STOCKCHASE

Peyto Exploration & Develop.

1.050

Debt to cash flow was known to be very high and finally CEO was asked to leave. The only concern he has now is that the stock has had a good run. Company is up for sale. If a bid came in below market value there would be pressure for the board to accept. Upside is limited. Take profits if you have them.

2012-01-24

SELL

PEY-T

19.220

(Market Call Minute) Well run company but a Nat gas stock. Payout ratio sustainable.

2012-01-24

HOLD

Perpetual Energy

PMT-T

0.920

Had to cut their dividend twice last year. Their debt load is extraordinarily high. Feels they are very, very, very financially stressed. Don’t commit new money. There isn’t tremendous upside.

2012-01-24

TOP PICK

Trican Well Service Ltd.

TCW-T

16.450

Suffering from weak nat gas. Thinks it should not affect it. Canadian margins are remaining strong. An absolute essential service. This stocks hold, at some time, should trade at 5 times current multiple.

2012-01-24

BUY

Crescent Point Energy Corp

CPG-T

46.640

(Market Call Minute) Unbelievable companies. Smartest expects he has ever met.

2012-01-24

BUY

Progress Energy Resources Corp

PRQ-T

10.990

(Market Call Minute) Long term buy. Asset will be strategic. There is further downside.

2012-01-24

N/A

A Comment -- General Comments From an Expert

A Commentary

0.020

Markets: 10 year low on nat. gas price last week ($2.22). It is the beginning of a ticking point. Chesapeak is the beginning of producers reducing production due to the price. It is one of the warmest winters in the last 60 years. Huge inventories. Physical storage levels will be filled by next October/November. He feels we need a price of less than $2 to get more companies holding production due to negative free cash flow. CNQ and and ENC have announced they are not shutting in production. Will have a decoupling of nat gas pricing from the stock pricing. He is looking for shut-ins, which we got on Monday’s and capitulation. The fear level is not there yet. We need later nat gas prices to get that. He thinks Gas prices will go below $1.50.

2012-01-24

SELL

2.000

Tragic. Drilled most important well in their history. Came out with amazing drill result last week. An example of why we are having so much gas coming onto the market. Wells are expensive. Balance sheet is mildly stressed. Ideal scenario would be a take-out.

2012-01-24

HOLD

1.880

Slight premium to what North Seas are worth. Don’t yet have production. Will have cash flow in 4-5 months. May have to raise capital.

2012-01-24

DON'T BUY

Anderson Energy Ltd.

AXL-T

0.520

Small cap, successful in transitioning in to an oily name, but he doesn’t like it. They have a fairly substantial debt load – 2.7 times. There are other names below 1. Not an expensive multiple, but there are better names he would buy.

2012-01-24

DON'T BUY

Pengrowth Energy

PGF-T

10.420

The dividend is pretty safe an all growth is in one place. There are way better names to invest in.

2012-01-24

PAST TOP PICK

Bankers Petroleum

BNK-T

5.330

(Top Pick Feb 9/11, Down 39.08%) rebuilding confidence in the management team. Will report year end reserves on Feb 13 and he thinks it will be a pretty good result. Still decent upside. But there are better names to get into.

2012-01-24

SELL

BlackPearl Resources Inc

PXX-T

5.360

(Market Call Minute) Need to raise 125 Million Dollars

2012-01-24

TOP PICK

WesternZagros Resources Ltd.

8.680

Thrashed this month. Could be short-term headwinds, but this is the number one takeout target. Trading at a discount. Balance sheet concerns, so he thinks they will cut cap-x in half. Tip toe in.

2012-01-24

DON'T BUY

Gran Tierra Energy Inc.

GTE-T

5.280

Would be cautious. Good management and good cash balance but it should be going into decline in the next year. Company is floundering a little. Not a name he would own.

2012-01-24

BUY

Twin Butte Energy

TBE-T

2.570

Payout ratio is very low. Low growth but dividend is pretty secure. He is not a yield guy.

2012-01-24

DON'T BUY

Open Range Energy Corp.

ONR-T

1.240

Dry nat. gas producer. They made the decision that they would cut back on drilling in Nat. gas. Will drill liquids rich wells. Trading cheaply on reserves and on cash flow basis. Doesn’t have appeal. Dead money for the next 4 to 5 months.

