Summary
- Small-cap oil and gas equities are trading at a discount compared to large-cap peers.
- Share price underperformance and rapid fundamental improvement have rendered valuations more compelling.
- The prolonged bear market of 2014–2020 cleared the field of the worst-positioned small caps, leaving better management teams, capital structures, and assets in the public market.
- PTSD from this bear market may explain the valuation discount, creating an opportunity.
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