Tourmaline Oil Corp (TOU.TO)

It is a senior natural gas producer that he used to own. He holds the management team in high regards. They are remarkably managed to grow. He exited because he was not constructive on natural gas pricing. It was a goto name, otherwise. Production is growing and they are doing so profitably. It is hard for them to get their gas out of the basin and that is what keeps him out of the stock.

One of the best management in the industry and one of the best balance sheets. Has great properties, mostly gas and mostly in the Montney area. It has suffered from the huge decline in Canadian natural gas stocks. At these prices, it is very reasonably priced. Sold some of his for tax-loss selling but will be buying it back in 30 days.

One of his favourite non-dividend paying Canadian energy stocks. About 80% gas, but is doing more on the oil side now. He is prepared to buy more once he feels comfortable with where natural gas prices are going. There is still the problem of getting our natural gas to market, when we are at the end of the pipeline. With a 3-year horizon you will probably have an opportunity to claw the 35% loss back.

This had a negative transit in the 1^st week of August. It has tried to rally past that negative transit, and now we are floating down to another EBV level. It has a chance of hitting $15.80.

It broke the old trend line in early 2016. At the end of the year it started into a downtrend. Currently it is still in it.

An extremely well-managed company. Until recently, it has always looked expensive to him, relative to some of the alternatives in the oil patch. It is nearing areas now where it is beginning to hit his screens, and he is beginning to take a closer look at it. This could be a good opportunity.

A great Canadian gas stock. The knock has been their inability to hit guidance in the last couple of years. Have now set that as a priority in 2017 by building up a little more flex into the guidance to account for pipeline (?).

It seems like they need a strategy change. The traditional strategy was “if you build it, they will come”. You actually have to believe that maybe there isn’t a buyer and after building a great big production company you maybe have to live within the numbers. This has to be run for profitability, not for the resource. The strategy change is probably more important than driving the stock price. We have too much gas as well as pipeline constraints in the Canadian Western Basin.

One of those trophy stocks that institutions love. 85% natural gas, and one of the lowest cost operators in the industry. BV is around $25.61. Debt is only $1.4 billion against $6.9 billion, so a very healthy balance sheet. Have one of the lowest operating expenses in the sector, $3.50 per BOE. Great management. If the stock got down to the low $20s, it would be a great buy.

(A Top Pick April 5/16. Up 14%.) The 2^nd largest natural gas producer in Canada. Exceptional management team.

A well regarded company. Good insider ownership. When a company is in hyper growth mode, it is difficult to manage expectations at times, and a slight knock against them may have been that they have not hit production guidance over the past while. They’ve taken it upon themselves to really tighten that this year. He is a little worried about Canadian gas, because we do have “take away” capacity issues, but other than that, this would have been on his top 3 list.

He was expecting energy to emerge much stronger at this point in the cycle. Oil was down to $29, rebounded to $45, which was more profitable. We’ve had a few quarters of oil being at that level. He was expecting Q4 and Q1 to be better than they were. This company has a very low return and is slightly positive, at less than 1%. You should remain in this stock.

Natural gas. These companies have really cut costs in a very major way. If, as in when, prices start to go up again and volumes increase, this company has some very aggressive targets. Their current production rate is 250,000, and they want to get that to 400,000-450,000 by 2021. Has good management that is thinking ahead, and this could be a great long-term hold. It does not pay a dividend.

In 2014, this was a $60 stock. In early 2015, it bottomed before a lot of stocks did in Jan/Feb 2016. The high was just under $40 in Oct/16, and is currently in the $29-$30 range. In the 4^th quarter, they were doing 192,000 barrels a day with $4 annualized cash flow. They did a massive acquisition in December from Shell, so production volumes will continue to go up. Operating costs are excellent at $2.90, so they will do over $4 in cash flow this year. BV is $6.8 billion, and their debt is only $1.4 billion, very manageable. Any time you see the stock below BV it has been a gift. If he is right about the downside in the next little while, you are potentially going to see this company trade below BV in late Q2 or late Q4 and that is when you would take a serious look.

This has struggled along with natural gas prices, along with some of the egress issues that a lot of producers in the Canadian Western Basin are facing. There is a lot of gas being produced in Western Canada, but not enough pipe to take it away to market. As a result, the Alberta price for gas is trading at a pretty steep discount to the Louisiana price. This is one of the best producers in the basin. They produced about 190,000 barrels of oil equivalent last year, predominantly natural gas. That is going to grow to about 240,000-260,000 barrels this year, mostly on the back of the acquisition of the Shell assets.