Martin Davies
Member since: Apr '13
Portfolio Manager at
Brickburn Asset Management

Latest Top Picks

(A Top Pick Nov 27/14. Down 15.16%.) (November 27 was exactly the time that the Saudis announced they were going to open the spigot.) He was thrilled to see that the Canadian Natural Royalty package is now in with the PrairieSky Royalty (PSK-T) assets. This is going to be a consolidation of the 2 best royalty packages in Canada. (See Top Picks.)
(A Top Pick Nov 27/14. Down 14.04%.) Does a lot of natural gas projects globally. Made a large acquisition to diversify into Latin America. It looks like it is going to be a good, long term investment. However, there was a sharp drop off of CapX globally and this company’s backlog came off sharply in the quarter. He trimmed his position a little.
(A Top Pick Nov 27/14. Down 41.99%.) This has been disappointing. Was surprised at the amount of commodity-based sensitivity and activity based sensitivity that the company had. Also, when the differentials are very wide, there is a lot of use of their type of assets, but when differentials on heavy and light crudes are very narrow, it means that they have less so. He is going through his numbers and may change his opinion on this company.
Except for one small acquisition, they have drilled and found everything they have done, from zero to $5 billion in market cap. Just went through 100,000 BOE’s a day, a huge milestone. They did this by doing one of the most incredible jobs of crushingly low operating costs and incredible capital efficiencies. Concentrated in natural gas and trading at very low levels, and are profitable at these levels. They are now taking countercyclical behaviour and are drilling quite aggressively for natural gas, in this environment. Operating costs are less than $5 BOE, which is remarkable.
It is very rare that you get a brand-new, almost another energy class, of shares to buy, and this is it. A royalty company does not pay drilling, operating or abandonment costs. Companies farm on royalty lands and the royalty owner gets a cheque off the top. Operating costs are less than $5 BOE, which is remarkable. This has a very, very long-term lifespan.