Whitecap Resources (WCP-T)

He had a massive position in Veren before WCP "stole" (bought) it. He was very excited about Veren's asset base. However, he is neutral oil now, so doesn't own WCP (prefers natural gas stocks). But he sees massive value in WCP. Are paid an 8.6% dividend yield, which is sustainable to low-$50s oil. Is upside here. Trades at 4x cash flow. At $70 oil, it will trade at a 5x multiple and shares will cost $14.

Possible risk of oil prices coming down in next 6-12 months. Important to hold a stock that can withstand commodity price volatility, good balance sheet, not too much debt, strong assets. Its lighter oil is subject to higher decline rates, about 26%. Merger will see lots of synergies. Digesting debt. Hesitant to own for short term.

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All oil has been hit recently, but long run energy is key to future growth. So, WCP is buy, can expand their reserves and a good low-cost producer.

Production of 179,051 b/d rose 5.5% and beat estimates  of 174,000. Crude production rose 5.6%; NG liquids production rose 14%; gas production rose 2.7%. EPS of 27c did miss estimates of 39c; Revenue of $942M beat estimates of $876M. Guidance will be provided when the VRN merger closes. Even though they missed estimates, per share earnings still more than doubled. Payout ratio (12 months) is less than 25%. The dividend looks secure even with a drop in commodity prices.
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Profitable around $51, so you have about $6 of margin right now. Growing 3-5% per year. Paying down debt, balance sheet extremely strong. Dividends are sustainable down to $52. Wouldn't be surprised if they dialed down capex, which makes the dividend even more secure. Montney assets are significantly better than the market appreciates. Good natural gas weight. Yield is 9.3%.

Broke below the March low, an indication that it's going lower. Barring a dramatic reversal in the price of natural gas, which it's tilted more towards, it's probing lower. Going back on a 3-year chart, no place to hang your hat yet.

Lots of damage in last 2 days. There's a lot of value there, but you have to wait to see where to step in. All of energy will be wait and see.

Merger could be really accretive, better together. Nice dividend. Scale could really help them both. He hasn't yet seen the terms of the deal.

He likes the WCP-Veren deal. Both were already decent companies, but together will enjoy synergy from cost savings. It will become the 4th-largest light oil producer in Canada. Management knows what it's doing, valuation good. Bigger companies here tend to enjoy a multiple increase. Veren shareholder will receive the WCP dividend, a big increase for them. The combined company will do pretty well.

Top mid-cap name, high dividend yield, aggressive product growth. Ramping up production, which will offer strong FCF. But capital spending is rising as a result. Scores 10/10 on value, 8/10 on fundamentals. Analysts seeing potential upside of 47%. Healthy dividend of ~8%.

M&A activity is not his sweet spot. When Eric Nuttall's on next, ask him; he can unlock the growth story for you. Larry's much more of a trader.

Has looked at this for a long time. Started a new position due to selloff on the merger with VRN. Really likes Canadian oil & gas long term, tariffs notwithstanding. 

Fly in the ointment is our new prime minister, Mr. Carney, who continues to be anti-oil and -gas. Paradoxical to him, given Canada's absolutely superb endowment of oil & gas resources and related technology. Perplexing that political leadership of Canada doesn't understand the energy patch business case when we have lots to sell to lots of willing partners.

Here, he can look at support on the chart and know that it's real because we know about tariffs and the merger with VRN. He needs a bounce off support; if it doesn't bounce, and goes below support, then you have a problem and don't want to own. If it does bounce, then you have a target of between $11-12.

Concerns about tariffs are already built into the price, and that's why it's down.

Owns shares personally. Excellent company with very strong management team. Very good assets with safe dividend. Capital discipline within the sector has been very strong. 

Loves these energy names at this point in the cycle. Yield of 7-8%.