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Market. He thinks the energy market is about as bad as it can get. Differentials are at multi-year lows. Canada needs rail or something to get things moving. The BP refinery in the US Midwest will be back online next month. There are talks of two unit train projects being developed – putting 120,000 bpd on rail. There are discussions underway on Enbridge to deal with over-nominations and using drag reducers that can add 50,000 bpd of capacity. Line 3 and other projects are advancing. At today’s pricing levels, there are still 56% margins in the energy sector and stocks are trading at 3.7 times cash flow (half of historical levels). He is trying to convince oil executives to dial back capital outlays and buy back shares instead.

It has held at very good levels due to its international diversification. He likes the Spartan acquisition and thinks it was done at a very good valuation. This stick offers a lower beta and good dividend – a good stock to hold, but not the torque he is looking for.

This holds the type of exposure to oil he likes best as he is very bullish on oil prices going forward. With the Canadian energy sector at the point that everyone hates it, now is the time to buy. They are going to monetize their midstream assets that are high in demand, which will allow them to pay down almost all their debt. If you run an $80 WTI price, he sees this trading in the mid-$4 range.

He has strong reason to believe a go decision will be made for an LNG project – likely in late-October. There are on the ground plans in Kitimat for festivities. ARX-T has good liquids exposure as well. He would prefer Tourmaline.

This coil tubing and pressure pumping company with assets in the US has exposure in the Permian, which is temporarily slowing as infrastructure becomes constrained. In Canada, the market remains even weaker for service companies and there are rumours one of the big players is offering service rates at a 30% discount. The challenge for STEP-T it that their margins may be under pressure. He would not own this name right now.

It is a fine company, he says, but would prefer to back other management teams who are doing a better job paying down debt. He is bullish heavy oil differentials for next year, so is targeting other companies.

This would be a conservative choice with 50% light oil exposure. He thinks there are companies with more leverage – like Cenovus. CNQ-T is a fine company and they are buying back stock.

This is a fine company, he says. There remains funds flow out of this sector and this is hurting the large caps like this one.

If you are bullish oil, you may want to look for others companies rather than waiting for the conversion to Vermilion. He would favour other names, like Baytex.

The dividend is safe in his mind. The dividend costs the company about $50 million per year and the company has $160 million in cash. Not an exciting company, but a safe income, he thinks. Yield 8%.

He sees tangible book value around $2.50 per share. Given the balance sheet of other potential suitors, he may not see many others beyond Ensign willing to bid for the company.

He does not believe the company will increase the dividend and does not see any huge upside, after meeting the new CEO. Some much of the strategy revolves around asset divestiture, which could take two years.

The debt is simply too high for him. There are no buyers for this small cap stock. If you hold this, think about taking a tax loss.

A good mid-cap name. He likes the upside on their Viking assets. They are generating good cash flow, buying back shares, paying down debt. He is looking for even more torque – heavy oil centric companies in particular.

A mico-cap that had some major issues. He would not look at this at all.