Saturday, July 13, 2024

Enterprise group(E.TSX) at 52 weeks ahead of earnings with more to come

Date:

Enterprise Group, Inc. (TSX: E)

(the “Company” or “Enterprise”)Enterprise, a consolidator of energy services (including specialized equipment rental to the energy/resource sector), emphasizes technologies that mitigate, reduce, or eliminate CO2 and Greenhouse Gas emissions for small to Tier One resource clients.

 It’s been evident for months that a global energy crisis was coming. Then recently,  just when we thought things couldn’t get any worse, the chief executive of Shell predicted that Europe is headed for a multi-winter energy crisis, with consequences that cascade worldwide. (Troy Media)

Here’s a recent video between Enterprise’s Des O’Kell and business reporter Stu McNish. Other assets include:

Corporate Presentation

Full FRC Report

FRC Video

Note: Enterprise’s Q3 numbers are due 11/10-11/2022. Make a note. I expect good things. (I don’t have any direct insights).

Evolution Power Projects (EPP), Enterprise’s newest subsidiary.

US President Joe Biden gave an impassioned speech recently on topics that everyone knew but refused to acknowledge; that green energy is a goal, but for the foreseeable future, fossil fuels’ production needs to be drastically increased. Pretty sure I don’t need any bullet points. He did also state: Today, I’m announcing a plan to refill the Strato- — the Strategic Petroleum Res- — Oil Reserve in the years ahead at a profit for taxpayers. The United States government will purchase oil to refill the Strategic Petroleum Reserve when prices fall to $70 a barrel. And that means oil companies can invest in ramping up production now, with confidence they’ll be able to sell their oil to us at that price in the future: $70. (Hays Post)

Fossil fuels have always had this reputation of being dirty and just plain wrong. Initiatives like EPP assuage that mostly misguided thinking. All major energy companies have either a direction or initiatives to lower GHG and mitigate climate change.

Enterprise’s EPP is a great example. The impact has been so positive that all of EPP’s equipment is spoken for in the field, and new equipment—mainly natural gas generators are being ordered and arriving on clients’ sites. 

In a discussion with Evolution’s CEO Heather Johnson, some intriguing facts were unearthed:

  • Q3/2023 is the best quarter so far
  • Several new clients are on board
  • Client mood upbeat
  • Equipment spoke for; new Nat Gas Generators arriving to meet demand. 

EPP clients have seen a marked reduction in Scope 1 and 2 emissions. Scope 1 emissions are direct greenhouse (GHG) emissions from sources controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, and vehicles). Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Although scope two emissions physically occur at the facility where they are generated, they are accounted for in an organization’s GHG inventory because they result from the organization’s energy use. (EPA.gov)

EPP CEO Johnson states, “We deliver value to our customers through emission reduction technology and support their ESG initiatives. Natural gas electrification is the future of energy evolution. Cleaner, quieter, safer and most importantly – Measurable”. She continues, “The transition from diesel to natural gas isn’t an alternative—it’s an advancement. Our fleet is powerful, streamlined and can accommodate up to 2.4 MegaWatt projects. Our generators use compression and turbine technology with sequencing capabilities allowing us to add on as projects scale up or down. Packages are portable and fuel tolerant, relevant not only in oil and gas production but across the industry.”

Bottom Line. It Might Surprise You.

Enterprise and EPP are underrepresented in the cutting of GHG debate. For years, suppliers and resource companies have been actively reducing carbon and developing tech that reduces emissions. Going ‘Green’ is still going to take decades, and fossil fuels are still n need and must grow. As Jamie Dimon, CEO of JPMorgan Chase, stated. According to the Paris Agreement, the bank has pledged to achieve net-zero emissions throughout key sectors of its financing portfolio by 2050.” Dimon continues,  “Why can’t we get it through our thick skulls that if you want to solve climate [change], it is not against climate [change] for America to boost more oil and gas?” 

This March, Dimon urged the Biden administration to develop a modern-day “Marshall Plan” to boost energy production within the US and decrease dependence on foreign oil imports against Russia’s invasion of Ukraine. According to Axios, he also pushed for investments in green tech like hydrogen power and carbon capture.

Read the original article on Business Insider.

Energy reality dictates several things. First, we will still need fossil fuels for quite a while as Green Tech develops. Second, resource companies and suppliers such as Enterprise Group will need to continue, with its peers, to create the most benign production methods.

Companies like Enterprise have worked to develop these techs and will continue to do so. The fact that its services are sought out by existing clients, both local and global tier ones, should put it on investors’ radars.

Transition takes time. The development and provenance of that sea change will require a sustained increase in fossil fuel production as Green Tech follows a parallel path. 

Bob Beaty
+ posts

For over 30 years, Bob Beaty has been explaining concepts and companies to the global investment community. One of the original writers for Jim Cramer’s Thestreet.com, he also wrote for AOL (Can/US), the Globe and Mail, and the Huffington Post. Over that period, he illuminated small-cap companies to investors with wit and pith but mostly opinion and facts. Investing should be fun. Pedantic, staid content is no fun.

Before embarking on his writing career, Bob had a successful international journey in the finance industry. He served as a broker, derivatives product manager, and a Director of London's Credit Suisse subsidiary. His career spanned across major financial hubs including Toronto, Vancouver, and the UK, giving him a unique global perspective. (He is still fondly remembering those English client lunches.)

Other than everything Groucho Marx and George Carlin ever said, Bob lives by a simple credo;

‘Never do anything the person standing in front of you can't understand.’ Hunter S. Thompson.

Let’s go.

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