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Today, Josef Schachter commented about whether TCW-T, PIPE-T, CNE-T, IPO-T, CNQ-T, CVE-T, VET-T, CNE-T, GTE-A, SGY-T, NVA-T, TVE-T, BXE-T, BIR-T, BIR-T, WCP-T, TXP-T are stocks to buy or sell.

COMMENT

Market Outlook(A Commentary)

20/05/2020
A Comment -- General Comments From an Expert
Market Outlook He thinks global crude oil inventories should begin to draw in July. When oil demand collapsed, it was estimated production was about 98 million barrels per day (bpd), whereas demand had shriveled to 65 million bpd. He expects oil demand to recover to 86 million bpd by then. In Q4 he expects demand back to 94 million bpd. Gasoline demand recovery was a little disappointing in the latest statistics, however. He thinks oil price recovery may be a little ahead of itself, because it is not until the second-half that we should see oil prices hit $40-$50. He expects 10 million bpd storage builds in May and 4 million bpd builds in June when storage availability is low. This could cause oil prices to plunge once again soon, perhaps below $20 for WTI. He is telling investors to hold off buying now, because he expects a retracement is yet to come for energy stocks. Be patient.
Unknown
Josef Schachter
N/A
Unknown
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BUY ON WEAKNESS

Touchstone Exploration Inc.(TXP-T)

20/05/2020
Touchstone Exploration Inc.
They just released that they will be bringing on two new discoveries -- the first sometime in the second-half of the year. They are in Trinidad and hoping to add natural gas. This will double their production. Currently they are only a crude oil producer. The natural gas market there is paying up to $2.90 US -- a very good price. He has a $0.80 target. He would buy on any pullback. He owns this one.
Energy
Josef Schachter
$0.690
Owned
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BUY

Whitecap Resources(WCP-T)

20/05/2020
Whitecap Resources
He owns this one. It is up 16% today on a lack of sellers. They cut the dividend to a yield that is still 7-8%. Volumes will likely drop off in Q2, but are expected to spend more in Q4, depending on how the market reacts. The balance sheet is in good shape with $1.2 billion in debt. His rating is "A".
Oil and Gas (Integrated Oils)
Josef Schachter
$1.880
Owned
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HOLD

Birchcliff Energy Ltd.(BIR-T)

20/05/2020
Birchcliff Energy Ltd.
Bought at $4, $2 and $1. They released last week and production in Q1 was solid. He likes the balance sheet. They cut the dividend by about 80%, as he thinks the banks may have asked them to do so. They are mainly into natural gas (78% of production) and he is bullish on natural gas pricing in the latter half of the year.
oil / gas
Josef Schachter
$1.430
Unknown
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COMMENT

Birchcliff Energy Ltd.(BIR-T)

20/05/2020
Birchcliff Energy Ltd.

Debt concerns? BXE took bankruptcy protection when debt became too much. There is no equity value in it any longer. Companies that have debt that matures in 2020 or 2021 will have issues. He sees no issues with BIR or TVE on this topic. The new Federal relief program for large companies may be difficult for companies to accept as it has provisions for up to 15% of ownership being made available in warrants to the government.

oil / gas
Josef Schachter
$1.430
Unknown
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COMMENT

Bellatrix Exploration Ltd.(BXE-T)

20/05/2020
Bellatrix Exploration Ltd.

Debt concerns? BXE took bankruptcy protection when debt became too much. There is no equity value in it any longer. Companies that have debt that matures in 2020 or 2021 will have issues. He sees no issues with BIR or TVE on this topic. The new Federal relief program for large companies may be difficult for companies to accept as it has provisions for up to 15% of ownership being made available in warrants to the government.

oil / gas
Josef Schachter
$0.380
Unknown
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COMMENT

Tamarack Valley Energy(TVE-T)

20/05/2020
Tamarack Valley Energy

Debt concerns? BXE took bankruptcy protection when debt became too much. There is no equity value in it any longer. Companies that have debt that matures in 2020 or 2021 will have issues. He sees no issues with BIR or TVE on this topic. The new Federal relief program for large companies may be difficult for companies to accept as it has provisions for up to 15% of ownership being made available in warrants to the government.

