Bellatrix Exploration Ltd. (BXE.TO)

A natural gas producer at 75% of its production. $15.93 is the book value. A potential 10 bagger in the next cycle. (Analysts’ target: $2.23).

Their debt to cash flow it is well above anything he would consider reasonable. Balance sheet is number one. 75% gas.

75% Nat Gas. Spirit river play. Their book value is $15.93. It has already had a bounce since tax loss selling ended. (Analysts’ target: $2.75).

(Market Call Minute.) The debt is too high and people have strong issues with management execution, and he would totally avoid this.

Natural gas has been a tough space lately. There are no names that have really blown the doors off. This stock had a big drop and has been sort of basing for quite a long time. The beta on this is much higher than the market or the sector. One of the bigger names that pays a dividend might be a better choice.

They are 75% natural gas. Production should be flat next year and they will use excess cash to pay down debt. It is cheap here. (Analysts’ target: $3.00).

One of many natural gas producers that’s been beaten up really badly. High quality assets, with an opportunity to de-lever based on many things. Gas assets in the Deep Basin are quite solid. Produces quite a bit of propane, not a bad gas liquid to be producing at the moment. It appears there is too much debt on the company, so he walked away some time ago.

He would suggest looking at the goodwill on the balance sheet. If they have to write it down a long way, that would really hurt the BV. They have a tremendous amount of debt, so they are not out of the woods. Has huge upside potential. Oil and gas has come back in favour to some degree. Worth a look, but expects there will be more tax loss selling and it could go down a lot further.

They put out results this morning. They do 25% liquids. They are trading significantly below book value. This is a great story. It would be tremendous to get it at the $3 level. (Analysts’ target: $4.10).

He likes it. It is cheap compared to book value. Oil and Nat Gas. It is so cheap right now and is very attractive. The balance sheet is attractive since they knocked debt off it. He thinks it will be a buy during the tax loss selling time.

The list of investables in Canada is not a super long one. Their use of financial leverage taints the name for very, very long time. If you are bullish on gas, he could list off 5 names that you would want to buy ahead of this. Not a name he would own.

The majority of this company’s shares are all in the US and Europe. They are doing production Q1 with 34,750 BOE’s and reporting the results next week. They are really focused for natural gas at the Spirit River. This could potentially be a double-digit stock by 2018, so if you can buy it a little lower than where it is today, it is a table pounding Buy. (Analysts’ price target is $6.25.)

A down and dirty natural gas name in the deep basin in Alberta. Quite good assets with an extremely cheap valuation. People have been worried about previous debt issues, and he thinks those are misguided, if they remain. Any debt is well covered by cash flow. New management which is very focused on shareholder returns. (Analysts’ price target is $1.25.)

This had its glory days in 2014 when it was $11.65. It is getting very, very cheap. The street is unhappy because of the debt load, but they have resolved that. There was concern about production and they are in the process of resolving that. He is beginning to think that this is attractive and has it on his watch list. BV is $3.50, so it is one of the biggest discount to BV out there. The balance sheet has been improved. They paid off their bank debt by asset sales. The debt load is now $360 million against $860 million of equity. His NAV calculation is $2.40, which is very good. Producing about 24% liquids and 76% natural gas. Production in the 4^th quarter was 32,000 BOE’s a day, down from 40,700 from the year before. What he doesn’t like is that for a company that is that high in natural gas, production expenses are $10.57 BOE in the 4^th quarter, and should be in the $6-$7 range.

In the past it had some good attributes. Then their decline rates got way too high. They spent a lot of money on infrastructure and now are forced to sell some of it because debt has gotten too high. There are so many other names you can buy.