| TOP PICK | | TriStar Oil & Gas | TOG-T | 5.300 | About 75% oil and would normally not be one he would be truly interested in. He is looking past the commodity price to their ability to grow their underlying production, reserves and cash flow. Very strong management team. Very strong balance sheet. | 2007-01-18 | |
| TOP PICK | | Crew Energy Inc. | CR-T | 10.650 | Very strong natural gas exposure. Now is the time you want to get involved with gas companies when they are at their low. Very strong management. Grows both by drilling success and prudent acquisitions. There is no premium built into the stock price now because of management. | 2007-01-18 | |
| TOP PICK | | ProspEx Resources | PSX-T | 4.110 | (A Top Pick Oct 27/06. Down 2.4%.) Hit by soft natural gas prices. Continues to have solid underlying growth in its production. Very strong portfolio of medium risk natural gas exploration and development properties but it also has some very high impact, deeper gas drilling targets in western Alberta. | 2007-01-18 | |
| PAST TOP PICK | | West Energy Ltd. | WTL-T | 4.850 | (A Top Pick Oct 27/06. Down 17.5%.) Has done a good job growing its production, but with crude selling off like it has, share price has suffered. Has a play in the Pembina Nisku area and have been very successful in expanding their reserves and production. | 2007-01-18 | |
| PAST TOP PICK | | Lakeport Brewing Income Fund | TFR.UN-T | 21.950 | (A Top Pick Oct 27/06. Up 4.5%.) A relatively small business and has a tremendous ability to grow, generating increases in revenue and cash flow. | 2007-01-18 | |
| Comment | | Harvest Energy Trust | HTE.UN-T | 24.150 | Acquired a refinery in Newfoundland last year. Have been successful in financing this but probably have a little bit more equity financing to go. The refinery benefits from lower crude prices. | 2007-01-18 | |
| SELL | | Delphi Energy Corp. | DEE-T | 2.010 | Quite negative on this stock. The company has a debt problem Natural gas prices are quite low right now and it is having to sell assets at lower prices to pay down its bankers. | 2007-01-18 | |
| DON'T BUY | | Penn West Energy Trust | PWT.UN-T | 33.620 | He is not encouraging people to go into energy trusts at this time. If you are interested in them, this one has a nice broad asset base with some strong undeveloped land potential. Converting back to a corporation would be relatively easy for them. Very high payout ratio. | 2007-01-18 | |
| DON'T BUY | | Solana Resources Ltd. | SOR-X | 0.880 | Not familiar with this particular company. Situated in Colombia, which represents a big opportunity for companies, but was significant risks. The area is prolific for crude oil. The big issue is the guerrillas. | 2007-01-18 | |
| DON'T BUY | | Shiningbank Energy Income Fund | SHN.UN-T | 12.780 | One of the worst performing trusts through this last period. Trades at about a 13% yield. Quite leveraged to natural gas. He is bullish on natural gas for the next 1 to 1.5 years but it is a junior expiration companies is a better way to play the sector. | 2007-01-18 | |
| WEAK BUY | | Synenco Energy Inc. | SYN-T | 11.350 | Expected to start production in 2009. Very leveraged to crude prices. The more leverage, the better performance on higher crude prices and vice versa. Prefers the more conventional producers that can grow their production and cash flow in the near-term. | 2007-01-18 | |
| SELL | | Canetic Resources Trust | CNE.UN-T | 15.090 | This one is right in the middle of its peer group in terms of payout ratio and its yield of about 14/15 percent. There is risk of continued further cuts. | 2007-01-18 | |
| BUY | | Galleon Energy Inc. (A) | GO.A-T | 14.500 | One of the more successful exploration companies. Had a “company maker” discovery last year. In cases such as this, a lot of the potential value gets capitalized very quickly and as the company exploits the discovery, things can go sideways. This is one of the better regarded and more successful exploration companies. Higher risk. | 2007-01-18 | |
| SELL | | Advantage Energy Income Fund | AVN.UN-T | 12.800 | This is a trust that he would sell sooner as opposed to later. Payout ratio of over 160% using cash flow and its capital expenditure. | 2007-01-18 | |
| SELL | | Peyto Energy Trust | PEY.UN-T | 17.360 | Has about the highest payout ratio out there. Has reached its growth limit in its asset base. | 2007-01-18 | |
| DON'T BUY | | Petro-Can | PCA-T | 42.400 | Primarily crude weighted and he is lukewarm on crude. | 2007-01-18 | |
| BUY | | NAL Oil & Gas Trust | NAE.UN-T | 12.280 | This is one of the trusts that at these levels you are in fairly good position on. Trading at about its underlying net asset value. This will form a very strong base under its unit price. | 2007-01-18 | |
| HOLD | | Vault Energy Trust | VNG.UN-T | 4.680 | An interesting situation. Quite a small trust and would be an early consolidation candidate. Distribution gives about a 20% yield, yet it has one of the lower payout ratios in the sector at about 110%. | 2007-01-18 | |
| DON'T BUY | | Vero Energy Inc. | VRO-T | 5.530 | Not a bad little company. Natural gas focused. His concern would be over its relatively high debt levels. Would prefer companies with better balance sheets. | 2007-01-18 | |