2012-01-24

SELL

WZR-X

0.680

(Market Call Minute) Concerned about stability in Iraq.

2012-01-24

SELL

Ithaca Energy Inc.

IAE-T

2.760

(Market Call Minute) Be careful. Close to fair value. Sell to take profits, 10% upside remains.

2012-01-24

TOP PICK

11.950

Un-booked reserves plus upside. Balance sheet concerns are over blown.

2012-01-24

DON'T BUY

Canacol Energy Ltd.

CNE-T

0.890

Concerns are 92% comes from one well. They have to come up with 6000 barrels per day to offset the decline in the existing well.

2012-01-24

BUY

Arcan Resources Ltd.

ARN-X

5.390

Likes the story. Drill results on 10 wells next week. Their leverage to the price of oil is very good. Continue to like the name. They did significant financing late last year. Good chance of this name being consolidated this year.

2012-01-24

PAST TOP PICK

5.240

(Top Pick Feb 9/11, Down 38.11%) It was the top of the energy market for the year. They also alienated their shareholder base. Then drilled two unsuccessful wells.

2012-01-24

BUY

Renegade Petroleum Ltd.

RPL-X

3.340

Likes it. 2 quarters of sequential growth. Likes management team. Trading just above 3.8 times enterprise cash flow. Outlook is quite good

2012-01-24

HOLD

Canyon Services Group

FRC-T

11.530

Fracking. Petty thinly traded. Pure play Canadian fracking company. Thinks they will report a record Q4.

2012-01-24

DON'T BUY

GasFrac Energy Services

GFS-T

6.590

Entire space has been weak. He thinks the reasoning is wrong. The Canadian market is very tight. Very much a niche application and would prefer one of his top picks.

2012-01-24

HOLD

Petroamerica Oil

PTA-X

0.130

This stock caused him to despise exploration. They now have an element of cash flow and some cash on the balance sheet. They are trading at 2.5 times cash flow. Thinks they will get taken out. He sold it.

2012-01-24

BUY

Tourmaline Oil Corp

TOU-T

23.360

Always traded at a bit of a premium. A name where it would be one of the first Nat gas stocks to move. At the top of his list. Will buy at $22.

2012-01-24

PAST TOP PICK

PetroNova Inc.

PNA-X

0.880

(Top Pick Feb 9/11, Down 45.00%) Didn’t drill a single well. Sitting on $44 million of cash. He is going to hold it.

2012-01-24

DON'T BUY

Poseidon Concepts

PSN-T

14.890

Valuation is getting a little rich. Take up on their tanks has been unbelievable. He thinks they only have a 5% market share at this point. Companies are on 3 year contracts to buy the tanks. Dividend safe for at least a year. Would prefer fracturing company.

2012-01-24

BUY

Whitecap Resources

WCP-T

8.980

Well run company. Balance sheet is fine and will be growing production by about 27%.

2012-01-24

BUY

Peyto Exploration & Develop.

0.450

Has been a strong shift in strategy. Were taking cash flow from heavy oil and putting it into light oil with mixed success. He strongly disagreed with this because debt level was extremely high. Now stopped because they have $100 million convertible due June/12. Have $120 million now so they can easily pay this. Still thinks this name looks very good.

2011-11-30

SELL

Nuvista Energy Ltd

NVA-T

4.520

You would have to be patient with this. New management is now going through their portfolio and divesting non-core assets. Expect you will be left with a less leveraged company. They have a Cardium and Montne gas play. Cardium results have been pretty crummy to date and the Montne has a sour nature to it. Consider this as a tax loss holding.

2011-11-30

TOP PICK

Precision Drilling

PD-T

11.790

Tremendous amount of confusion and misinformation on spending for 2012. Also concern about margin erosion in the US. Even in the worst case scenario the stock is more than discounting this. Trading at 4.3X cash flow while the historical is 5 to 9 with a long-term average of 6.5. If you knock it down to 6, it is a $17 stock. Strongly good balance sheet.

2011-11-30

DON'T BUY

PEY-T

24.500

Very well run. Have been growing production much more meaningfully than people thought earlier in the year. The challenge is that there is very little liquids in their gas stream so their netback is around $20, which is pretty skinny but they are the lowest cost operator in Canada. Trading around 10X cash flow and he thinks gas is a bit of a write off here. Expensive.

