Paramount Resources (POU.TO)

Tourmaline (TOU-T) or Paramount Resources (POU-T)? He would buy financials before he bought energy.

They spent a lot of money getting a gas plant going. That is built into the price. We are just starting into a bullish time for Natural gas (Mar 22). We are just below level before the run up from last year. When it gets above $40 it will be breaking out. Rigs Nat Gas are coming off line, like oil, so this is positive. He doesn’t see huge returns on this one, however.

Is going through a transformational 24 months with a massive Alberta project. If they meet their targets, the price to cash flow production looks reasonable. He likes it, but you need higher condensate prices.

If gas prices go up, this could do extraordinarily well. They have ploughed a huge amount of money into their own processing and infrastructure. He is not in this now because there is a huge amount of natural gas drilling going on, because of the potential for LNG exports. Before you get an export license, you have to prove that you have the gas. Once you have the gas, and if the LNG port is not ready to go, you are going to dump some of that gas into the market. This puts a bit of a ceiling on the natural gas price, which could be an issue for this company. If we get a really cold winter, this company could do very well, but if it warms up this company might not do that well.

(A Top Pick Jan 16/14. Down 47.01%.) Sold off with the oil market. The story is still intact. At the inflection point of its evolution and growth as a company, where it’s in the process of completing in 2014-early 2015, some surface treatment facilities that dramatically increases production. It will go from 25,000 barrels a day to about 60,000 barrels a day.

(A Top Pick Dec 16/13. Down 7.62%.) Although it is gas and it has huge growth, it pre-funded the growth with a leveraged balance sheet, so it has acted relatively poorly in the last month, more so than what he would have thought. It is only going to take about 6 months for a ton of cash flow to come in, because they are already up and producing. When that happens and the debt gets paid back, it is going to look fine. He would Buy it for new clients today.

Ultra liquids rich Nat. Gas company. 6 times debt to cash flow. It is not a glorious position to be in. They have a really good asset base, however.

This is the name that just suffers from any obvious catalyst. Thinks it will go sideways. A decent name.

Stock started to fall well before the price of oil did. Energy is a tough neighbourhood to be in.

Natural gas. Management doesn't pay themselves a salary. Well-run. Going from 20,000 BOE’s a day to 70,000 because of their new plant online. Thinks they are going to be at 125,000 by 2017 because they just raised $350 million, of which $150 million is going towards 2 new plants. Has tremendous growth ahead of itself. Look at this as a 2016-2017 growth story.

(Top Pick Sep 11/13, Up 85.28%) Big production growth that he thought was so certain. They had to build production facilities.

Just did a huge increase in capacity of various gas plants. You need to own this if you believe in gas. Likes it for its rapidly escalating production levels. Competent management.

She has been a bull on energy in general since last fall. We’ve had an epic cold winter and an epic cold summer. Energy prices rallied and then checked back this summer because of the cold. Summer is over. They have incredibly strong assets.

(A Top Pick Sept 11/14. Up 82.88%.) They had a deep cut facility, so wet gas with lots of condensate and liquids. They have done exactly what they said they would. They are just on stream and we are now starting to see the benefits. There will be a doubling in cash flow going forward in the next couple of years. His one-year target is $75.

Tourmaline (TOU-T) or Paramount (POU-T)? This is a case where you have to choose the better of 2 good companies. They are both pretty good, but he would put Tourmaline, far and away, as probably the best managed company in the oil/gas sector.