Tourmaline Oil Corp (TOU.TO)

(Market Call Minute) It is mostly natural gas and it is hard to get excited by that. Great management does not matter at these commodity prices.

This is gas. One of the lowest cost producers and is doing extremely well. It’s in the penalty box. A high-quality company, the debt is completely reasonable and the valuation is finally reasonable. It has extraordinary growth.

Over 80% in natural gas. If you have a longer timeframe, this is definitely one of those companies he would consider buying if natural gas prices turn up. Well managed. They keep their cost structure way down. It might be a year before you see any movement in natural gas prices.

Has been bearish on gas for the last 5 years, and continues to be so. There is just too much supply and he can’t see any dynamic to change that. This winter looks like temperatures are going to be well above average. Storage is at an all-time high today. The only hesitation that he has in this name is their bias towards gas.

Company has been executing exactly as they had said they would do in the last quarter. More importantly, they have a sustainable business plan of being able to have huge changes in their ability to control costs and CapX, and have great access to capital. Highly sensitive to natural gas prices.

Energy has been a difficult space and continues to be. Within the group, this is a high growth company, but it has a lot of Gas exposure. He would be careful because (a) he is short the energy sector in some funds and (b) we are at a time when people do a lot of tax loss selling and this one is going to be hit by it.

(A Top Pick Aug 25/14. Down 46.84%.) The sector sold off, and compounding that, especially most recently, everybody loves the management team. As companies grow at the rate that they do, eventually the law of big numbers catches up, and it gets more and more difficult to offset declines. He expects gas prices to be incredibly weak this winter. This company is roughly 87% dry natural gas, and he can see the stock having a bit more in headwinds relative to some other names.

It is his number one growth story. The management team has been absolutely spectacular in two previous iterations. When this market moves it will absolutely be a go to name and institutions will pile into it. They have incredible assets.

(A Top Pick Nov 5/14. Down 23.91%.) Still a core name for him. A liquids rich gas producer. It is quite unique in terms of its size, in that it is producing over 140,000 BOE’s a day but still growing production per share, in the neighbourhood of 25%. He sees several years of growth ahead of it.

(A Top Pick Sept 13/14. Down 39.56%.) Growth is bang on, it’s just the product price. Has through production growth of 20% per year. He is hoping for a little more stability and upside in the price, and this will move again.

(A top pick July 25/14. Down 44.24%.) It is being penalized along with a lot of other names, even though it only has 17% liquids exposure. He still likes all the attributes. Isn’t buying it currently because he is targeting oil names that can go up by 50% without taking on a lot of risk. This one would be 30% rather than 50%. If you are bullish on natural gas, this has great insider ownership, a fantastic geological team and low debt.

They all continue to pull back. It is like capitulation the last couple of weeks. She has not started buying energy for new clients. She thinks there will be more volatility for the next month or so. It is a well managed company, but you can focus on larger cap, well managed companies with good balance sheets.

He thinks the two projects will happen. Between 2016-18 you will see some of these large companies try to get more solid molecules under the ground. TOU-T will do wise things.

Very well managed company with an excellent balance sheet. They have a good cost of capital. Their projects yield a good rate of return.

One of the best run oil/gas companies in North America, maybe even the world. They have done all the right things. Have been buying assets for pennies on the dollar in the last year or so. They have enormous resources. If and when this LNG thing comes together, this is probably the 5^th largest gas company in Canada. Low, low cost producers. When energy prices recover to a more reasonable level of $70-$80, this will be a $60-$70 stock.