Paramount Resources (POU.TO)

The oil and gas sectors are good for the long term and increased demand. They are volatile in the short term. There is slow but steady U.S. shale deposit exhaustion. The long term fundamentals of Paramount Resources are good.     Buy 7   Hold 3   Sell 0

Well respected CEO with Jim Riddell.
Tightly held company within Riddell family.
Company roughly debt free.
Seeing meaningful upside. 
Potentially 100% upside in share price.

There is a rumour that Paramount has acquired a 9% holding in Nuvista. Paramount is outspending their cash flow and announced, if required, they may look to sell off assets and this could Nuvista. Both companies share prices have been pushed sharply lower as a result.

(A Top Pick September 15/17 Down 38%) This is the third version of this company, he suggests. Now a 90,000 boed producer it has stagnated with a large natural gas position. There is inconsistency in delivering economic results. He likes their assets, but he has gone to the sidelines to wait for that consistency to develop. They are trying to move their portfolio to include 45% liquids.

It is a fine company, he says, but would prefer to back other management teams who are doing a better job paying down debt. He is bullish heavy oil differentials for next year, so is targeting other companies.

Energy should get a bump with positive news. Enjoyed a good run in 2016 to mid-2017, then went sideways. If this falls below $12, then something significant is going on, but right now it looks okay.

A past top pick. He likes it. It's viewed as a natural gas stock, but it's really a condensate. Paramount missed its last quarter due to weather and a problem at a plant. It's a misunderstood stock. They run it like a private company and don't always tell investors what they're doing. Buy it on dips.

They get a premium to Western Canadian Select oil for their liquids. They missed their last quarter due to weather and their facilities, which is short-term in nature. So, the stock has pulled back under $15, which is a definite buy. This is midjudged as a gas stock. An energy play. (Analysts' price target: $21.22)

He would not own this stock. They have too much operational risk. Their funding is dependent on asset sales and management is vague on where future value is going to come from.