David Cockfield Pacific Exploration & Production. PRE-T TOP PICK Dec 13, 2012

Closed at $21.18 and his model price is $34.34, a 62% upside. However, he doesn’t think the stock will trade above $23. That has been the ceiling of the stock in terms of his valuation. Nice yield of 3.4%.

This or an oil sands play? You want to be in a large cap company rather than a smaller one, particularly when the commodity price is not hitting new highs. If you look at some of the oil Sands plays, particularly Suncor (SU-T), it has some very attractive properties, where the breakeven cost for them is in the high $20. Thinks the internationals, such as this one, are deeply oversold. Until you see that commodity move up substantially, $100 and above, he doesn't think you get a catalyst for these names.

He got out about 6 months ago. Management kept missing their objectives. There were questions about leases reverting back to the Columbian government. He feels the risks are still there. Take your losses and move on.

Would recommend you sell this, because the biggest risk is that their licenses in Columbia are coming due and they will lose a lot of their properties. If you want to hold oil, switch to another company.

You have to play the safer names in energy. He would not roll the dice on this one. Play a little more safe, better balance sheet, etc. Prefers RRX-T.

Doesn’t follow this one that closely, but the dividend is definitely in danger. It is over 20% right now. They are paying a dividend based on an asset that they literally have to turn over to Ecopetrol next year. They haven’t enough current cash flow for that asset.

Got out of this some time ago. Feels it has some detrimental aspects that you have to recognize. Some of their major fields will revert back to the Colombian government in a relatively short time. Haven’t been that good in terms of their ability to produce some of the fields. Discoveries have not kept up in terms of the quality and size.

Short. They were not able to extend the life of the rubiales field, which drives 40% of their value in production, a balance sheet that is getting worse, there is a lot of insider selling, their reserves are grossly overstated, and they are giving to a charity they control. It is likely to face a reserve write down and then eventual extinction.

It is in a terribly financial situation. They were deploying capital into several countries and now debt to cash flow is very high.

(A Top Pick March 23/15. Up 78.95%.) *A Short* Overall this was a good short at the time. He closed it off when oil rebounded. With Shorts you have to have a much narrower window because things can turn around.