Peyto Exploration & Develop. (PEY.TO)

Natural gas with a 2-3 year outlook? The “go to” name in natural gas has to be Peyto (PEY-T). Great company and great balance sheet. Wonderful management. You may have to hang onto it for a couple of years. 2.7% yield.

A core holding for a decade. Well managed. Top Tier operating costs. A top performer. Great growth per share. 85% leveraged to Nat Gas.

He really likes it. They just announced a $100 million bought deal. There could be a pull back from this tomorrow. They are clearly a well managed company and have done very, very well in their exploration in the Nat. gas area. They are paying down debt. He is constructive on Nat. gas but you have to be patient.

(Market Call Minute) Liquids rich gas. Low cost producer with lots of opportunity.

Probably your best dry gas name out there. Cash costs last quarter where $.97 per unit of natural gas, which is very low. 2011 was an exceedingly tough year for the industry. Their margins were 36% versus the average of -8%. Top producer. His problem is that the expected payout ratio is still high at 196X this year’s number but declines to an acceptable range of 140 next year but that assumes natural gas stays at $3.50 level. Getting really pricey at 12X adjusted cash flow versus the group of around 9.

Holds management and the quality of the assets in very high regards. This is one of the few oil/gas companies that is profitable, which they get from having very low finding and development costs as well as being the lowest cost producer in the country. If you are bullish on natural gas, this is a great one.

This company remains one of the most attractive gas producers. It has the lowest cost structure of any intermediate gas players. Acquisition of Open Range Energy is somewhat accretive, 10%-15%, but not a home run or a game changer. If there is a change in gas prices, this is a “go to” name. You are looking at least a year out before you see this rebound.

This is the name he would recommend in natural gas stocks. Lowest cost producer. The gas story is a weather driven story.

Great track record. Started in 1998. The lowest cost gas producer in Ontario. Good substantial producer. 3.4% dividend so you get paid while you wait for the recovery.