Crew Energy Inc. (CR.TO)

Has been a weak performer. Had some operational issues in some of their plays. There has been a bit of a taint. Stock is really cheap and the balance sheet is good and there is talk they could be selling off their assets and just become a Montney player. Has acreage of really good quality.

He is a little bit uncertain about the direction of gas and this company has been focusing their asset base more towards Montney gas. There is a pretty compelling case with this company that they have built an asset base and have 373 sections of Montney rights and 10 of TCF gas in place.

A northeast BC Montney oil and gas producer. Producing 23,000 barrels per day. Got beaten up because the Princess play didn’t turn out to be the princess they thought it was going to be.

Has been in and out of it. Likes it because it is an interesting way to play differentials as well as improving natural gas prices, and this is fairly unique in the space. They have a big gas inventory that they can capitalize on as prices improve. Sees gas prices improving over the next two years. You will probably continue to see good entry points as the summer progresses and possibly the best at the end of the summer.

Put your seatbelt on, a beta of almost 2. It is cheap. You get to play the oil market with it. Light oil, heavy oil and some gas. You would be buying at its support levels.

Impressed with management. Running a 27,000 BOE’s a day company. Hit some glitches so investors got negative on them. Well-run company and they are turning their problems around and looking at ways to create value. He could see it back at the $10 price range but if you own, he wouldn’t average down.

Gives a nice mix of about 50/50 between oil and natural gas. Has been a disappointment over the last few years. Oil play at Okisco (?) did not meet expectations but feels this is now priced into the stock. Still seeing some pretty good results out of their Mannville/Horizon. On natural gas, they continue to build out a nice portfolio both in the Montney and the Deep Basin. In general he feels the stock is undervalued. Should be closer to the $8-$9 range.

Over the last couple of years it has come down from the 20s. You will not see a material improvement but it is not time for the long-term, just a trade.

Outlook is not too bad. One of the keys for this company going forward is delineating some more of their Montney lands.

Fundamentals are one of the key reasons it is going down. Estimate revisions and change in earnings per share. Often this is sequential. The recovery should have continued but it didn’t. He can see some more selling going on. Looks like it will lose another dollar from here.