Eric Nuttall

He's never seen such a divergence between the narrative of oil and reality (the fundamentals). Ignore price for a moment, and just look at the setup. Global inventories have built so far this year by about 7M barrels per day, whereas typically they'd build by 80M. Inventories are telling you that the health of the oil market remains strong. 

When you look at real-time demand, such as that from China and India, it's making new records. Refiners are all pointing to very strong demand, both in the US and globally. We're weeks away from seeing the impact of the voluntary cut from OPEC. 

The fear of a recession is clouding people's ability to see what's coming on very soon. This summer, we should experience the sharpest drawdown of inventories in history. We have a seasonal uptick in demand, China demand normalization, the OPEC cut, and Russian production finally rolling over.

You can believe in a recession, but he still expects to see this year a 5-10 year low in inventory levels. We need a jolt to make people see that the physical market is tight and about to get meaningfully tighter. That catalyst should be inventory draws and should start in the next several weeks.

Generates decent variable income. Cash yield next year should be 12% with $80 oil, 16% if oil is $100. It's fine, but if you're an oil bull the way he is, this name doesn't fit the thesis.

If you're income-oriented, other than a couple of small caps in Canada, US names are better geared for that. So he owns companies with higher dividends and writes call on them. US names are trading at a material premium to Canada. 

His positioning now is 92% focused on Canada in his main fund. The only names he wants are Canadian heavy oil, as we're getting a decades-worth of free cashflow and deeply discounted, but the differential could really narrow, Trans Mountain expansion adding capacity. Much longer inventory depth than US peers, and much lower decline rates. This means that US names need to spend more money than Canadian names to sustain production. For capital appreciation, focus on this theme.

He's been adding on dips. Aggressive last year buying assets. Need to de-lever debt. Exposed to most economic plays in Canada. Catalyst-light compared to other names. Value proposition is still very good. Meaningful leverage to the price of oil. Still lots of upside, depending on the oil price.

Don't buy now if you're looking for capital appreciation. It's discounting nat gas price meaningfully higher than current price, as it should because current price is not sustainable. Nat gas inventories are high and supply will grow this year. LNG capacity buildout is a catalyst for 2024/25, not for now. 

Incredibly well run, great assets. He'd take a look around $45.

Never bet against this management. Massive inventory depth, exposure to Canadian heavy oil, longer-term natural gas optionality. Should hit final debt target at end of this year, and announced shareholders will then get 100% of free cashflow. Super solid. Incredibly strong balance sheet. Yield is 5%.

Cheap valuation, high free cashflow, aggressively buying back stock. Downside is inventory depth, but recent acquisition and drilling have rectified this. Can see the allure of this name much more than 3-4 months ago.

Likes it. Encouraging. Warren Buffett, one of the shrewdest, most patient investors of all time, is stepping up in the face of widespread negative sentiment. The most uncomfortable buys are usually the best ones. Don't chase the herd and buy NVDA. Be patient and tune out the noise.

His thesis is that it's the meaningful return of capital that will drive the rerating of share price. Ranger acquisition was 19% free cashflow per share accretive. Deal will close in 3 weeks, and they'll initiate modest dividend and start buying back stock. Deep value due to Ranger being misunderstood and backed by private equity.

He keeps adding. Meaningful upside. Multi-bagger potential, but you have to get past the overhang.

Should meet final debt target by end of this year. After that, has committed 100% of free cashflow to shareholders and buying back stock. Remains incredibly bullish on it, more than a double from here.

He sold. He's negative on natural gas. He just wants to own Canadian heavy oil. Valuation remains compelling. Great quality assets. Attractive on free cashflow and buybacks. He could be back in some day.

If you're willing to endure another year of miserable natural gas prices, it should be fine. He'd prefer to pay the premium for TOU and get the inventory depth, especially if you're sitting on a tax loss.

Up until a year ago, one of the strongest predictors of price of oil had been inventories. As inventories went up, price went down, and vice versa.

This broke down around June 2022, when the fear of an ultra-hawkish Fed took hold and recessionary talk took off. People started to use oil as a financial instrument to express a negative view on the economy. Sentiment is very poor, yet fundamentals appear to be strong.

Global inventories have built only modestly this year, as opposed to usual. Heavy drawdowns will send a price signal to the market. If oil continues to sell off for the next couple of days, he could see OPEC cutting again, but it's tough to call. His base case is there will be no cut, as previous cut is only just now taking effect, and they'll let recessionary fears play out.

A solid pick over some of the other Canadian royalty names. He wants more risk now, as that's where the opportunities are. He wants names that have sold off aggressively, with a good dividend and a bias to grow that. He wants more leverage to a more bullish oil price. See his Top Picks.

No buy thesis. Hodge-podge of assets. Second-warmest winter in Europe, plus greedy Irish government imposed 75% windfall tax on them. Paying down debt, returning modest amount of capital to shareholders. Cheap, but quality of assets not good. He'd rather pay a premium for a name that has a catalyst.