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Market has loved to hate this stock. The assets that management brought together were assets that they all knew when they were at the Provident Energy arena. What has been missing is confidence by the market in their ability to pay the dividend, which they have indicated they will continue to pay. Also reducing debt is a big knock against the company. They will be selling some non-core assets to bring the debt down. Yield of 13.99%.
Recently acquired Sure Energy, which is a great acquisition. Very confident operators. What really lies in front of them is the Viking opportunity and the Cardium opportunity. They have something like almost 400 locations on these 2 assets. Trades at a discount to its peers, which is not justified.
Oil. Canadian oil has suffered a big discount to WTI and global prices looking back 12-18 months ago. There were transportation issues and we just simply couldn’t get our crude to market. The big terminus Cushing was overloaded with inventory, which caused the price to decline precipitously in Canada. That scared a lot of investors away, particularly foreign ones. Discrepancy has been corrected and feels we have smoother waters ahead in Canadian oil and natural gas prices.
Market has known this one as a highly gassed levered enterprise. They are making moves to diversify their asset base into some more oily things. The greatest thing they have going for them is the sponsorship of the Rydal family. Stock is going to be hard-pressed for a little while because of some debt issues. You want to see how they are going to deal with maturing debts in 2015 before jumping in.
This is one of the recent conversions to the dividend model and they had the sponsorship of some big investors, which did them well. Made a huge acquisition that just added to their great inventory of plays. Management has a great record of exploitation, which he thinks will continue. You’ll have to be patient with this and just enjoy the yield while you have it.
A long-standing favourite of his due to their heavy oil exposure. Good management and likes the plays they have in both Alberta and Saskatchewan. Have some tremendous assets and intend to do some more PAD drilling. He has recently added to his holdings. Moving through this winter’s drilling season, he expects it will play catch-up. He could see it reaching at least $0.75.
He is neutral to negative on this story. Management is doing a good job but the problem is, it is going to take a long time to sort through the big pile of assets that they have. He just doesn’t see that there is going to be a catalytic event to spark the stock to move upwards. 2.2% dividend yield.
Market is sceptical of their ability to sustain the 12.4% distribution. He believes the dividend will be sustained. This is a trust that has US assets. Tax treatment would be different if this held Canadian assets. Sufficient upside in their properties to sustain production for a long period of time.
One of the companies that has been successful in attracting joint venture capital. Feels that a $10 price target is real and that production growth is going to continue at a rapid pace. You’ll probably see a little more in terms of natural gas production growth side, but liquid natural gas is a good thing to have.
(A Top Pick Aug 1/13. Up 31.38%.) Just made a huge acquisition of some lighter oil assets and financed it themselves. This has one of the most sustainable dividend models of all the companies he follows. Believes they have more than sufficient cash flow to cover the dividends. Still feels the stock has a long ways to go.
Has been known for its natural gas business, which is about 60% of production volumes. Low-cost operator. Terribly undervalued. Real story is their development of the Cardium light oil play where they could hold their production flat at about 8500 BOE’s for a long time. Thinks they will throw a bunch of capital at Edson because it is such a great opportunity. Screaming buy at current price and as it approaches $5, he’ll have to look at it then.