35.7%-44.8%

Top companies by Gross margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Americas Petrogas Inc ($BOE)77.1%43.3%-34.3%121.1%
TransAlta Renewables Inc ($RNW)94.4%94.5%94.5%91.1%
Serinus Energy Inc ($SEN)80.5%76.5%86.8%88.5%
Advantage Oil & Gas Ltd ($AAV)62.0%84.5%92.5%88.5%90.3%
Polaris Infrastructure Inc ($PIF)39.9%33.6%32.0%86.7%88.6%
Median (114 companies)32.0%32.2%32.4%33.6%32.0%
Strategic Oil & Gas Ltd ($SOG)27.1%3.7%-26.9%47.6%

Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Granite Oil Corp ($GXO)59.4%64.5%70.8%201.9%
Perpetual Energy Inc ($PMT)35.5%70.7%58.0%110.3%
Petro Rio SA ($PRJ)-4,809.7%-6,899.7%28.2%90.7%
Peyto Exploration & Development Corp ($PEY)86.1%83.2%86.3%84.6%80.7%
Innergex Renewable Energy Inc ($INE)111.8%110.0%82.9%83.4%83.5%
Median (128 companies)25.3%35.7%28.9%9.0%28.2%
Strategic Oil & Gas Ltd ($SOG)39.1%30.7%24.2%-208.0%

Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Oryx Petroleum Corp Ltd ($OXC)1,997.8%712.8%
WesternZagros Resources Ltd ($WZR)385.6%
Athabasca Oil Corp ($ATH)2,426.4%596.6%504.7%315.2%83.7%
TORC Oil & Gas Ltd ($TOG)453.8%466.9%104.5%229.4%76.3%
Seven Generations Energy Ltd ($VII)452.8%513.1%227.4%191.2%73.5%
Median (129 companies)42.3%39.0%45.0%27.6%23.0%
Strategic Oil & Gas Ltd ($SOG)132.6%202.3%172.6%31.1%

Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Enerplus Corp ($ERF)-17.3%10.2%11.5%-55.5%16.3%
Whitecap Resources Inc ($WCP)7.1%8.1%9.6%-10.6%10.1%
Ecopetrol SA ($ECP)29.3%24.4%16.5%3.0%9.6%
Parkland Fuel Corp ($PKI)22.3%23.3%9.9%7.8%8.6%
Inter Pipeline Ltd ($IPL)9.5%8.0%7.5%9.6%8.5%
Median (128 companies)3.9%5.8%5.7%-8.2%-1.9%
Strategic Oil & Gas Ltd ($SOG)-2.4%-6.3%-15.6%-89.5%

Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
BlackPearl Resources Inc ($PXX)-0.2x-0.1x0.2x3,726.1x-0.2x
Paramount Resources Ltd ($POU)14.6x23.9x8.9x421.5x-5.8x
Precision Drilling Corp ($PD)2.2x1.9x2.0x68.4x7.6x
Trican Well Service Ltd ($TCW)2.5x3.4x2.9x31.4x
Trilogy Energy Corp ($TET)2.6x1.8x2.3x25.5x7.3x
Median (79 companies)1.5x1.4x1.4x2.6x2.7x