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Compiling comments that experts make about stocks while on public TV.

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Josef Schachter , President

Schachter Asset Management


Date Signal Chart Symbol Company Opinion Price
2015-04-06 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Energy. Bulls are looking that the rig count has come down significantly, one half in the US and more so in Canada. US production finally had a negative number last week, when it fell by 36,000 to 9.386. Then you add in the liquids, so it is 14.6 million, and the US consumes about 19 million, so the change has happened when you are finally seeing a negative number. Also new inventory last week was only 4.8 million, versus weeks before where we were seeing 8-10 million barrels a week injection. Summer driving season is coming in June-July and demand always picks up about .5 million barrels or more. The worry is that there is 1.5 million barrels of excess capacity. If you have a demand growth of .5 million into the summer and China starts building additional strategic reserves of maybe 50 million barrels, about .5 million barrels per day, starting in June/July 2015, all of a sudden that 1.5 million barrels of excess capacity shrinks. Bulls are looking at it and saying we have a low of $45 with a high of maybe mid $50 until we get to the summer, and then prices can move from there.

The bear side of the story is that there is no inventory places anymore. Cushing last week went up by 2.6 million barrels, so it is now at 58.9 million barrels and effective storage is only 65, so in 2 to 3 weeks, there is not going to be any space left for Cushing to take any more oil, and the US as a whole has 100 million barrels more than it normally has, so there is 100 million barrels owned by speculators. The concern is that there is 1.5 million barrels a day or 10.5 million barrels a week, looking for a home. The bear side is that at the end of April to May, when the US storage is up to the full, where does that oil go? It would mean it has to come down to a market clearing price, and the market clearing price may be much lower. He likes the bullish story for Q3 and Q4 looking for $60-$70 oil. His problem is, where does the excess capacity/production go once the US is up to full capacity by the end of April. During the month of May and June somebody has to cut back production. If OPEC says they are not going to cut back, then the price of oil has to come down. He is recommending that people be patient for another couple of months to see what happens.


Price:
$0.020
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
_N/A
2015-04-06 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Book Value. Does this have any relevance when all these junior companies are selling at a fraction of the Book Value? If the company bought the asset in the buoyant period like in 2013-2014, they paid top dollar for it. The $100 oil asset is now worth less, which is why a lot of companies have been writing down goodwill and taking impairments in their quarterly financial statements, to write down the excess premium. Because of this, Book Value is relevant, especially for the companies that bought their assets 5-10-15 years ago.


Price:
$0.020
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
_N/A
2015-04-06 WAIT Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Natural gas? While oil volumes were rising until last week, natural gas volumes also started peaking. In Dec/14 there were 78.8 BCF a day of US production. In Jan/15 it was 78.1. We are finally starting to see the 1st downtick in natural gas production in the US. He likes natural gas, and in the $2.50 range, he thinks it is probably the bottom. In the winter of 2015-2016 we can probably see back to the $4 handle that we saw March/April of last year. Thinks that in 2016-2020, there will be another great cycle.


Price:
$0.020
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
2015-04-06 DON'T BUY Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

LNG development in British Columbia? There are a lot of companies in this area such as Painted Pony (PPY-T) and Birchcliff (BIR-T) that are doing quite well. The problem is that everybody is hoping that we are going to get LNG out of the BC government. With gas today at $2.50-$2.60 MCF, the export pricing is not going to be high enough. For LNG to work, you need double digit gross prices so that you can pay for the LNG shipping, processing and plants.


Price:
$0.020
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
2015-04-06 PAST TOP PICK Must be logged in to use chart CASH CASH

(A Top Pick April 14/14.) Still thinks we have 3 months of potential severe downside risk. Once we get into June, that risk dissipates, so if people can be patient and find the names they really like, the trigger point will probably be either that we get down to the low $30 and there will be a lot of pain, or you wait until June when you have the window to be a buyer.


Price:
$0.010
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Yes
2015-04-06 WAIT Must be logged in to use chart CPG-T Crescent Point Energy Corp

Great company. Has a very attractive yield of $.23-$.76 for the year. Stock is trading at $30.80. The low for the stock in December, when people were worried about them cutting their dividend, was $20.87. Balance sheet is in good shape. BV is around $23. Have a good hedging program. They are talking this year of spending $1.45 billion and having average production of 150- 2,500 BOE’s a day and paying that $2.76 dividend. You may want to hold your powder dry for the next 3 months.


Price:
$30.800
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
2015-04-06 TOP PICK Must be logged in to use chart DEE-T Delphi Energy Corp.

A Montney producer in Alberta. Did about 12,000+ barrels a day in the 4th quarter with a $.40 annual run rate. Thinks the company is going to do about 11,500 BOE’s a day, a little bit less then the 4th quarter, but up from 10,500 for all of the average for 2014. Expects they will do about $.40 in cash flow. They have the ability to accelerate their growth program, but are being careful on their balance sheet. It has a BV of around $1.48 and about $137 million of debt, so right now cash flow might be as low as $40-$45 million by the company’s estimate. His estimate is $60 million. If you can see this stock at $1.25 or less in the next 3 months, it will be a great Buy. He wouldn’t buy this for the next 3 months.


