Tamarack Valley Energy (TVE.TO)

Another example of a business that has continued to surpass the market’s expectations. Had 11 quarters in a row where they beat the estimates on the street. Made an acquisition earlier in the year that was financed higher than today’s stock price. Low operational costs. Little to no debt. Well financed acquisition at Wilson Creek in September set the stage for continued growth.

(A Top Pick Jan 15/14. Down 34.11%.) Still has a lot of respect for management. They are still executing the way he thought they would. The price of oil really started to go against them and capital flows moved out of the stock. It broke down from a technical standpoint, so he sold his holdings. He continues to like it and is still on his radar screen. They are seeing some significant cost reductions happening in their facilities, but also in their drilling costs, which will bring down their production costs. This means that their netbacks, even with the price of oil dropping, are still going to remain fairly high. There is also a pretty good chance that they might sell some of their facilities to give them extra capital, as opposed to having to go to the market.

(A Top Pick Jan 15/14. Down 0.46%.) Sold his holdings in the $5.20 region. Story hasn't really changed much, it's just the dynamics of the industry and that the wind was starting to go in their face, and not at their backs. Great management and great production and are continuing to grow their base. If there was a correction in the price of oil, he would certainly go back into this again.

(Top Pick Oct 23/13, Up 71.59%) Very seasoned management. They did some good acquisitions. You just don’t get this kind of growth curve.

Recently did a financing just above $7. The whole energy sector has really been beaten up, especially in the last 2 weeks. It’s not just a specific company, but seems to be more of a flow of funds out of the sector. Likes this one. They continue to execute on their plan. Just made a small acquisition and continue to build up their properties. Will probably see higher productions from them. Expect that they will eventually be taken out down the road. Probably cheaper than some of its peers.

(Market Call Minute.) Likes this one. Management continues to do a great job.

The day is gone when they are drilling to try and find a huge 5000 barrel a day well. This is now a manufacturing process. They drill a well and it comes online at 60-80 barrels. After a while it declines down to something like 40-50 barrels a day, and then stays fairly steady. They then try to enhance that production through water, polymer or some kind of enhancement. Have some interesting projects where they are doing a farm-in with Taga North, which allows them to participate in Taga’s property which they’ve bought. They are doing longer segments now on the horizontal so that they only have to pay for a 1 mile segment, not the 2-mile segment that they actually achieved.

Reporting early June, so we should get an update on some of their well results. Good management. Recently hit $6, which he considered as undervalued, compared to its peer group. You will get 20% per share growth in production and cash flow this year. Great entry point.

60% oil and liquids. Canada. This company keeps outperforming his targets.

Screens very well on his earnings based approach. Management team came from Apache Canada where they grew production from under 20,000 barrels a day production to 100,000 in less than 7 years. They are applying the same discipline to this company. Currently there is a huge discrepancy between Haves and Have-Nots in the Canadian oil patch. The people who have access to capital can get into and drill undeveloped properties and this company falls into that category. Just made an acquisition.

Very fast growing company that has done very well with acquisitions. More importantly, they have enhanced the value of the acquisitions. Drilling results are quite good. Spending a lot of time in the Viking formation. High rates of return and drilling costs are relatively modest.

Likes the company. They’ve made some acquisitions and are moving more and more towards liquids. Have done very, very well. Probably doing about 3200-3300 BOEs a day. NAV at the end of last year was $4.28 so it still has room to go. Low-cost operator. He has a $5 target.

Recently acquired Sure Energy, which is a great acquisition. Very confident operators. What really lies in front of them is the Viking opportunity and the Cardium opportunity. They have something like almost 400 locations on these 2 assets. Trades at a discount to its peers, which is not justified.

Doing almost 60% of their production liquids from 2 areas. Did 290,000 BOE’s in the 2^nd quarter and he thinks the cash flow will be over $1 this year. BV for Q1 was $286 and the NAV is over $4. He has a $5 target on this.

An undervalued junior. Have oil plays in the Cardium and Viking as well as heavy oil in the Lloyd Minster area. Have something like 150 drillable locations. Very experienced management team. Surpassed analysts’ expectations. Demonstrated excellent F & D costs, in other words their capital efficiencies are amongst the best. If you have limited cash flow to drill wells, it is best if you can do it very efficiently. Trades at about 50% of its peer group.