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(A Top Pick June 12, 2017. Down 33.70%). This has been a nasty market. The TSX energy index is down 10% year to date and the big international investors are hiding in the CNQ’s and the Suncors. The natural gas stocks have been devastated. Birchcliff is very cheap. It’s book value at the end of 2017 was $6.30. It trades today at $3.87. They are 79% natural gas, 21% liquids. In 2014, this stock traded at 2.2x book value, so it should trade at $13 to $14 in a bull market. His target for a year from now is $9. It also pays a 10 cent dividend, for about a 3% yield. The negativity around this stock is about takeaway capacity, which has been very tight, but capacity has been rising significantly, especially for liquids. As companies shift focus, their total production doesn’t increase but their proportion of liquids increases as the payoff and prospects for these has improved.

Solid. Always liked it. $16 target. Hold on, but be ready to pull the trigger.

(A Top Pick June 12, 2017. Down 9.98%). This has a great balance sheet and a high dividend. The debt is $246 million against $776 million equity. Book value is $3.33 compared to the price on the day of the interview of $1.95. The company traded at 1.7x book value in 2014 so it could be a $5 or $6 stock. His target for Surge for 2018 is $3.70 with a yield of about 5%. In this market, a good price for this company is $1.90 and a price of $1.80 would be excellent.

(A Top Pick June 12, 2017. Down 48.76%). This is a driller. Oil service stocks are always more volatile. The drillers are all cheap now. This is on his Action Alert buy list. The company’s book value is $4.19. He has a $2.50 one-year target. This stock traded at $11 in 2014. In bull markets these stocks have a high beta. Western doesn’t have a debt problem. It owes $265 debt compared to $386 in equity. This is lower than Calfrac and Precision. Western’s biggest lender is AIMCO, which knows the oil industry well. AIMCO is also an investor in Western.

This company is well managed. It is a low cost operator. Its price has come down enormously. Its dividend has been cut, but it offers a 72 cent dividend on a price (on day of interview) of $10.78. The company’s problem is its debt load, which has been rising. It is now $1.285 billion, up from $1.07, against $1.72 billion in equity. It is not good to have rising debt in a declining commodity market. Book value is $10.44. If he is right that oil prices will come down, the stock could go down significantly further, past $8 or beyond. At $8, the yield would be fabulous. He doesn’t cover the name because of the balance sheet issues.

He does not cover it yet. He’s starting to like the company and thinks their story makes a lot of sense. He thinks the downside is 10 to 20 cents and it could rise to $2 (from $1.38 on day of interview) if it came back to its 2016 high.

This has been in the news over the last week because a disgruntled shareholder group wants it to do different things. This is the old Penn-West, which was $36 in 2008 and is now $1.33. The company announced that they are putting assets up for sale and looking at otherwise to maximize shareholder value. Their long-term debt at the end of 2017 was 328 million, equity is $2.17 billion with a book value of $4.29. They have a Cardium asset play, which people like. The company is cheap, but there are lots of cheap energy stocks. Do you want to own this particular one? They could potentially be a $4 or $5 stock in the next cycle.

Has a $52 target and has added to his holdings recently. It's solid on an ongoing basis. Likes how they've diversified across North America. Solid dividend payer.

He covers Crescent Point but it is not yet on his buy list because he is looking for lower prices in Q2. The stock trades at half of book value with a strong dividend. The company traded over book value in every year from 2009 to 2017. The high water mark in 2017 was twice book value. Book is $16.75 (compared to a price on day of interview of $8.46), so the stock could easily double. If he is right about weakness in Q2, the stock could drop to $7. The price is leveraged to the price of oil. The balance sheet is good: debt is not a problem. Long term debt is $4 billion versus $9.2 billion equity. The company did deals when the market wasn’t expecting it and volume has not increased much, so there has been investor unhappiness. He thinks people have thrown the stock away and has a $16 1-year stock target.

He thinks pipeline capacity is increasing, which will be good for energy services companies. ESN is the largest coil tubing operator in Canada. It has $18 million debt versus $160 million of equity. Book value is $1.13, compared to a price of $0.52 on the day of interview, so the price is half of book. In turns of upside, it traded at 1.2x book during 2014, so in the next cycle, this company could trade for $1.20 to 1.30. His one-year target is $1.20.

When is the uranium price going to turn around? It comes down to global supply-and-demand. Wait for a positive break on the upside on CCO. If you hold it, keep holding it.

He added it to his coverage list last month and he assigns it a $0.72 one year target (price on day of interview was $0.37). They can produce about 5 times what they are producing now and they can produce about 50% liquids so they are well positioned. They are in the sweet spot of the Montney and will increase production significantly when Tidewater’s plant comes on in Q2 of 2019. This is not yet on his buy list, but he expects to add it in Q2.

Everybody loves this stock. They produce about 10% of Canada’s total production. This is one of the best performing names in the industry. Management will probably see $2 to $3 billion of free cash flow this year, which they can use to pay down debt and buy back shares or pay dividends. He sees this as a core holding in the large cap portion of a portfolio.

This company is 74% natural gas. Book value is $15.67, cash flow last year was $1.12. Current stock price is $1.47 so the company is trading just over 1x cash flow, which he sees as shockingly cheap. This was a $50 stock in 2014. Debt is $397 million against $774 million equity. In 2009, this stock went from $2.40 to $23 a year later. So when a bull market comes, this stock can rocket upward. His one-year price target for this stock is $7. He owns it personally and his family owns it. (Analysts’ price target is 1.75$)

Book value is $6.01 with a cash flow last year of $1.18. In 2016, this stock went from $0.90 to $5.44 in the same year. In 2014, the stock traded at $14.98. His one-year target is $7. The stock has a 4-cent dividend, for a 3.4% yield. (Analysts’ price target is 1.99$)