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Today, Eric Nuttall commented about whether CVE-T, NVA-T, MEG-T, PXT-T, VET-T, OVV-T, ARX-T, NVA-T, TOU-T, TOU-T, TCW-T, MEG-T, CPG-T, BTE-T, SU-T, SU-T, CNQ-T, XEG-T, ERF-T, TOG-T, MEG-T, HSE-T, ATH-T are stocks to buy or sell.

COMMENT

Market Outlook(A Commentary)

03/04/2020
A Comment -- General Comments From an Expert
Market Outlook It is important to differentiate the short term and long term outlooks (post-2021). There is demand deferral accounting for about 26 million barrels per day, being associated to the number of COVID cases worldwide. The outlook for oil is positive going forward as we were already expecting global production to be slowing in growth and for US shale production already being mortally wounded with low oil prices. Shut-ins will begin to counteract the volumes increased by Saudi Arabia if new OPEC agreements are not worked out. At these prices, every oil company (outside OPEC) would be bankrupt -- so we know these prices are not sustainable. Companies with good hedging strategies and sound balance sheets will emerge from this. A price of $20 into 2021 could be catastrophic for some small cap producers, due to their outstanding debt.
Unknown
Eric Nuttall
N/A
Unknown
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COMMENT

Athabasca Oil Sands Corp(ATH-T)

03/04/2020
Athabasca Oil Sands Corp

ATH vs HSE vs MEG? The clear stand out is MEG, who is 55% hedged at $59 oil prices. ATH has a high cost project with Hangingstone and is burning cash, although they have enough liquidity for the next 9 months. He would never own HSE, because of their ESG issues. All bets are off for all of them if $25 oil prices remain in 2021.

oil / gas
Eric Nuttall
$0.145
Unknown
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COMMENT

Husky Energy(HSE-T)

03/04/2020
Husky Energy

ATH vs HSE vs MEG? The clear stand out is MEG, who is 55% hedged at $59 oil prices. ATH has a high cost project with Hangingstone and is burning cash, although they have enough liquidity for the next 9 months. He would never own HSE, because of their ESG issues. All bets are off for all of them if $25 oil prices remain in 2021.

oil / gas
Eric Nuttall
$4.010
Unknown
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COMMENT

MEG Energy Corp(MEG-T)

03/04/2020
MEG Energy Corp

ATH vs HSE vs MEG? The clear stand out is MEG, who is 55% hedged at $59 oil prices. ATH has a high cost project with Hangingstone and is burning cash, although they have enough liquidity for the next 9 months. He would never own HSE, because of their ESG issues. All bets are off for all of them if $25 oil prices remain in 2021.

oil / gas
Eric Nuttall
$2.100
Unknown
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DON'T BUY

Torc Oil & Gas Ltd(TOG-T)

03/04/2020
Torc Oil & Gas Ltd
A high quality asset base and good success in conventional wells. Management meets and beats guidance. CPP owns about 30% of their shares. They do not have a very good hedge book unfortunately. This keeps him on the sidelines for now.
oil / gas
Eric Nuttall
$0.880
No
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HOLD

Enerplus Corp(ERF-T)

03/04/2020
Enerplus Corp
It is astounding how good quality companies with good hedge books, like ERF, have fallen like all the other energy companies. They have about half of their production hedged for this year. They have 20% hedged at $57 and another 22% priced at $11 premium to spot prices. He sees meaningful upside once we pass the worst of the COVID influence.
oil / gas
Eric Nuttall
$2.450
Unknown
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COMMENT

iShares S&P/TSX Capped Energy Index ETF(XEG-T)

03/04/2020
iShares S&P/TSX Capped Energy Index ETF

The composition of this ETF has become highly concentrated. Five names account for 78% of its value. CNQ and SU account for most it. Both of those names have rallied well compared to their peers as buyers in the US have been stepping in. However, their hedge books are naked to oil prices right now. He would prefer to own small cap names with good hedge books, if you select the right ones he thinks.

E.T.F.'s
Eric Nuttall
$4.160
Unknown
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COMMENT

Canadian Natural Rsrcs(CNQ-T)

03/04/2020
Canadian Natural Rsrcs

The composition of this ETF has become highly concentrated. Five names account for 78% of its value. CNQ and SU account for most it. Both of those names have rallied well compared to their peers as buyers in the US have been stepping in. However, their hedge books are naked to oil prices right now. He would prefer to own small cap names with good hedge books, if you select the right ones he thinks.

oil / gas
Eric Nuttall
$19.830
Unknown
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COMMENT

Suncor Energy Inc(SU-T)

03/04/2020
Suncor Energy Inc

The composition of this ETF has become highly concentrated. Five names account for 78% of its value. CNQ and SU account for most it. Both of those names have rallied well compared to their peers as buyers in the US have been stepping in. However, their hedge books are naked to oil prices right now. He would prefer to own small cap names with good hedge books, if you select the right ones he thinks.

integrated oils
Eric Nuttall
$23.950
Unknown
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COMMENT

Insider buying?(A Commentary)

03/04/2020
A Comment -- General Comments From an Expert
Insider buying? Insider buying is a critical indicator as to management's belief they will survive in difficult times. The average energy CEO makes about $3.2 million, so their lifestyle would allow them to buy shares. If a CEO is not stepping up now, you should be asking, why not?
Unknown
Eric Nuttall
N/A
Unknown
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DON'T BUY

Suncor Energy Inc(SU-T)

03/04/2020
Suncor Energy Inc
He had a sensitivity sheet that calculated SU is burning through about $4.1 billion at $30 oil. They would have adequate capacity if they were to cut the dividend -- not 100%, because they would be dropped from the dividend funds. He thinks he could do better in other names. Yield 8.3%
integrated oils
Eric Nuttall
$23.950
Unknown
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PAST TOP PICK

Baytex Energy Corp(BTE-T)

03/04/2020
Baytex Energy Corp
(A Top Pick Apr 26/19, Down 85%) He sold out when oil prices dropped to the mid-$30s. He will own it again and likes their hedge book, which is 48% hedged. They luckily refinanced their debt out to 2027 just before the COVID crisis took hold.
oil / gas
Eric Nuttall
$0.385
No
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PAST TOP PICK

Crescent Point Energy Corp(CPG-T)

03/04/2020
Crescent Point Energy Corp
(A Top Pick Apr 26/19, Down 75%) It remains a core holding for him. They have a great balance sheets as they monetized some assets and hedged aggressively last year. They have about 18% of their oil hedged at $54 and 38% receives a $10 premium to WTI. They have only drawn $500 of the credit line, leaving $2 billion of capacity yet. He expects a $100 million cash burn at $25 oil.
oil / gas
Eric Nuttall
$1.270
Owned
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PAST TOP PICK

MEG Energy Corp(MEG-T)

03/04/2020
MEG Energy Corp
(A Top Pick Apr 26/19, Down 62%) A high quality asset holding. It remains a core holding and he loves how management is operating through these difficult times.
oil / gas
Eric Nuttall
$2.100
Owned
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DON'T BUY

Trican Well Service Ltd.(TCW-T)

03/04/2020
Trican Well Service Ltd.
It is difficult to be bullish on the service sector. The rig count in Canada will be decimated he thinks. When you look at the opportunity set out there, he thinks there are better opportunities.
oil / gas field services
Eric Nuttall
$0.470
No
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