Rubellite Energy (RBY.TO and RUBLF) Valuation Update - Apr 14

[dan_s]

Rubellite Energy is one of the companies in our Small-Cap Growth Portfolio that will get a significant revenue boost from rising oil prices.

Rubellite produces heavy oil which is needed to produce diesel and jet fuel. You may have noticed that diesel prices at the pump are much higher than gasoline prices. That's because in the U.S. we have plenty of light oil, which is perfect for making gasoline. Refiners need heavy or "black oil" to make diesel and jet fuel. The U.S. economy runs on diesel.

RBY.TO is trading at $3.15Cdn today, which is up 31% YTD.

My updated valuation is $6.57Cdn, which translates to $4.80US for RUBLF.

Rubellite is a classic "Growth Company". Since I started covering the company its production has increased from 3,302 Boepd in 2023 to 13,042 Boepd in Q4 2025. The current production mix is approximately 63% heavy oil that sold for $65.58Cdn/bbl in Q4 2025, 4% NGLs (primarily condensate) that sold for $51.93Cdn/bbl in Q4, and 33% natural gas that sold for just $2.91Cdn/mcf in Q4 2025.

Rubellite's liquids will be selling for much higher prices in 2026. Based on my updated forecast, Rubellite should generate close to $153Cdn million of operating cash flow this year ($1.63Cdn per share). I rate RBY.TO a Strong Buy because there is nothing I see that justifies the stock trading for less than 2X operating CFPS. It has lots of high-quality "Running Room" in Western Canada, which IMO justifies at least a 4X valuation multiple.

Watch my interview with the CEO of Rubellite here: https://www.youtube.com/watch?v=eBogX0D-anw