Eagle Energy Inc (EGL-T)

He stayed away because they went to the states to make acquisitions. He did not know why the Americans would not already take these assets. He stays away from it.

There is skepticism about their ability to pay the 19% dividend, and perhaps the prudent thing is to trim the dividend. The big change for them was their shareholder sanction to acquire some Canadian assets. Their asset base in the US is principally oil. The Dixonville acquisition was a pretty good move. It has a low decline and everything that a trust would like to own. The next step for them is to take a hard look at their balance sheet and to decide if they can hold onto that dividend.

When income trusts disappeared, this one found a loop hole where all of their assets need to be in the US. There may be better oil plays out there. 36% yield. It tells you that you probably don’t want to be in this stock.

Principally an oily asset base. Had a tough go proving to the market that the dividend is sustainable. This is obviously why the yield is so high. There is a little bit of risk to the dividend. When oil prices have been incredibly robust, this is probably more secure than when oil prices were to sell off a little. There seems to be a negative tone to the cross-border trusts. Feels the dividend is 80% safe. If you like oil, probably not a bad place to be.

A cross-border trust that was set up because they can take advantage of the SIFT rules. Their Texas assets are pretty boring, but are solid low decline. Because of their location, they avoid transportation problems. Doesn’t own this as a growth stock but as a high paying sustainable dividend model. They are going to do small acquisitions from time to time that will help. 13% dividend yield.

Biggest risk with this trust, would be the outlook for light oil in the coming year and 2015. Because of the large production out of the Bakken and Eagleford shale, we could be seeing pretty good discounts on light oil pricing benchmarks versus Brent pricing. 12.5% dividend would be an alarm bell for him.

Yield of 14% and generally this is a red flag. Had some production difficulties and were in a “show me” situation. Generally, when a stock is in a penalty box, it will stay there for 3-4 quarters. To overcome this, the company decided to produce 3000 barrels of oil per quarter, which they have done for three quarters. Also, made an acquisition using lines of credit, rather than through dilution. He has conviction in the management team. Feels the yield is sustainable.

Market is sceptical of their ability to sustain the 12.4% distribution. He believes the dividend will be sustained. This is a trust that has US assets. Tax treatment would be different if this held Canadian assets. Sufficient upside in their properties to sustain production for a long period of time.

One of his largest positions. Had some operational issues. But the bar was set incredibly low by the street. He has confidence in the management. They need to deliver on their promised production levels of 3000 barrels per day. The dividend at 12.4% has raised alarm bells in the street, but he believes it is sustainable. They have some debt. They have the drip program but the payout ratio is close to 100%.

12.5% dividend is rather high. Will struggle to maintain that dividend. Be cautious. Large dividend signals concern.

Very sustainable business plan. Have very good capital efficiencies and have access to capital. Debt to cash flow is in good shape. Very long life reserves. Likes this company a lot. 12.8% dividend yield.

Had an analysts’ meeting in April and reiterated their production guidance for the year. Likes that their expectations are extremely low. They said they would deliver 3000 barrels of oil this year, which they are on track for and we will be coming out with their results on August 9. All they have to do is deliver what they said they would which will give a very positive reaction to the stock. There was some question about the sustainability of the 13.3% yield but he thinks it is sustainable. They are ahead in cash flow.

Down 40% in the last 12 months. Expects management overpromised regarding their new Salts Flats acquisition in Texas. There were some operational issues and they replaced the chief operating officer and he hopes there is a turnaround there. Also, there was a debate on the decline rates on their Texas fields and some of them will decline 62% in the 1^st year. He thinks the market has overestimated the decline rates and thinks it will drop below 20% in 2014. 15.4% yield, which he doesn’t think will get cut. Have a good line of credit.

Being in Texas has some advantages in that you are close to market, which will help. Small producer and has sold off pretty hard. Key to being in Texas is getting Louisiana light sweet oil prices, which currently trades at about $12 more than WTI. Given their size and some of the problems they have had, he can’t recommend this name. 15% yield.

Chart shows this has taken quite a dip in the last while. Changes in management because of production mishaps. Need to look at these from both a production standpoint and a commodity standpoint. Have a constrained balance sheet and not a lot of room to raise CapX for growth. More linked to oil than to gas and he feels that in 2013, oil will average around $95 per barrel which will be very positive for them.