oil / gas
Josef Schachter
$0.740
Unknown
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DON'T BUY

Nuvista Energy Ltd(NVA-T)

20/05/2020
Nuvista Energy Ltd
The company is 40% condensate and 60% natural gas. They took a big $886 million impairment, which dropped their equity to debt ratio dramatically. They have debt that now exceeds equity. The debt maturity will be critical for its survival. He would pass.
oil / gas
Josef Schachter
$0.820
No
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PAST TOP PICK

Surge Energy Inc(SGY-T)

20/05/2020
Surge Energy Inc
(A Top Pick May 24/19, Down 76%) They are producing 20,000 bpd -- 86% oil. The key issue is the balance sheet. They have been paying down debt, but took a large impairment loss that dropped their equity by $591 million. This has left them in a high debt to equity position. They have cut the dividend. He has lowered their target and won't buy more until they knock the debt down substantially. They have shut-in production of 4400 boepd, that is currently uneconomic. His target is $1 per share by Q4.
oil / gas
Josef Schachter
$0.285
Owned
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PAST TOP PICK

Gran Tierra Energy(GTE-A)

20/05/2020
Gran Tierra Energy
(A Top Pick May 24/19, Down 86%) They have shut-in almost 10,000 bpd of uneconomic production -- down almost 30%. He thinks the volumes will recover in Q4 when oil prices recover back towards $40. They have a debt situation relative to cash flows. He still owns them.
oil / gas
Josef Schachter
$0.268
Owned
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PAST TOP PICK

Canacol Energy Ltd.(CNE-T)

20/05/2020
Canacol Energy Ltd.
(A Top Pick May 24/19, Down 8%) They are a Colombian energy player. Volumes have increased and they have a good dividend. It remains a Top Pick for him.
oil / gas
Josef Schachter
$3.600
Owned
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BUY ON WEAKNESS

Vermilion Energy Inc(VET-T)

20/05/2020
Vermilion Energy Inc
Because they had a darling dividend that was cut and caused its price to drop, he bought more in Mid-March at about $4.40. He likes their assets around the world in Europe, Germany, the Netherlands, Australia and North America. They took an impairment Q4 and they are guiding debt of $2 billion and equity now of $1.2 billion. Debt now exceeds equity. The dividend has been cut to zero. He would still be a buyer below $5.
oil / gas
Josef Schachter
$6.850
Owned
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BUY ON WEAKNESS

Cenovus Energy(CVE-T)

20/05/2020
Cenovus Energy
He does not cover the company. The stock has recovered well. It is highly leveraged to oil prices, which he thinks are a little high right now (although he sees $40 in Q4 for WTI). It will probably retrace its price a little, perhaps below $4. Long term debt is $7.6 billion against $17 billion in equity, so the balance sheet is in good shape.
oil / gas
Josef Schachter
$5.600
No
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BUY ON WEAKNESS

Canadian Natural Rsrcs(CNQ-T)

20/05/2020
Canadian Natural Rsrcs
Balance sheet safe? Their debt increased to $19.9 billion by end-March and equity is $34 billion. He feels the balance sheet is safe, but it is very levered to oil prices. As he thinks WTI could drop below $20 again soon on rising global inventory, he would be cautious. They have not cut the dividend, but have not taken any impairments on reserves just yet. He thinks this may cause some concern about the dividend longevity. Don't chase it, wait for a lower price.
oil / gas
Josef Schachter
$25.060
Unknown
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WAIT

InPlay Oil Corp(IPO-T)

20/05/2020
InPlay Oil Corp
He likes the management team and the assets. They recently took a $60 million impairment, which knocked their equity to $57 million, while debt is $53 million. They will probably be looking for Federal loans to provide solvency support. He would wait to see how it performs, perhaps into tax-loss selling later in the year.
Energy
Josef Schachter
$0.210
Unknown
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