Eric Nuttall Whitecap Resources WCP-T HOLD Apr 15, 2025

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.

Loves the new combination of WCP + VRN -- very synergistic, strong free cashflow, increased scale. Doing some asset sales, which will pay down debt and improve balance sheet. 3% lower capex is prudent in this tougher environment for oil.

Bad news is that it'll move as oil moves, and oil's in a tough place here. Trump will want to see oil prices lower, and the Saudis will want to play along with him. This stock works now, but will be a tough place if oil comes down a lot.

There are a lot of choices in the sector. He wants the technical picture to be as supportive as the fundamental picture. Possible that the theme is going to pick up steam. He isn't a value investor, buying cheap and hoping it'll get less cheap. He wants to buy companies recognized as the leaders in their group.

He'd skew toward ARX, as it's the best-run intermediate O&G company in Canada. On most fundamental metrics, WCP is cheaper. It depends on your own investing style. He's often willing to pay up for management that he considers superior. In a 5-10 year timeframe, you can't go wrong with either.

Harder and harder to start a new company, so consolidation makes sense. He owns CNQ, because if the market moves it'll move that name first. Anyone who wants to own WCP, owns it already. And there's no immediate catalyst to the industry. Be patient, collect the dividend, and know that it will be higher later.

It is focused on sustainable yield but has had reasonable growth as well. He isn't buying because he is interested more on the growth side. Another like this is Prairie Sky which has a very talented team.

Trapped in no-man's land, just like many of the other oil stocks. In a swing-trading range; buy near the bottom, sell at the top. If there's a breakout and it seems as though it's staying, he'll actually add more. But if it starts to roll over, he sells. Might be a bit more upside, but don't pile in at this point because it's so close.

He's totally out of oil producers, focusing more on pipelines (more volume-sensitive than price-sensitive). Purchase of Veren was exceptionally well timed, great asset at a great price. Lots of oil supply right now, concerns about demand, thinks oil will crack $60 again and maybe lower.

There is a merger deal. The earnings report last week was very good. He owns it in the growth fund and likes what they're building. Has very long inventory base. It is good for both oil and gas and can hold their dividend at 7%.

We'll have to see what the merged company looks like on the other side. No strong opinion on it. Looking at it from an options perspective, companies going into deals like this can see their option premium disappear.

If you don't own it, you can look to buy it ~$10 out to October, and sell that $10 put cash-covered (so 54 cents below where it's trading now). This lets you collect about 20 cents. You'll generate 2% over 2 months if the stock stays here or goes higher, and if the stock goes down you'll be buying it.