2011-11-30

BUY

Suncor Energy Inc

SU-T

30.720

Oil is a very under owned sector and that will be changing. Looking for a very strong December. This company has enormous leverage and is discounting around $73 long term oil and he feels long-term oil price is going to be well over $100. Execution is improving.

2011-11-30

TOP PICK

Trican Well Service Ltd.

TCW-T

17.410

Tremendous amount of confusion and misinformation on spending for 2012. Also concern about margin erosion in the US. Even in the worst case scenario the stock is more than discounting this. Trades at 3.5X enterprise value to cash flow while its historical range is 5 to 10. Have visibility almost out to the end of 2012.

2011-11-30

STRONG BUY

Calfrac Well Services Ltd

CFW-T

27.660

In general, he feels fracers are the most exciting areas for investment today. There is a misconception that companies will be cutting spending in 2012. He would rank risks of fracing companies as #1 Trican (TCW-T), least riskiest, #2 Calfrac (CFW-T) and #3 Canyon (FDC-T). (See Top Picks.)

2011-11-30

Comment

CGX Energy Inc.

OYL-X

1.060

Very high risk, high reward name. Will be drilling a very high impact well off the coast of Guyana. Make sure it is a very small portion of your portfolio.

2011-11-30

Comment

A Comment -- General Comments From an Expert

A Commentary

0.020

Oil. Stocks have been lagging tremendously. Index is down 16% year to date while oil is up 8%. Looking into December and into 2012, the energy sector probably has the strongest fundamentals of any sector. Emerging economic oil demand continues to be exceptionally strong and will continue to be so.

2011-11-30

TOP PICK

2.200

Have an extremely exciting drilling catalyst coming up. Their 1st Montne well will have results before Christmas and is an incredibly important play because stock has languished under the perception that is that slow 10% growth type of company.

2011-11-30

DON'T BUY

Transglobe Energy

TGL-T

8.370

Have 2 assets, Yemen and Egypt. This has affected the stock price. In the field, there operations have not been impacted but he would write the assets as zero.

2011-11-30

BUY

Bellatrix Exploration Ltd.

1.760

Had some pretty disappointing results in an oil accumulation called Cladhand (?) but at $1.76 you are paying for very little upside beyond a couple of aspects, cash and their gas discovery Brio (?), which is coming on stream in 2012 plus Cladhand, which is worth about $1.50-$1.60. Also won a fight with the Romanian government which could be worth $1.50.

2011-11-30

HOLD

BXE-T

4.970

Considering selling and going into something riskier where there would be a takeover. Good idea? Not cheap enough for him to buy but not expensive enough for him to sell. Have had good results in both the Cardium and Nikinason (?).

2011-11-30

SELL

Vero Energy Inc.

VRO-T

2.270

Perception is that the company has always been over leveraged and management tends to spend more than what they borrow. Leverage is still too high at about 80%. He would hope that they sell to another company. Consider as a tax loss.

2011-11-30

PAST TOP PICK

HBP NYMEX Nat'l Gas Bull+

12.100

(A Top Pick Dec 14/10. Up 52.47%.) Still a Buy. Takeover candidate.

2011-11-30

BUY

Twin Butte Energy

TBE-T

2.300

Acquiring Emerge (EME-T) and will be paying a dividend of around 9%-9.5%. This will be pretty sustainable. Capital appreciation is probably not that fantastic, but a good yield.

2011-11-30

DON'T BUY

HNU-T

10.370

NYMEX Nat'l Gas Bull+ ETF. They get rolled over and rebalanced every single day so, if you hold this over time, you are more likely to lose money. Doesn't think this should be a retail product because the vast majority of people do not understand what they are buying. Extremely dangerous.

2011-11-30

HOLD

Ithaca Energy Inc.

IAE-T

2.070

Finds the North Sea a very difficult area to operate in. Costs are generally higher and there can be weather issues. Relatively cheap at about 3X cash flow. Risk NAV is around $3 which would mean a 50% upside. Once Athena comes online, they’ll produce about 10,000 barrels a day with visibility to grow to about 20,000 barrels in the next 1.5-2 years.

