Sintana Energy Inc., a crude oil and natural gas exploration company, engages in the acquisition, exploration, development, production, and sale of crude oil and natural gas resources in Colombia. Its principal assets are private participation interests of 30% unconventional and 100% conventional in the hydrocarbon resources of Valle Medio Magdalena 37 Block, which covers 43,158 gross acres located in the Middle Magdalena Basin. The company was incorporated in 1994 and is headquartered in Dallas, Texas.

Sintana Energy Inc.

Energy

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

SEI.V reported revenue of CAD 0mn in the last 12 months, down 0% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 105% from FY23 to CAD -0.03. Market expects EPS to reach CAD -0.03 in FY25.

The stock has been falling steadily in the past six months, losing 51% in total. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 40ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

Another important profitability metric, return on assets (RoA), amounted to -50.1% in the last 12 months, a decrease from -24.3% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -56.0%, below the peers. 

Sintana Energy Inc. reported a return on equity (RoE) of -57.3% in the last 12 months, down from -31.3% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -7.9 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

SEI.V has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is relatively stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, and poor cash flow generation. We note adequate interest coverage and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, SEI.V is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, SEI.V is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Considering past and projected metrics, the stock is distinctly 'expensive' compared to its peers. 

Sintana Energy Inc.

CA$ 0.5

1

Sintana Energy Inc.

CA$ 0.5

1

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Risk / Profitability

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CA$ 0.5

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