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Oil/gas. He is seeing a move into the cyclicals, in particular into oil and gas names. Rotation happened in some of the large cap names first and as valuation multiples expanded, it tended to trickle down into some of the smaller names. Stocks were so oversold earlier this year that it was bound to happen at some point. Also, there is more enthusiasm that Europe is going to sort their problems out and the US Fed is willing to step in and support the recovery process of quantitative easing, which is good for commodity stocks in general. He was holding about 10% in cash and is now taking it down to get in this rally.

Oil. Oil price is not supported by the fundamentals of demand. It is more driven by geopolitics and the fear of supply disruptions, which is not a particularly healthy spot for the market to be in. If peace breaks out in the Middle East, we are in for some risks on the oil quote. If oil can hang out in this $100-$105 range, a lot of the oil companies can continue to put up good production per share growth and generate value for shareholders.

A big lumbering company that struggles to replace production every year. However, some of the things they are doing in terms of enhanced oil recovery are going to benefit them down the road but at the same time he thinks the company is struggling with a debt level that is higher than he likes, at about 3.5X cash flow. Also, believes they have an internal mandate to sell assets to the tune of $1.5 billion, which he thinks has a lot to do with fixing up the balance sheet.

His opinion on this company has changed to the positive. Will do a good job of working themselves out of the penalty box. Last year, finding costs were terrible. Had trouble meeting production numbers. Debt levels are a little bit high but some of their drilling results are going to impress the market. This is on his short list of stocks that he is looking at.

Holds this management out consistently as excellent capital allocators in Calgary. Have a very lengthy record of creating value for shareholders. They raise capital judiciously. The holy grail of increasing production per share, while at the same time paying a consistent and growing dividend stream.

Has been for sale for quite a while. The strategic alternative process was dragging on. Was announced late in 2011. It became apparent that the list of potential suitors was not lined up to Buy in Spite of it being light oil in SW Saskatchewan. Ultimately they are ending up merging with Guide Exploration (GO-T). Thinks there is still some horse trading of assets to come.

Would place management team in the absolute top quartile of Calgary companies. About 60% gas and have struggled with the challenging gas environment. Market has traded the stock as though the dividend is at risk but management has indicated they are doing a number of other things before they would consider trimming the dividend. Recently did a strategic acquisition of some assets from Fairborne (FEL-T) and at the same time they raised about $345 million of equity, which should shore up the balance sheet and put the company in a stronger position.

(Owns their convertible debentures.) Some pretty good strategic potential as a takeout at some point down the road. Have substantially completed the McKay project and did it on time and pretty close to budget. Well-positioned for growth and cash flow over the next year or two as they wrap up that construction project. There is a little bit of risk if oil pulled back to $70 or so for a company like this.

Just announced a $25 million financing. Was in a pretty strong financial position before this. Had expected them to exit 2012 with a net debt of about $30 million on a credit facility of about $50 million. Raising equity at this point allows them to accelerate their program. He is particularly excited about their Cardium position at Lockend. They’ve exceeded their type curve wells (?) and there is some additional upside down the road from a new Dunvegan oil play. Good potential from here.

(A Top Pick Oct 13/11. Down 20.64%.) Thinks this was the best performing stock in the index in 2011. Sold his holdings in early 2012. Company is over half levered towards natural gas. When the stock collapsed, he bought it back.

(A Top Pick Oct 13/11. Down 21.38%.) Light oil weighted producer. Company has a pretty strong balance sheet. 8.77% yield. Still likes.

(A Top Pick Oct 13/11. Up 9.3%.) This was acquired by Crescent Point (CPG-T).

Feels the 6.37% yield is sustainable. As well, has about 60% participation in its dividend reinvestment. Also, have a program of hedging out production for up to 3 years so feels the company has locked in some of the economics of their Saskatchewan oil plays. Recently financed over $600 million of equities and feels debt to cash flow on a one-time multiple is a very prudent level.

This is one of his top international ideas. Generates significant free cash flow. Producing about 25,000 barrels a day from onshore and offshore assets in Thailand. It is really the offshore development that has driven the tremendous amount of growth. Considerable exploration upside from here.

In the small cap space, this one really stands out in terms of low geological risks. Stands out for him as a top decile production growth story.