| TOP PICK | | ProspEx Resources | PSX-T | 4.210 | Relatively unrecognized. Management has done a good job of bringing lower risk natural gas drilling prospects into the company, growing reserves and production. Likes their high impact drilling portfolio. Good upside potential. | 2006-10-27 | |
| TOP PICK | | West Energy Ltd. | WTL-T | 5.880 | Has property in the Pembina area. Have done a very good job of expanding the extent of the play. Recent discovery in the North end. Done a good job of managing the complexity of the sour oil. Undervalued. | 2006-10-27 | |
| TOP PICK | | Lakeport Brewing Income Fund | TFR.UN-T | 21.000 | A well-run trust. Very innovative marketing strategy. A lot of distribution growth potential. Do a good job of controlling costs. Low payout ratio. Trades at about 9 EBITDA. | 2006-10-27 | |
| SELL | | Vault Energy Trust | VNG.UN-T | 7.560 | Trading at about an 18% yield. One of the smallest royalty trusts out there. Hasn't gotten enough critical mass and could be a consolidation candidate. Better places to be. | 2006-10-27 | |
| DON'T BUY | | Paramount Energy Trust | PMT.UN-T | 17.580 | The most natural gas weighted trust out there. Based on his views of natural gas, this has a favourable outlook longer-term. Has a relatively short reserve life. Prefers more conservatively run trusts. | 2006-10-27 | |
| DON'T BUY | | Harvest Energy Trust | HTE.UN-T | 32.930 | Recently acquired a refining facility in Newfoundland. This puts a risk dynamic into it that wasn't there before. With the fall of crude, the crack spread has fallen off fairly dramatically. 14% yield. | 2006-10-27 | |
| BUY | | Avenir Diversified Income Trust | AVF.UN-T | 10.030 | Likes their diversity. Have oil and gas exposure along with some real estate, particularly in western Canada. Have shown an ability to grow distributions. Aggressive management. Good track record of accretive acquisitions. | 2006-10-27 | |
| Comment | | Arc Energy Trust Units | AET.UN-T | 28.690 | Regarded as one of the highest-quality trusts. Very well run. Good trust for more conservative investors. Yields 8.2%. Low payout ratio. For the more aggressive investor, this could be a good time to rotate into something with a bit more upside. | 2006-10-27 | |
| BUY | | UTS Energy | UTS-T | 4.450 | Oil sands play. Did a good job of bringing other partners into its project. Stock has dropped with the increasing capital costs in the oil sands and higher crude prices. This is like a long-term bond on crude prices. Relatively speculative. | 2006-10-27 | |
| Comment | | Rider Resources Ltd. | RRZ-T | 11.090 | Being acquired by Shiningbank (SHN.UN-T). There was no significant premium to the trading price. Likes the spin off of the new company Exploreco which will be managed by Rider’s management. Not enamoured with Shiningbank, so has stayed long this stock, but shorted the Shiningbank portion. | 2006-10-27 | |
| DON'T BUY | | Shiningbank Energy Income Fund | SHN.UN-T | 20.440 | Inability to grow their asset base and per share distributions. Relatively high payout ratio. Large exposure to natural gas. | 2006-10-27 | |
| BUY | | Canetic Resources Trust | CNE.UN-T | 20.100 | Trading at a 13% yield. Payout ratio is a little bit less than average. | 2006-10-27 | |
| Comment | | Atlas Energy Ltd | AED-T | 3.900 | Recently announced new management and new capital coming in. Likes the transaction. Brings much needed capital to the heavy oil project. Lundin family is behind it so it will be well financed and well followed. | 2006-10-27 | |
| SELL | | Peyto Energy Trust | PEY.UN-T | 22.400 | Undergone a big change. Has been a very steady, growing trust. Got to a point in their asset base where they are unable to continue to grow production/cash distributions. One of the highest payout ratios out there which may have to be adjusted. | 2006-10-27 | |
| DON'T BUY | | Precision Drilling Corp. | PD.UN-T | 32.480 | Expects cutbacks in drilling programs over the next year. As one of the largest, but older fleets out there. As companies cut back their drilling, they will move newer and better drilling rigs on to their properties. | 2006-10-27 | |
| SELL | | True Energy Trust | TUI.UN-T | 11.410 | Has a very high payout relative to their cash distribution. Managed that to some extent by having an extensive DRIP program where investors take units as opposed to cash. This dilutes the overall unitholder base. Trades just under 19% yield. | 2006-10-27 | |
| DON'T BUY | | Cathedral Energy Services Income Trust | CET.UN-T | 9.790 | The oil service sector is in for a bit of a rough ride over the next couple of years. 8.5% yield. | 2006-10-27 | |
| BUY | | Crescent Point Energy Trust | CPG.UN-T | 20.050 | Have proven to be very ineffective purchasers and exploiters of oil assets. | 2006-10-27 | |
| DON'T BUY | | Vermilion Energy Trust | VET.UN-T | 37.300 | The most conservative trust out there. Low payout ratio. A low 5%-6% yield. Not a lot of upside. | 2006-10-27 | |
| BUY | | Nexen Inc | NXY-T | 62.810 | Has a very bullish view on long-term crude prices. Has done a very good job of growing its crude production. | 2006-10-27 | |
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