Market Outlook He thinks we have been in the worst bear market in the energy space ever. He has been accused of being too bullish, but when the Trump Administration lied about putting sanctions on Iran back last October the market changed direction. Next year he sees US shale growth rates decelerating as well results start to plateau and companies turn to lower quality rock. The growth rate has fallen from 1.9 million barrels per day of annual growth falling to only 600,000 barrels per day for US production. Offshore global supply is also peaking, he says. By 2021 the market could be incredibly tight. Energy stocks could go up 100%. He hopes an increase in oil prices would bring back investors. Companies should not be valued at 70% of their reserve values. He thinks companies should become buyers of their stock from free cash flow. Believe in the oil price on the screen today and you will see share prices move up.

They were trading at values lower than reserve values. They are initiating their first share buyback this year. One analyst has a $26 price target for them. They are a big natural gas producer, and we are heading into a colder than normal winter outlook. When you can buy a quality company at these levels, where management is investing heavily themselves and it trades at 3 times cash flow, you can't go wrong.

The spending outlook for drilling in 2020 is very poor. Companies can not justify spending more to just keep production flat, especially when the market will not give you credit for it. Companies should be putting free cash flow into share buybacks. It is negative for service companies. He wonders when this has been fully discounted in the share price. He is more tempted to buy a producer.

He thinks there is still good upside to come. The sector has put all the good companies in the same camp as the poor performers and dragged all down to the same reduced valuations. Arc is yielding 9.1% and trades at a 25% discount to their reserve valuation. Out to 2021 their spending drops to create a 10% free cash flow yield after paying the dividend. He still sees this as an opportunity.

Tax loss sell? He thinks tax loss selling may create a risk that you miss out on the gains. He would stay in the sector, don't move into cannabis or something else. He does not have a lot of confidence with this management team. He sees better alternatives.

Buy for Yield? He would not buy here. Although the dividend is juicy, he thinks oil producers will fair better. VET still commands a higher multiple than other plays, so he sees better choices out there.

The fundamentals of sand fracing has changed dramatically. The spending outlook for fracing is also looking very poor for next year. He would not take the risk.

Privatization possibility? He is not surprised privatizations have not happened already in the space. He suggests taking a tax loss and roll into a better oil producer. The demand for the small cap names is just too small right now.

A large holding for him and he is concerned about upcoming earnings. He sees it trading at 8-12% free cash flow next year based on his oil price outlook. They are doing share buybacks. They have 10 years of inventory in the US Bakken and you are only paying about half of historical valuation. He thinks this will be a company that reacts strongly when investors return to the space.

(A Top Pick Nov 16/18, Down 28%) Dirty oil is not getting funding in the US and their share price reflects this. They just added an acquisition in the Permian. He liked the management team change. They are able to grow 10-15% based on current oil pricing. He just prefers to buy in Canada where valuations are at a significant discount.

(A Top Pick Nov 16/18, Down 33%) The highest quality Permian producer name you can own. He sold it a while ago when they decided to repatriate all their energy investing back to Canada, where values are so discounted. There is talk of a frac ban in the US, which is creating uncertainty there.

He would recommend taking a tax loss on this and buying into his energy fund. His fund has fewer names and a larger average market cap. The ETF is passive -- he prefers active management.

Companies with challenged balance sheets (high debt in this case) face difficulty in banks continuing to finance growth. He would not own this one.

Cenovus or MEG? He likes MEG for the prospect of M&A. They have great tax pools and is deeply discounted. CVE provides exposure to heavy oil production and Alberta monetizing their rail position. He would prefer MEG, because of its relative valuation. Both have a good investment case.

Cenovus or MEG? He likes MEG for the prospect of M&A. They have great tax pools and is deeply discounted. CVE provides exposure to heavy oil production and Alberta monetizing their rail position. He would prefer MEG, because of its relative valuation. Both have a good investment case.