2011-11-30

STRONG BUY

9.170

Was almost a Top Pick. Feels it is the most attractive oil/gas investment in North America. At $100 oil, it is 2 P (proven plus probable barrels), which is what they have already discovered and is worth $10.25. Stock is trading at a 10% discount to that. Very cheap on current production. FV of $15.

2011-11-30

PAST TOP PICK

Novus Energy

NVS-X

0.820

(A Top Pick Dec 14/10. Down 10%.) Thinks FV (Fair Value) is over $1. Still likes.

2011-11-30

BUY

Athabaska Oil Sands Corp

ATH-T

11.810

There are few companies in the oil patch that have more rumours floating around them. Sitting on both oil sand assets and others that are yet to be developed. Have 1,000,000 acres of Deep Basin, an extraordinary area to have land as there is no water as well as stack pay. Can probably do pretty well.

2011-11-30

PAST TOP PICK

8.370

(A Top Pick Dec 14/10. Down 23.63%.) Did an acquisition that the street did not like. Also drilled 2 dry wells. Stock is now enormously cheap and trading below proved value. Still likes.

2011-11-30

DON'T BUY

Tourmaline Oil Corp

TOU-T

30.550

Trading at around 18X this year's cash flow. They have the ability to grow production materially and with very strong visibility. Too high for his liking.

2011-11-30

HOLD

Poseidon Concepts

PSN-T

11.450

Trading at about 6.7X EBITDA, which he thinks is a very conservative guidance. There are better values in some of the fracers that are trading at about 3.5X and drillers trading at about 4.5X. What is supporting the valuation is that they are paying a very healthy dividend. If you like the dividend then Hold.

2011-11-30

PAST TOP PICK

Advantage Oil & Gas Ltd

AAV-T

4.670

(A Top Pick Aug 24/10. Down 24.26%.) So his holdings at $7.75, made a profit and then bought back at around $5.18. Sitting on a very profitable dry, natural gas property. Ripe takeover candidate. 19 year reserve life.

2011-10-13

BUY

Peyto Exploration & Develop.

0.390

High risk because their debt levels are extremely high. Have changed their strategy. People are concerned about their liquidity and solvency but they have $75 million in cash and liquidity is very good. Expect they will continue to pay down debt.

2011-10-13

Comment

Canadian Natural Rsrcs

CNQ-T

31.730

Conventional heavy oil and oil sands out of Horizon. Higher sensitivity than others to the price of oil. Well run. Have more land than any other company in Canada. Should do very well over time.

2011-10-13

PAST TOP PICK

Nuvista Energy Ltd

NVA-T

6.350

(A Top Pick Aug 24/10. Down 38.1%.) Sold his holdings at $10.90 in Sept/10. Bit of a value trap now.

2011-10-13

BUY

Precision Drilling

PD-T

10.810

Service weighting in his fund is now 17%. Market has pummelled this area. CEO is seeing no slowdown in business. Trades at 4.1X 2012 EBITDA where the historical average is 6.1X.

2011-10-13

Comment

PEY-T

20.940

Well-run natural gas stock. Natural gas prices have been extremely weak. Lowest cost operator in Canada. Dividend is well supported. The only negative is that the CEO is not promotional when it comes to selling. Trading at around 8.7X cash flow using $4 gas. Prefers companies with more leverage to oil.

2011-10-13

HOLD

Suncor Energy Inc

SU-T

29.140

Deep discounted stock at $72 oil. More the US investor that will drive the price as this is the biggest component of the energy index. Average US investor has been negative on oil until recently. Very cheap. If you hold for 1 to 2 years, depending on what happens in Europe, he expects you will make 50%.

2011-10-13

BUY

Talisman Energy

TLM-T

13.020

Trading at 70% of its proved values. Proved NAV is $18. Guided down twice this year, so people are giving up. Trading around 4X EBITDA. His short term target is $15-$16. Treating this as a Trade, not a Hold.

2011-10-13

BUY

Baytex Energy Corp

BTE-T

49.240

Well-run company. Heavy oil. Phenomenal cost structure so can withstand low commodity prices. Yield of 4.9% is absolutely sustainable.

2011-10-13

BUY

Crescent Point Energy Corp

CPG-T

42.000

Well-run company. Light oil producer. Phenomenal cost structure so can withstand low commodity prices. Pretty well hedged for next year. Yield of 6.6%. $55 approximate NAV.

