Oil Stocks: Josef Schachter, Schacter Asset Management

Josef Schachter, president of Schachter Asset Management on oil stocks

OIL SAND OVERRUNS
if prices stay depressed..some projects might not be economical..my concern is labor and water..Athabasca river have come down materially..city of Fort Mac stretched..most expensive housing in Canada..learn a trade, make alot of money..if price of oil $45, projects will shut down..

SOLANA RESOURCES (CVE:SOR): company had problems..number of discoveries..couldn't get service rigs to test them..stock got punished..40 cents in cash..resolved issues..window for upside is here..we have $3.00 12-month target if they have success in the field..

HUSKY ENERGY (TSE:HSE): all of these stocks got hurt..I think it's a cheap stock here..Husky has off-shore China thing..execution good..stock has nice trajectory to the upside..corrections normal in bull market testing comfort zone..for large cap name, makes sense to own

CENTURION ENERGY (TSE:CUX): had some execution problems..target now is $15.00 because of issues..was drilling wells in Egypt..were drilling three wells at the same time..had blowout problems..data now late December..in Sudan will drill after TRANSGLOBE (AMEX:TGA TSE:TGL)

RALLY ENERGY (TSE:RAL): heavy oil play using modern technology from Canada..quite a lot of success..one of the few closest to their high..makes alot of sense..if they get specialized pumps to work..also trying to get more land in Egypt

GROVE ENERGY (CVE:GRV): I own some Grove..has been disappointing..execution issues..we've been waiting for announcement..they're a partner with Sterling in Romania..drilling a well right now..could be first near-term event

NEXEN (NYSE:NXY TSE:NXY): cash flow will be enormous..great asset for an acquisitior..I think at some point Canadian large caps vulnerable to takeover..won't be cheap..own these names and be patient

BOW VALLEY (TSE:BVX): we cover it institutionally..done very well..assets UK, North Sea, Canada..next year company will be bringing on three fields..by end of next year can be producing in excess of 9,000/day..stick with it $8.16 target..company's large term growth intact..pieces of oil discovery in place

FIRST CALGARY PETRO (TSE:FCP): waiting on announcements..fact that there are no news hurting company..interesting play, we don't cover it..size of the prize is there..how quickly they can bring it on

TALISMAN ENERGY (NYSE:TLM TSE:TLM): I like assets of company..selling non-core assets, buying back stock..I believe foreign international guys want to grow..cheaper to buy assets of Bay Street or Wallstreet..at some point, this company will received attractive premium offer

DELPHI ENERGY (TSE:DEE): Delphi has balance sheet problem..debt-to-cash flow number rough..hedges to protect revenue side..non-core assets can be sold..infrastructure assets..I'm a big fan..insiders own 7%..I think they will survive this tough time

ENCANA (NYSE:ECA TSE:ECA): not fully hedged, I don't own Encana..asset base attractive..long term story..attractive for acquisition..I think lot of Canadian companies have great asset bases, good management, attractive to foreigners

GALLEON ENERGY: (TSE:GO.A): think they will be at 13,000 boe, cash flow $3.50..aggressive..exciting play..there are land issues..want to buy more land..

PETRO-CANADA (NYSE:PCZ TSE:PCA) + UTS (TSE:UTS): I think project will go forward..they have Teck Cominco as partner doing the mining..stock has been hammered..down 20%..

UTS (TSE:UTS): until they've evaluated the resource there, I'm not sure if the management would want to give up company..if I'm right that we go back to higher oil price, stock will firm up..it makes sense that one of their partners take them out..attractive price..I think oil will not go down..

SHELL CANADA (TSE:SHC): company has good assets..fabulous balance sheet..core asset for integrated..

TOP PICK NIKO RESOURCES (TSE:NKO): I'm looking hopefully to buying it..Niko has massive off-shore discovery in India..have rigs in location..

TOP PICK OILEXCO (TSE:OIL): started recommending around $4 Sep 05..company will be announcing well result..locked down rig..cash flow $3/share..

TOP PICK ACCRETE ENERGY (TSE:GZ): want to be involved in recovery of natural gas..balance sheet strong..stock is cheap..own it