Q: Please comment on their new acquisition. Does that make this company more attractive in the long run. The stock has doubled since then. Thanks
5i Research Answer:
It is a very big deal for TNZ, but adds scale, market cap, production, growth potential and cash flow. Offshore drilling can be risky, but existing production is generally safer and provides consistent stable cash flow. The deal more than doubles the size of the company so it makes sense that the stock reacted. EPS growth is expected to surge in 2025. We would still very much put it into the small cap, higher-risk category, but the acquisition looks solid to us and should improve its long term valuation, assuming all goes as expected.