Husky Energy (HSE.TO)

Numbers that came out over the last year have continued to disappoint. They have good asset packages but production does not meet his expectations. Good company but other than the dividend, not exciting.

They have 2 assets that are coming online with Luan (?) having its 1^st gas towards December and Sunrise projects having its 1^st oil towards the 1^st quarter. Not high risk because it is integrated. Have been achieving pretty good production growth between 5%-8% over the last couple of years. Very strong balance sheet. He has a $35 target on this one.

Diversified Canadian producer. Because of its integrated operations it tends to have a lot less volatility relative to some of the others. About a 4% yield. He could see $35 a year from now.

Got new management about a year ago and are focusing on developing their resource and the various properties they have. Have their natural gas play in China that should be coming on stream over the next year. Slowly executing. Provides a decent yield. Probably one of the better performers.

Good integrated company. Have some good projects coming on. Until they get the Keystone in place, the whole sector has a cloud over it. Wouldn’t be in a great rush to buy any of the integrateds.

Prefers Methonex. Would rather see resolution into how this stuff gets out of the oil patch before going in too deep.

(Market Call Minute) Has a reasonable yield but he prefers others.

New CEO has done a very good job in managing expectations. Had 9 or 10 quarters of making production targets. Have 5%-7% of production growth over the next number of years and you get paid while you wait. 4.36% yield.

(Market Call Minute.) Turning the corner and have the right strategy but you’ll have to wait a few more quarters to see if it plays out.

Has come off with all the oils. If you wanted to get into one of the integrateds, this wouldn’t be his pick. Has been a pretty unexciting stock. Yield is okay. There are better places to go.

Very similar to CVE-T, between 3-4% yield. Last 4 weeks have been negative but before that was perpetually good. If you own it, he prefers one of his top picks or CVE-T.

There are 2 things going on with this company that are a bit of a tug-of-war. Wide crack spread has really helped them but he thinks this is going to narrow in the 2^nd half. Does like that their production growth has been climbing and they are doing this with flat CapX, which is impressive. Have 2 really good projects coming on and if they execute could be a significant boost to NAV. Low risk and a good balance sheet.

Stock has done extremely well. Has probably outperformed the TSX for 2012. Looking at it now, you have to ask what is going to cause the stock to move higher. Thinks there are better things out there. 4.1% yield.

(Between Husky (HSE-T) or Trilogy (TET-T), which company should be kept?) Of all the medium-sized and higher companies, Trilogy is the one that is most likely to be taken over.

Thinks you will have to have patience with this one as he expects it will be choppy. Over time though, it is going to do very well. Canadian companies that have large in-place reserves will do very well over the next 5 years as a consequence of continued disruption in the global market. An interesting stock if you have a five-year horizon.