2011-10-13

BUY

Crew Energy Inc.

CR-T

10.730

Just sold his holdings on a 1 week trade. If a medium to longer term investor, you should do OK. Stock was weak on concerns their main asset, Princess, is not living up to management’s forecasts. Economics of this play are still very good. Some good assets in the Montne, which could be material. Trading around 5.3X cash flow.

2011-10-13

BUY

1.810

Gapped down on the volume and on very little volume. Drilling the first Montne well with strong liquids, which increases the economic value of the gas stream. Has recently been buying.

2011-10-13

HOLD

1.360

Sold his shares at around $2.30. Finally getting to the point where it is stupidly cheap. Hold until the fundamentals of this market actually matter as opposed to perception. Risk/reward looks pretty compelling and he is tempted.

2011-10-13

HOLD

Bankers Petroleum

BNK-T

4.220

Struggles with this one. Disappointed in management in that they guided poorly. The main issue is that they have not met their production guidance for probably over 3 quarters now. Cheap. Trading at 80% of their proved reserve value.

2011-10-13

PAST TOP PICK

11.700

(A Top Pick Aug 24/10. Up 81.52%.) Very prospective natural gas project in the Montne region. 2 weeks ago they put out a Montne well at 24.7 million a day. These wells produce about twenty barrels of liquid per million. Expect it will get sold at $18-$20.

2011-10-13

SELL

Sea Dragon Energy Inc.

SDX-X

0.075

High profile management team that hasn’t delivered. Sitting on $0.03 of cash and trading at 4X cash flow. If you own, take a Tax Loss.

2011-10-13

TOP PICK

9.230

NAV of proven reserves is about $8 and trading at about 1.1X that. Delineating several plays in the next couple of months that have significant upside, including Alberta Bakken, Spearfish and Turner Valley.

2011-10-13

BUY

Arcan Resources Ltd.

ARN-X

5.180

Continue to come out with phenomenal well results. Recently did a financing. Continue to have good success in the Font Hills play. Looking for a huge ramp-up in production. Prime takeover candidate at $7-$8.

2011-10-13

HOLD

Novus Energy

NVS-X

0.790

The stock has gone down but production level has gone up. Had good success in the Flaxcomb area. They are advertising rates of over 150% on $90 oil. Debt to cash flow is 1.4X using $90 oil. Coming into tax loss selling so it is down along with a lot of others.

2011-10-13

HOLD

4.890

Assets underappreciated by the market. Have 3 areas in the Viking. Red Water area is worth $8-$10 a share. Very good drilling success recently where wells are coming above tight curve, meaning better recovery than thought. Well costs are down to $1 million and wells will recover 85,000 barrels.

2011-10-13

TOP PICK

Canyon Services Group

FRC-T

10.380

Stock has been sold off to a stupidly low level. Trading at 3X 2012 EBITDA level. Have $45 million of cash. Looking for 40% upside. Strong demand for their services.

2011-10-13

TOP PICK

Pinecrest Energy

PRY-X

1.920

Did a $40 million financing at $2.40 in August. A pure play on the Slave Point in Alberta, which is hugely economic. Will be applying water flood to the play which could add a lot more value. Good balance sheet.

2011-10-13

PAST TOP PICK

Advantage Oil & Gas Ltd

AAV-T

5.580

(A Top Pick Aug 24/10. Down 8.55%.) Will become one of the lowest cost natural gas producers in Canada. A real opportunity in this stock. Sold his holdings around $7.50 and reentered at about $6.10. Long reserve life.

2011-08-16

BUY

Crescent Point Energy Corp

0.800

Victim of a falling oil price. Have more leverage of any oil company in Canada. Cost structure is extraordinarily high. Ramp up at one of their oil sands operations has been disappointing. Recently bought 10 million shares because there is a tremendous difference in where the stock is and its NAV. High risk investment.

2011-08-16

BUY

Celtic Exploration Ltd.

CLT-T

23.100

2 of their wells were boomers at Westhaven at about 14 million plus liquids a day. This suggests that the Montne formation is pervasive across all 6 of their net sections. Huge potential reserve growth. Looking at over $30 in the next 6 months.

