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Natural Gas. Had a nice rally from its $1.80 lows in early spring. Almost doubled in price to about $3.50-$3.60 MCF. Thinks this trend will continue and has a good chance of being between $4 and $5 as we exit the winter in March 2013. Starting to see hedging now from companies that are starting to layer on some hedges as a forward curve. As hedges are in, production will come back to a lesser extent than where we were a couple of years ago for 2 reasons. 1.) A lot of the major natural gas producers are focusing more on liquids and oil. 2.) 2 or 3 years ago there was a big rush to drill natural gas in the US that was financed by zero cost of capital joint venture money offshore so it was really drilling uneconomically. They were drilling their best properties. When they go back to drilling these pools over the next few years, they’ll be going back into their B properties.

As much as they want to keep the dividend high, he feels they should probably cut it a bit to make the business more sustainable. Stocks typically act negative when there is a dividend cut. If you’re looking for a stable dividend in an oil play in Canada, he would prefer a Crescent Point (CPG-T) or a Baytex (BTE-T) where there is a lower likelihood of a dividend cut over the next couple of years. They are in the process of selling some assets which will help the pressure on their balance sheet. Have a little more debt than he likes but this is probably priced into the stock.

If you are buying at this level, you are looking for the deal to go through and get your $22 and hoping to get it in the next 30-60 days. Nice short-term upside if the deal goes through. If the deal does not go through, he thinks this will trade in the $14-$15 range. There is potential that if this deal gets nixed a new buyer may emerge in the next 12 months. Very tough to speculate.

Heavy oil producer. Heavy oil is priced differently from WTI. WTI is at $85 and heavy oil is priced on a differential basis from that. Thinks these differentials will probably stay wide over the next month or so, which should present a buying opportunity. 5.8% yield.

Gives a nice income stream. Typically been known as an oil pipeline. Did an acquisition earlier this year of Provident Energy which is more on the natural gas liquid extraction business. As the deep basin producers produce their natural gas, there is a lot of liquids in that stream.

At this level you have about $3.50 upside or $3 downside if the deal doesn’t go through. Very tough call. Would probably be aggressively buying it today if it was around $14. He probably would be more biased to the upside that the deal goes through but as each week goes on will be getting more information and better decisions can be made.

Has been a big disappointment for most Canadian oil investors. Last year they were caught up in a lot of difficult weather situations in Saskatchewan which delayed production. At this point it is a “show me” story. He just nibbled at this last week at around the $7 level.

(A Top Pick Sept 12/11. Up 88%.) This was acquired.

(A Top Pick Sept 12/11. Up 7.16%.) Thinks it has one of the best land positions in the deep basin. Still producing some very prolific Montney oil wells. Expects to see some continued success drilling over the next couple of months. Still a Buy.

(A Top Pick Sept 12/11. Up 20.5%.) This was acquired.

Production stream is about 60% gas and 40% liquids or oil but is viewed as a gas stock. Have an interesting play in north-eastern British Columbia in the Inga area. Getting great results. Early in the play. Production numbers are just below 3000 barrels a day and management thinks they will exit around 4000. The most valuable liquid stream coming out of natural gas is condensate which is what they use in the oil sands. It enables bitumen to run through a pipeline. Very valuable right now.

Tied to his expectations of higher natural gas prices. At $3, $4, $5 natural gas prices, this play works a lot better. Has been a lot of insider buying throughout this year.

This company can survive in a $2 natural gas environment. Management has done a great job in creating shareholder value. Have great operational focus. Low-cost producer. Expects them to potentially double production from now to early 2015. Great growth story.

Markets. He is holding his powder dry to a certain extent. He is doing covered calls on broadly based indexes. Romney has a 50/50 chance which is good for keystone and Canadian oils. He is not aggressive and basically holding pat. His covered calls are a hedge. He has been looking for an opportunity to buy into base metals in China but not quite ready yet. He will be looking at it carefully. He likes to be second or third in. There are far too many ETFs out there anyways and it is a healthy sign when some of them fold up.

Generate $12K per year on covered call strategy. Stock could be too high or too low to write a covered call, but he would advise a $200K portfolio for this strategy.