Latest Expert Opinions

Signal
Opinion
Expert
BUY
BUY
July 30, 2013

Finally getting some recognition from the street in terms of some of the positives of underlying fundamentals. Has been a victim of very wet weather. 2 years ago they missed guidance and had to spend a bit more which has been an overhang on the stock, even though they’ve been executing. Beat their 2012 guidance and he thinks this year is going to be very strong. Have a suite of very, very good assets. Turner Valley is working out much better than people had given them credit for. In their most recent wells, they drilled 3 with certain tweaks by changing their drilling fluid. Also shot 3-D seismic allowing them to stay in the zone much, much longer. Have also unlocked a good play in Midal with paybacks in less than a year and a half. Exposed to over 300 million barrels of light oil. Have an inventory of 15 years.

Finally getting some recognition from the street in terms of some of the positives of underlying fundamentals. Has been a victim of very wet weather. 2 years ago they missed guidance and had to spend a bit more which has been an overhang on the stock, even though they’ve been executing. Beat their 2012 guidance and he thinks this year is going to be very strong. Have a suite of very, very good assets. Turner Valley is working out much better than people had given them credit for. In their most recent wells, they drilled 3 with certain tweaks by changing their drilling fluid. Also shot 3-D seismic allowing them to stay in the zone much, much longer. Have also unlocked a good play in Midal with paybacks in less than a year and a half. Exposed to over 300 million barrels of light oil. Have an inventory of 15 years.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$6.020
Owned
Yes
HOLD
HOLD
July 30, 2013

Cut the dividend because of balance sheet pressures. Made, what they thought was an attractive acquisition, from Penn West Petroleum (PWT-T) but it turned of the true cost was higher than what they had believed. As a result, net debt was about $54 million higher than what they had told everybody. Company is looking at strategic alternatives. There are rumblings that somebody may acquire it.

Cut the dividend because of balance sheet pressures. Made, what they thought was an attractive acquisition, from Penn West Petroleum (PWT-T) but it turned of the true cost was higher than what they had believed. As a result, net debt was about $54 million higher than what they had told everybody. Company is looking at strategic alternatives. There are rumblings that somebody may acquire it.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$1.180
Owned
Yes
COMMENT
COMMENT
July 30, 2013

Service sector is very hot right now. There are 2 key plays that are highly service intensive, Montney and Duvernay which is bringing brand-new capital and is translating into very strong demand for both drillers and fracers. In Canada there are 3 fracers, Trican (TCW-T), Canyon (FRC-T) and this one. This one benefits from very strong relationships with Petronas (?), so it is expected they will be able to announce a contract in the coming weeks as they wrap up activity. Reporting tonight and it is expected it will be poor quarter because of wet conditions in Q2 but their forward looking guidance is going to be very strong, which should be a catalyst for the entire fracing space.

Service sector is very hot right now. There are 2 key plays that are highly service intensive, Montney and Duvernay which is bringing brand-new capital and is translating into very strong demand for both drillers and fracers. In Canada there are 3 fracers, Trican (TCW-T), Canyon (FRC-T) and this one. This one benefits from very strong relationships with Petronas (?), so it is expected they will be able to announce a contract in the coming weeks as they wrap up activity. Reporting tonight and it is expected it will be poor quarter because of wet conditions in Q2 but their forward looking guidance is going to be very strong, which should be a catalyst for the entire fracing space.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$32.050
Owned
Yes
WATCH
WATCH
July 30, 2013

There is uncertainty about one of their properties, Primrose, which has 2 leaks and is releasing bitumen. This company had this problem in 2009 and were ordered to stop steaming. Short-term guidance from this company is that there are no changes. Have stopped steaming but still have production. The concern is the impact for 2014. Has a proved reserve value of around $27, which would be his absolute worst scenario. If it ever approached that level, he’d be a very active acquirer.

There is uncertainty about one of their properties, Primrose, which has 2 leaks and is releasing bitumen. This company had this problem in 2009 and were ordered to stop steaming. Short-term guidance from this company is that there are no changes. Have stopped steaming but still have production. The concern is the impact for 2014. Has a proved reserve value of around $27, which would be his absolute worst scenario. If it ever approached that level, he’d be a very active acquirer.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$31.660
Owned
Yes
HOLD
HOLD
July 30, 2013

One of the best run junior light oil companies in Canada. Has never owned because it has always been expensive but has always been able to maintain a premium multiple. Trading at around 6.5X on a forward basis.

One of the best run junior light oil companies in Canada. Has never owned because it has always been expensive but has always been able to maintain a premium multiple. Trading at around 6.5X on a forward basis.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$4.680
Owned
No
PAST TOP PICK
PAST TOP PICK
July 30, 2013

(A Top Pick September 19/12. Down 26.85%.) Still regarded as a potential takeout target for companies that are building very large LNG terminals. The actual requirement of these companies versus what they already have is increasingly coming into question. The market is very much awash in assets for sale. He would rate this company’s assets as quite good.

(A Top Pick September 19/12. Down 26.85%.) Still regarded as a potential takeout target for companies that are building very large LNG terminals. The actual requirement of these companies versus what they already have is increasingly coming into question. The market is very much awash in assets for sale. He would rate this company’s assets as quite good.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$7.440
Owned
Yes
PAST TOP PICK
PAST TOP PICK
July 30, 2013

(A Top Pick September 19/12. Up 53.27%.) Trading at 6 times and could approach $13. 5.7% dividend yield.

(A Top Pick September 19/12. Up 53.27%.) Trading at 6 times and could approach $13. 5.7% dividend yield.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$11.070
Owned
Yes