Price:
$1.790
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
No
2015-04-06 BUY on WEAKNESS Must be logged in to use chart ECA-T Encana Corp

After selling off PrairieSky (PSK-T) they have a couple of billion dollars which they needed for their balance sheet. They were moving their assets into the US and wanted to be in some of the hot play areas. Now very big players in the US in the Eagle Ford and Permian. In Canada they are very big in the Montney and Duvernay. Stock has been hit because of all the problems in the oil patch. Have had to sell some assets to repair the balance sheet. BV is about $13 and the stock got down to $13.31 BV in Dec/14. Any time you can see it in the $13-$14 BV, it is very attractive. Long-term he is bullish on natural gas.


Price:
$14.520
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
2015-04-06 BUY on WEAKNESS Must be logged in to use chart GTE-T Gran Tierra Energy Inc.

Has just gone through a major cost restructuring. They had very successful assets in Colombia. Doing 18,000 BOE’s a day. It got beat up in the latter half of the year. Assets in Brazil are not doing very well. Had a big asset in Peru that was supposed to be the breakthrough for them, but they had some wells that were not so good and it is heavy oil, so the economics are pretty tough. Any time this stock is under $3, it is a great buy. They are focusing mainly on Colombia now and are looking at using their balance sheet which has no debt but has about $1.50 in cash.


Price:
$3.540
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
2015-04-06 TOP PICK Must be logged in to use chart LRE-T Long Run Exploration

(A Top Pick April 14/14. Down 85.15%.) A lot of dividend type stocks got beat up pretty badly because of debt loads. This company has $600 million of debt. Have done well with hedging and production. Probably doing 32,000 BOE’s a day this year. Believes they can handle their debt. Great cash flow and should do $.80-$1 this year in cash flow. Will generate about $200 million in cash flow, and are only going to spend $100 million, use $100 million to pay down debt and they have asset sales to pay down debt. Stock could go to $3.50 if they resolve the balance sheet issue. Wait for 3 months before buying.


Price:
$0.740
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
No
2015-04-06 COMMENT Must be logged in to use chart PMI-X Petromanas Energy Inc.

They had the discovery where Shell is 70% and this company is a 30% partner. There was a successful well they had drilled in Albania. Very deep and very expensive. Now in the process of sourcing a new rig from China. They are going to bring the rig in some time in Q3 or Q4. The drill time on these wells is very, very long. It takes a year to drill and costs $80-$100 million. The company is well financed. Sitting on $24.6 million of cash in Dec/14, which is 3.5 cents and the stock is at 5.5 cents, so you are paying $.02 for the discovery. The problem is that there is no action going on in the drilling fields in terms of new wealth creation at this time. They also have some great assets in France which they are trying to get some partners on. They also have a long-term potential in northwest Australia. If you have a long-term, 2-3 year time horizon, then he thinks the stock is attractive.


Price:
$0.055
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
2015-04-06 WAIT Must be logged in to use chart SGY-T Surge Energy Inc

Debt is part of the issue. They may do $110-$120 million in cash flow this year but they have $564 million in debt as of Dec/31, $3.94 a share. BV is $4.89 as of Dec/14. They took an impairment on some of the assets because they made acquisitions which they bought during the lofty times. They finished the year at over 20,000 barrels a day, mostly of oil. The question is about servicing the debt until things get better. Good management. People are worried that if the cash flow gets hurt in the next couple of quarters, they are paying $0.025 a month, $.30 a share per year in dividends and will it be cut. His guess is that the next quarter will be a tough decision for management. This is one that you may want to own later on.


Price:
$3.150
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
2015-04-06 PAST TOP PICK Must be logged in to use chart SLG-X Sterling Resources

(A Top Pick April 14/14. Down 77.08%.) Likes the company and now owns some. Involved in a play in the North Sea and production is now up and running and doing over 6000 BOE’s a day. Pricing in the UK is fabulous relative to Canada where they are getting over $8 Canadian for their gas. Stock came down because they have debt that put on for developing Breagh, and that debt has payments twice a year, April and October. The balance sheet didn’t have the money to make the next payment, so the market was afraid of the debt issue. Sold some assets in Romania, and are going to get paid in June. He thinks the stock 2-3 years from now, could potentially be $1+.


Price:
$0.170
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Yes
2015-04-06 COMMENT Must be logged in to use chart SU-T Suncor Energy Inc

An integrated company, so you have more defensive characteristics. Production mix is 99% oil plus they have the oil sands side of it. Trying to bring down the cost structure at Syncrude. Cash flow is very problematic if we continue to see lower oil prices. If this got down to the low $30, it would be a great stock to have as a core holding.


Price:
$38.720
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
2015-04-06 COMMENT Must be logged in to use chart TBE-T Twin Butte Energy

Spends about $20 million a year on interest payments. Have $248 million in debt. BV is $1.12 and this is trading at a significant discount to that. Have some good hedges, so they should be okay through the 1st half of the year. One hedge is 3500 barrels a day at $99.76 on a fixed contract. They did $54 million in cash flow in the 4th quarter. The question is, what is cash flow going forward after these beautiful hedges run out? The 2nd half of the year is the more problematic.


Price:
$0.710
Subject:
OIL & GAS
Bias:
CAUTIOUS
Owned:
Unknown
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