Long Run Exploration (LRE.TO)

Junior oil/gas company. 50/50 oil and gas in the Viking and Redwater area as well as Montney oil in the Peace River Arch. Trading at some of the cheapest valuations out there. 30,000 per flowing barrel versus 70,000 per flowing barrel on some of the intermediates. Have 1 million acres of undeveloped land. Sharp management. Could see this at $7-$8 in 12 months.

A natural gas stock that could be held for 5-6 years? This is the one that he likes. Recently merged with Westfire Energy. Sort of a mix of light oil and gas as well as. Feels this has the potential of being $6-$7 if current gas prices hold where they are. He is still not bullish on natural gas. Feels the supplies are going to keep the price capped for a while.

50/50 of liquids and regular natural gas production. Will finish this year with around 23,000 BOE’s a day with a goal of 25,000 next year. Balance sheet is in very, very good shape with only 250 million of bank debt on $500 million line. Cash flow next year should be $1.75 a share. Trading at a discount to BV. Big upside as they begin to execute. $6 target.

Small company so obviously that is where the volatility lies. This company has shown good per share production growth and continues to do quite well. At this level a relatively decent bet to hold and maybe even to add a little bit.

Has been for sale for quite a while. The strategic alternative process was dragging on. Was announced late in 2011. It became apparent that the list of potential suitors was not lined up to Buy in Spite of it being light oil in SW Saskatchewan. Ultimately they are ending up merging with Guide Exploration (GO-T). Thinks there is still some horse trading of assets to come.

There is nothing particularly wrong with this name other than that it is a small cap name. Unless there is a large capitalization buyer coming out that is going to purchase the assets, there is no real reason to go charging in here.