Strategic Oil & Gas Ltd (SOG-X)

Has been really hurt by the execution of this very difficult play they are in. Company is going through some high costs, to make sure this very extreme area in northern Alberta, is all pipelined in. There are good reasons why two very, very good, smart, rich people have got ownership of this company. He is very tempted.

This company really dropped the ball and has very little credibility. Sell and move on. Overspent and then increased debt levels so had to refinance. Don’t put money with a management team that does stuff like this.

(Market Call Minute) Totally avoid it. Management team failed miserably to deliver the results they promised and the debt to cash flow ratio is way too high.

Was bullish at 60 to 80 cents and then sold. Management team missed expectations a couple of quarters ago and he does not put up with this.

Likes this name quite well. Over the last 2-3 quarters, they have disappointed in terms of guidance. Very large land base and have only started putting pieces together. Over the longer-term, if execution turns out well, the stock will be rewarded with higher valuations. She is on the sideline and just watching their execution to see if management can deliver. (Host comment: Street consensus is that the stock will be $1.63 in the next 12 months.)

Has a great asset base and is executing all right. This would be on his short list of companies he would buy in this space, but he just doesn’t go this low at the moment.

Very attractive at current levels. They own a very large land base in Steen River, which has multi-zone opportunities so she feels the resource upside is very significant. Management has done a lot of right things to lock up the land space infrastructure and they brought in a good CEO. Disappointed shareholders in Q1, reporting about 2000 barrels while expectations where for 3000. Expects they will hit guidance towards the end of the year.

CEO is new to capital markets. Thinks he made a small error of being mildly aggressive in his forecasts for tight wells in one of their plays. Released information that did not exceed their type curve (?) so had a pretty dramatic selloff from about $1.35 to about $.90. It is probably overdone now. Have done a very good job of amassing a very contiguous acreage position in northern Alberta and have had good drilling success. It will take time for the CEO to get out of the penalty box and this is a very unforgiving market.

Thinks there is a significant upside in their Steam River asset, a light oil property they have been working on. Has been a slight change in management over the last year, which is probably good. The market is looking for significant production growth. $0.20-$0.24 a share cash flow is probably going to be light. He can see this as a potential double.

They have a concentrated asset base. Expects some positive news this summer. Done a great job of proving up this resource. Has invested in them in the past.

They could have a huge property in northern Alberta. They are holding right now on the strategic, but are sitting on the sidelines.

About a $250 million market cap and likes the current level of the stock. Developing a play at Steen River (?). For a small company, they own a lot of land and infrastructure in the area. Some of the wells they have been bringing on have extremely high payback. Company has been growing significantly. Exited 2012 with the production of about 3000-3200 barrels. She can comfortably see them bringing production to 10,000 barrels per day in 2-3 years. 9.9% price to cash flow.

A really exciting asset base. Complicated because they have up to 7 different zones now, which they think are going to be hydrocarbon bearing. Difficult story to tell because there are no other companies in Canada that are chasing their zones. Very unique asset play. Having very good success. Thinks they could probably double their reserves. Trading at around 5X. He will be adding to his holdings on a bit more weakness.

Light oil play in northern Alberta. Grown by leaps and bounds over the last 2 years. Grew production from 300 barrels to 2000 barrels. When they got into the play, they found the wells were very, very prolific. Internal rate of return on some of the wells was between 80% and 200% so they locked up all the lands that they could as well as the infrastructure and now own about 350,000 acres. Expect they will be able to double production and do very well over the long-term.

Main focus is a play in Northern Alberta, Esteem River (?). Have about 40 sections of land, which contain a lot of oil so wells they drill are very economic. Some of the wells have paid back in less than 6 months. Have more than 150 locations to drill in future. Broke even last quarter in spite of a fire and the Rainbow pipeline being down. Expecting 40%-50% production growth going forward.