Kiwetinohk Energy Corp. (TSX: KEC) is an energy transition company, having its business model around the production and developments of natural gas in the Western and Central region of Alberta. The company is into the procurement and transportation of natural gas, development of other renewable power projects including the solar, natural gas-fired combined cycle. The company recently got listed on TSX, and is based in Calgary, a province in Canada.

Key Highlights

• Long-term Vision: Recently the company stated its vision for the next ten years. It thrives to become a leader in Alberta’s energy transition segment by generating more than 1,500 MW of electricity which is greater than 10% of the current capacity of Alberta, through renewable resources. Further, it aims to consolidate and develop more than 300 MMcf/d of natural gas production and expand in the emerging hydrogen business.

• Increase in revenue, net of royalties: For the Q3FY21, the company reported a steep rise in its revenue, net of royalties to CAD 96.26 million as compared to the CAD 2.13 million in pcp. The revenues were primarily driven from its core operating activities.

   Source: Company Reports

• Increase in credit facility: To further cultivate its operations, the company got an enhanced Credit Facility with the consortium of banks of CAD 225 million on September 22, 2021, under the Senior Extendible Revolving Facility. The total borrowing capacity as of September 30, 2021, for the company is stated at CAD 170 million.
  

• Increase in Adjusted fund flows from operations: For the Q3FY21 the company reported an increase in its adjusted fund flow from operation to CAD 28.2 million as compared to the outflows of CAD 0.5 million in pcp. This increase was primarily attributable to its Simonette acquisition which was a catalyst because of its low operating costs and providing rich gas premium across its sales contract.
  

Stock recommendation

The stock was made available to trade across the exchange on January 14, 2022, opened at CAD 14, and lost the grounds coming to CAD 12.10 as of now. Because of the limited trading history in the secondary market, there is not much to analyze on the technical aspect of its price action. The business model is what makes the company unique in terms of aspiring to become a leader in electricity production through renewable resources. Considering the above-stated key points, we recommend a “Watch” rating on the stock at the closing price of CAD 12.10, as on February 15, 2022.

1-Year Price Chart (as on February 15, 2022). Source: REFINITIV, Analysis by Kalkine Group

*The reference data in this report has been partly sourced from REFINITIV.

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