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Today, Eric Nuttall commented about whether KEL-T, TVE-T, TOG-T, TOU-T, CEU-T, CJ-T, ARX-T, WCP-T, CNQ-T, CPG-T, NVA-T, MEG-T, BTE-T, VII-T, OVV-T, VET-T, PXT-T, ATH-T are stocks to buy or sell.

COMMENT

Market Outlook(A Commentary)

19/06/2020
A Comment -- General Comments From an Expert
Market Outlook He thinks oil demand is back to almost 90% of pre-pandemic levels. Although he thinks it may not be quite that high, it is the path upwards that he likes. There was a 5 million barrel per day surplus over the past month, which he thinks is not as bad as the market thinks. Traffic is going back up in major metropolitan areas, and flying is showing an inflection as well. By the end of this year he thinks demand will be close to pre-pandemic levels. There are many energy stocks still down 60-70% so he thinks there is good support for a recovery in energy stock prices. The market is near not as loose as he thinks the markets believes.
Unknown
Eric Nuttall
N/A
Unknown
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DON'T BUY

Athabasca Oil Sands Corp(ATH-T)

19/06/2020
Athabasca Oil Sands Corp
Down 95% since recommended? This is a volatile sector and his recommendations have changed over the past year. There were many bearish issues that caused the stock to decline. Under $60 WTI they do not generate enough cash flow. They also have $450 million debt repayment due in February 2021. He can't bring himself to buy this now. There are better opportunities out there.
oil / gas
Eric Nuttall
$0.210
No
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DON'T BUY

Parex Resources Inc.(PXT-T)

19/06/2020
Parex Resources Inc.
It is regarded as lower risk, despite a slightly higher geopolitical risk. They are sitting on $300 million in cash. They are looking for an acquisition outside of their core, so he is a little uneasy on where they are going. There are better names to own first.
oil / gas
Eric Nuttall
$16.290
No
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DON'T BUY

Vermilion Energy Inc(VET-T)

19/06/2020
Vermilion Energy Inc

VET vs OVV? They are both stocks he would not own. OVV participated well on expected index buying in the US, but they are no longer able to attract US investors based on their share price. It is a non-starter for sure. VET cut the dividend and they changed management, but it will be a long road. They can't sell assets to help reduce debt and they can't raise the dividend. They are in far too many geographical areas and he thinks they have lost focus.

oil / gas
Eric Nuttall
$7.090
No
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DON'T BUY

Ovintiv(OVV-T)

19/06/2020
Ovintiv

VET vs OVV? They are both stocks he would not own. OVV participated well on expected index buying in the US, but they are no longer able to attract US investors based on their share price. It is a non-starter for sure. VET cut the dividend and they changed management, but it will be a long road. They can't sell assets to help reduce debt and they can't raise the dividend. They are in far too many geographical areas and he thinks they have lost focus.

0
Eric Nuttall
$14.560
No
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COMMENT

Seven Generations Energy Ltd(VII-T)

19/06/2020
Seven Generations Energy Ltd
70% revenue from condensate? Oil prices has recently rallied due to OPEC agreement extensions and a recovery in demand. Associated natural gas production has begin to rise again and natural gas prices have fallen. He thinks a large oil sands producer using condensate may take advantage of this company and consider it as an acquisition target and a re-rate candidate.
Energy
Eric Nuttall
$3.280
Unknown
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BUY ON WEAKNESS

Baytex Energy Corp(BTE-T)

19/06/2020
Baytex Energy Corp
Speculative buy you thought? If you are bullish on oil, it can be a good buy. He sold it at $0.34 so he could buy others that did not have the same financial risk. He bought it back at $0.40 before the rally up. He sold it after making 100% in a week. There will be a time and a price that it will make sense, but he is not sharing when that will be again.
oil / gas
Eric Nuttall
$0.650
No
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PAST TOP PICK

MEG Energy Corp(MEG-T)

19/06/2020
MEG Energy Corp
(A Top Pick Aug 30/19, Down 24%) Still one of only a dozen core holdings he has. They are sitting on a world-class asset. They are roughly 55% hedged on production this year at $59 oil. They really need about $44 oil to be successful. They are levered, but have refinanced and it is not due until 2024. He is a bull on oil, thinking we will get back to $50 by year end.
oil / gas
Eric Nuttall
$3.680
Owned
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PAST TOP PICK

Nuvista Energy Ltd(NVA-T)

19/06/2020
Nuvista Energy Ltd
(A Top Pick Aug 30/19, Down 44%) It has been a roller-coaster ride and he is still one of the top three holders of the stock. When oil returns to $60, sometime next year they will be strong again. They could be a candidate for consolidation in the space. If you are bullish on condensate pricing, there could be some great upside here. He continues to hold it as a large core holding.
oil / gas
Eric Nuttall
$0.890
Owned
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PAST TOP PICK

Crescent Point Energy Corp(CPG-T)

19/06/2020
Crescent Point Energy Corp
(A Top Pick Aug 30/19, Down 44%) They monetized assets last year and started this year with a good balance sheet. At $50 oil prices it trades at 2.8 times cash flow -- historically it traded as high as 8 times. He thinks oil will get back to these levels by end-2020. It remains a large holding in his fund.
oil / gas
Eric Nuttall
$2.230
Owned
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COMMENT

Canadian Natural Rsrcs(CNQ-T)

19/06/2020
Canadian Natural Rsrcs
It is tough to knock CNQ. The Saudis are rumoured to be divesting their holdings. They have lots of liquidity. He does not own it as it is so large within the energy index. He thinks he would do better owning names that are not already known.
oil / gas
Eric Nuttall
$23.440
No
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HOLD

Whitecap Resources(WCP-T)

19/06/2020
Whitecap Resources
This is a top name holding for him. Once the banks decide on subsidies for some of the companies, there should be some uncertainty that comes out of the share price. They are trading at an attractive level. At $50 or higher oil, the balance sheet is strong and their production decline rate is falling. They are capturing CO2 to work towards becoming net zero emitting.
Oil and Gas (Integrated Oils)
Eric Nuttall
$2.250
Owned
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DON'T BUY

Arc Resources Ltd(ARX-T)

19/06/2020
Arc Resources Ltd
Average down? He has owned it a couple times in the past. He is not bullish on Canadian natural gas, so does not own it now. They are 60% in natural gas and there are summer pricing risk on the commodity. It will take time for a new COO to get set. At $50 oil it is 4 times cash flow -- he thinks there are even more enticing opportunities out there. He would not average down.
oil / gas
Eric Nuttall
$4.750
No
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DON'T BUY

Cardinal Energy Ltd(CJ-T)

19/06/2020
Cardinal Energy Ltd
Light production? It struggles for relevance in the market as a medium to medium-light oil producer. They cut the dividend to zero to de-lever. They purchased old oil fields, but with the higher operating costs and higher risk for environmental liability he would not own this.
oil / gas
Eric Nuttall
$0.640
No
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DON'T BUY

Canadian Energy Services & Technology(CEU-T)

19/06/2020
Canadian Energy Services & Technology
Capital issues? He would avoid this as he owns no service companies right now. Producers have been marginal with cash flow to survive, but there has been no surplus cash flow to increase drilling activity. CEU sells chemicals to US producers and have been forced to cut prices on their product. He thinks the market is in a new normal, focusing on debt re-payment. This will place a longer term cap on activity levels.
oil / gas field services
Eric Nuttall
$1.120
No
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