Spartan Energy Corp (SPE.TO)

This is among a handful of companies that has done everything right, and continue to do so. A very disciplined management team. When you find a management team with a low-cost resource and a good strong balance sheet, you don’t even worry about the commodity price. When oil was at $80, it might have cost this company $30 to develop their oil and bring it to production. That is huge leverage to the positive. He doesn’t think those costs to operate and to drill are going to dramatically increase in the near term.

This has one of the hired highest quality team’s asset basis in southern Saskatchewan. Have made an enormous amount of money for a lot of investors. Because of this, it trades at a higher multiple than some of their peers, but that is very much founded. ARC Resources (ARX-T) is selling off their Saskatchewan assets. There are very few names left with the financial capacity to go to the market to raise money. His guess is that Spartan would be one of them. He could see $4.82 share price in a year, a 40% upside.

Great company and great management team. This is richly valued right. Well owned and well-liked. Perhaps we are going to need to see higher oil prices for things to go much higher. Thinks this is going to be a “go to” name once oil prices start to improve.

An interesting small cap name. It has a fantastic balance sheet, good assets in Saskatchewan and Alberta. It has reasonable cash flow even at these levels. It should act very defensively.

Spartan Energy (SPE-T) or Cardinal Energy (CJ)? He is very constructive on this. He likes management’s strategy and their location in Saskatchewan. Feels management has very good discipline in terms of what they want to do and how they are going to do it. Very proactive in keeping the balance sheet sacrosanct, and not paying more than cash flow. At $30 a barrel they are fine. It is expensive, but will always be expensive.

(A Top Pick March 17/16. Up 26.45%.) They have access to capital markets and a premium price paper. Also, this is an environment where there are more and more transactions happening. He expects them to be an ongoing consolidator in Saskatchewan.

(A Top Pick June 9/15. Up 7.91%.) He still likes this very much. Probably one of the best managed companies in the oil patch. Has crossed the magical billion-dollar price range, which will bring in a whole new slew of investors. This is still a Buy.

(A Top Pick May 19/15. Up 2.56%.) He would argue that this is one of the best managed energy companies out there. They are going to continue to execute well.

A fantastic little shale oil producer in Western Canada. Very conservatively run with very little debt and very good assets. Recently made an acquisition. He loves companies that in the downswing of cycles, take advantage of a downturn, the ones that don’t get caught up with too much debt. This was one of those.

Loves the company but at $3.20 the stock makes no sense to him. It is already embedding huge upside from making accretive acquisitions. He doesn’t like paying up for a deal that they may or may not do. The stock is overvalued.

A debt-free company at present. Management has done an exceptionally good job of not overpaying and buying things in this environment. They have a war chest and are likely going to buy something.

(A Top Pick April 1/15. Down 9%.) This is a great name in energy. Recently did a financing. They are profitable all the way through the cycles. They are breakeven at $30 oil. A low cost provider. Very good management team. They have the ability to withstand these oil prices and lower. (See Top Picks.)

(Market Call Minute) Cashed up and no debt, ready for acquisitions.

(A Top Pick April 2/15. Down 6.12%.) A company that will be able to thrive in a low commodity environment. They have access to capital and have the support of capital markets, and will be able to pick away at assets that are getting shaken out of weak hands, and emerge from the downturn a stronger company. We are through reserve season, so everybody has a fresh report in hand, which will give would be buyers a bit more confidence in terms of looking at assets. Also, April is bank line redetermination season. These happen twice a year, and the last couple of times the banks may have been a little bit more lenient and willing to let some skate through, but now will be applying more pressure to sell assets.

(Market Call Minute.) The highest valuation of any oil/gas company he could find in North America. Great assets, but too high for him.