2011-08-16

HOLD

Canadian Natural Rsrcs

CNQ-T

36.000

Super high quality name. Down 18% this year. Will be ramping up production. Phenomenally well run company. Extremely cheap. NAV of $57. He'll be buying on weakness.

2011-08-16

PAST TOP PICK

Nuvista Energy Ltd

NVA-T

8.460

(A Top Pick Aug 24/10. Down 15.82%.) Sold his holdings. Bit of a value trap.

2011-08-16

BUY

CPG-T

43.090

Extremely well run. You are essentially getting all their unbook (?) For free. NAV is about $55 using $100 oil. If the water flood works you are looking at $60.

2011-08-16

Comment

A Comment -- General Comments From an Expert

A Commentary

0.020

Oil. Where there is fear, there is opportunity. The most important thing to look in oil demand is emerging, economic growth. Power demand in China was up 12% last month and they account for 50% of oil demand. Tanker rates have been very strong. Global inventories are much lower than last year.

2011-08-16

BUY

2.130

Trading at a significant discount to its reserve value. Will be spudding their first Montne well in October. Sitting on an inventory where they can increase reserves by 10X and their production by about 9X. Also have a 4-year drilling inventory that earns about a 84% rate of return. Cheap and one you hold.

2011-08-16

DON'T BUY

Pacific Rubiales Energy Corp.

1.370

One of their drill results was far less than expected. Will require more drilling and funding. In a fight with the Romanian government over property rights. Trading below core value but there is no catalyst to get people excited.

2011-08-16

Comment

Galleon Energy Inc.

GO-T

3.150

Sitting on a huge land spread. Just had a new management change. Has been struggling to grow production for several years. Will take a little while for the management team to chew through the properties and divest themselves of non-core assets. On a long-term holding you could do okay but he prefers others.

2011-08-16

DON'T BUY

Anderson Energy Ltd.

AXL-T

0.710

Going through a painful transformation from a dry natural gas company to oil. Drilling in the Cardium. Debt is a bit of a concern. Value trap.

2011-08-16

HOLD

BlackPearl Resources Inc

PXX-T

5.320

With $90 oil, the NAV would be about $7.50 and on $100 oil it is about $10. About $50 million in cash. Expect you want have 50% upside in the next 1-1.5 years.

2011-08-16

DON'T BUY

PRE-T

25.650

Core value of about $23. Risk (?) value to their upside to their exploration is about $35, so they have about 10% downside but 35% upside. That is not enough given that management's track record in the past year.

2011-08-16

TOP PICK

Southern Pacific Resource

12.500

(A Top Pick Aug 24/10. Up 93.17%.) Highly economic gas. Breakeven price of $1.50 per MCF. Expect they will get sold for $18-$20 in the next year.

2011-08-16

TOP PICK

Open Range Energy Corp.

ONR-T

6.560

Experiencing tremendous growth in their service business Poseidon. Expect they will do $120 million of EBITDA. He is looking for $9 a share.

2011-08-16

HOLD

Second Wave Petroleum

SCS-T

2.700

Judy Creek Beaverhill is one of the hottest oil plays in Canada. Well results have been fantastic. Concerned about debt, which is a little high, which could result in an equity financing. Brookfield owns approximately 46%-48%.

2011-08-16

Comment

STP-T

1.430

Has fallen because of the price of oil. Debt is high but is manageable. Proven plus probable reserve value is $3 at $100 long-term oil. Next project is steam assisted. Very cheap stock but is waiting until it is a no-brainer.

2011-08-16

TOP PICK

9.990

PP is $9 so you get all of their unbooked upside for free. 5 very high impact plays. 3 positive well results in Dakota with more to come. Huge exposure to Alberta Bakken and Turner Valley and others. $14 in the next 6 months.

2011-08-16

DON'T BUY

PetroBakken Energy

PBN-T

11.130

The dividend should be in total jeopardy. The company is using debt to pay it. Totally unsustainable. Yielding 8.6%.

2011-08-16

BUY

Novus Energy

NVS-X

0.890

Production is steadily growing. Were successful in mounting a pretty active drilling program in Saskatchewan despite the extremely wet weather. Sitting on an inventory of 440 net risk locations in the Viking. Where the economics are fantastic. Be patient and let them grow production.

2011-08-16

STRONG BUY