TOP PICK
Recently raised $250 million to shore up its balance sheet. Dominant player in the Montney greater Dawson area. Cut distributions a number of times over the last 4 or 5 months. There is probably a good base of distributions.
TOP PICK
Dominant player in the unconventional gas area. Has a good footprint in the Canadian oil sands. Low steam/oil ratios expected. Relatively low operating costs.
TOP PICK
Cut distributions recently by about 80% so this should position it very well to take advantage of a doubling of oil prices this year.
PAST TOP PICK
(A Top Pick Jan 29/08. Up 3.6%.) Dominant player in the light oil Bakken Bock and play in south-east Saskatchewan. Management feels they can maintain distribution at these prices. Active hedgers. Relatively low debt to cash flow.
PAST TOP PICK
(A Top Pick Jan 29/08. Down 21.8%.) Very well run. Most of its assets and production are offshore and will come in tax-free. Great core holding in the portfolio. A Buy right now.
PAST TOP PICK
(A Top Pick Jan 29/08. Down 12.6%.) Will probably see a relatively stable level of distributions. Assuming there is an improvement in the capital/credit markets; you could see a take-out at a 25%-30% premium.
COMMENT
CONTANGO: Refers to what is happening to the future strip. Each month in the futures market has its own contract and CONTANGO is when future months have a higher price than nearer months and there are expectations that the longer-term price trend is going to be higher. E.G. when there is a December futures contract price oil at $60, the probability is that prices are going to be higher.
COMMENT
Oil: Oil price collapse was because of Saudis in 2006 and 2007. Believed a forecast there was going to be the largest increase in OPEC production in history, so cut production significantly. No increase or change in consumption so created a shortage and drove prices up in 07. Followed by a cold winter creating higher demand. Chinese went on a buying spree. Saudis increased production in mid-07 that caused a price collapse. Now cut twice as much production as they had before, which should create a shortage later this year. Looking for a doubling in oil prices this year.
COMMENT
Natural Gas: Production has peaked but new technology in the gas shales is creating some surplus. Thinks there will be a gas shortage in 8 to 15 months.
COMMENT
Hubbert Peak Oil Theory: World oil production would be peaking at about this time. He sees nothing to change this view.
HOLD
Mid-tier average quality name. Cut distributions earlier this year. Fairly good shape and provides a pretty good up front yield. Have a very strong partnership with ManuLife (MFC-T) for me king acquisitions. 17% yield.
COMMENT
Zinc processor. Yield of about 22% and he is currently assessing this.
COMMENT
Historically viewed as a defensive stock. As being a bit more growth oriented recently. Expanding organically through the Keystone Pipeline. May eventually see the McKenzie Valley pipeline being built. Just increased dividends.
COMMENT
For years it has been a “show me” story. Company continues to be transitioning under new management. Trying to become an unconventional gas play.
DON'T BUY
Think they are going to have headwinds on both short-term and long-term aspects. Recently raised some money but not all that issue has he sold. Very few institutions participated. Struggling to replace production. Distributions are too high.