Bellatrix Exploration Ltd. (BXE.TO)

High risk, high reward is often overused as an expression, but in this case it really applies. The company could go under, but it also has a chance to become a 10 bagger. They’ve dealt with a lot of their debt, so financially they are in better shape. Has a pretty good capital budget going forward and still have some good properties, but they sold a lot of good properties. In danger of losing the New York listing, but just got it approved for it to continue for another 6 months. It is under $1 on the NYSE now, and it wouldn’t surprise him to see a stock consolidation. Those usually really hurt stock prices. A reasonable speculation.

They just sold some assets for around $45 million. They needed money in the kitty for sure. The company is in a certain amount of danger. Thinks there is a possibility it could go bankrupt. If they sell a few more assets, it could actually have a huge, huge return to form. Oil/gas prices are key.

She prefers other companies. They got into some trouble on their debt side and were forced to sell some of their midstream assets, which creates rising costs on the processing side. Have been doing well lately in terms of trying to get their drilling costs down. A highly leveraged play looking for a way out. They essentially need capital.

Sell it and buy almost anything else. The management team has tripped and fallen so many times.

(Market Call Minute.) Has a debt problem and are going through a process of selling assets and facilities to try and fix the problem.

(Market Call Minute.) They are ramping up debt with the decline in their production profile. Not a good combination.

He would sell and take a tax loss. Either Buy another stock that is undervalued or outsource the money to somebody to manage it for you in the energy space. This name has been a total disaster. Leverage is very high. They have a history of overpromising and under delivering.

It is not at risk of filing for creditor protection. They have too much debt, however. There is no reason to own this stock.

(A Top Pick June 11/14. Down 61.27%.) Sold this when he trimmed his energy holdings last fall. This will take a while and won’t be the first one to move back up. Would prefer others at this point.

A gas plant needed to get constructed at their Alder Flats area. This is a bottleneck issue that appears to be close to being resolved. That will probably be a good signal to the market. They have been busy with a variety of joint ventures, and he thinks the joint venture funding is a unique source off balance sheets, none dilutive to the shareholder base, and is a good thing. If they can convince the market that the balance sheet risk is going away, it will probably get a response.

Sold most of his holdings in the $7-$8 range because management was not hitting their guidance and there were operational issues. Looks pretty cheap down here. He would prefer Paramount Resources (POU-T).

Thinks it is prudent for small and mid-cap E&Ps to be selling assets and infrastructure that is non-core for them, in order to clean up their balance sheets. E&Ps don’t really get rewarded in the marketplace over the long run, for owning and investing in their own infrastructure, because what investors really want to see is cash flow per share growth and production per share growth.

This is a team he is not comfortable with due to lack of inside ownership. An activist investor was telling them to sell their midstream operations and he is not in favour. It is not a name he needs to go near.

(A Top Pick April 24/14. Down 70.87%.) His average cost into the stock was less than $2, and he got out at around $8 last year. He got out of this because A) financial leverage was rising, and B) they were running into facility constraints.

(Top Pick Apr 21/14, Down 69.70%) He sold it just after he recommended it, taking a small loss.