Oil Stocks David Cockfield, Leon Frazer & Associates on Canadian and American Large Cap (Part I)
David Cockfield, senior vice president, Leon Frazer & Associates was on RoBTV today October 5th talking about North American large cap oil stocks
On Commodities Cycle
Still in supercycle..to go back historically, we tend to build up to big capital binge, use up lots of excess resource capabilities, overshot..now we’re back in situation where world is growing, China and India..unless those economies crash, this commodities cycle not over
On Oil
Nothing’s changed..don’t understand why market went to $75-80..thought $65 reasonable..still in situation where we don’t have huge excess capacity..good part of excess in United States..we’re back where we started..prices need to be in $60-65 zone..
On Oil Stocks:
ATLAS ENERGY (TSE:AED): I have it in my portfolio..conservative junior..heavy oil..great success in extending fields..less success in getting out of the ground..confidant, not outstanding management..good at what they’re doing..potential takeout..probably trading under NAV
UTS ENERGY (TSE:UTS): I had said it was overpriced when at $8..project over horizon..you’re buying future earnings..under $4 if you wanna take a shot for oil sands more reasonable..
BONAVISTA ENERGY TRUST (TSE:BNP.UN): I’m concerned..we don’t own stock..payout ratio fairly high..
CALVALLEY PETROLEUM (TSE:CVI.A): still a buy under $6..increasing production, sales of oil..stable Middle Eastern context in Yemen..can sell their oil quite quickly
PROGRESS ENERGY (TSE:PGX.UN): smaller oil & gas income trust..
TRANSCANADA CORPORATION (NYSE:TRP TSE:TRP): we like them..long-term growth prospect..expansion phase for decades..growth industry..reasonable dividend..business not that affected by cycles..solid balance sheet..add to it when $33
SHELL CANADA (NYSE:RDS.A TSE:SHC): good reserves, into tar sands..if long-term investor, can put money into shell..PETRO-CANADA has been our favorite (NYSE:PCZ TSE:PCA) and HUSKY (TSE:HSE) because of cheaper multiples..this CONOCO-PHILLIPS (NYSE:COP) deal with ENCANA (NYSE:ECA TSE:ECA) interesting..think you’re going to see more American multinationals pairing up with Canadian companies..
HIGHPINE OIL & GAS (TSE:HPX): I like Highpine..own it in portfolios..own it personally..number of mergers and acquisitions for company..brought in more expertise..excellent prospects to drill..easily back to mid $20s..lots of potential
HARVEST ENERGY (NYSE:HTE TSE:HTE.UN): I own Harvest, inherited it..I’m a little concerned..management seems to be fleet of foot..I think payout ratio fairly high..this is one that I’m not going to abandon yet..
CYRIES ENERGY (TSE:CYS): I like it, we own it, I own it myself..management capable of growing production, balance sheet clean..banks like them..if you get into junior situation, one of the ones you want to have..I’m not out with 5-6% on juniors..maybe 2%
On Commodities Cycle
Still in supercycle..to go back historically, we tend to build up to big capital binge, use up lots of excess resource capabilities, overshot..now we’re back in situation where world is growing, China and India..unless those economies crash, this commodities cycle not over
On Oil
Nothing’s changed..don’t understand why market went to $75-80..thought $65 reasonable..still in situation where we don’t have huge excess capacity..good part of excess in United States..we’re back where we started..prices need to be in $60-65 zone..
On Oil Stocks:
ATLAS ENERGY (TSE:AED): I have it in my portfolio..conservative junior..heavy oil..great success in extending fields..less success in getting out of the ground..confidant, not outstanding management..good at what they’re doing..potential takeout..probably trading under NAV
UTS ENERGY (TSE:UTS): I had said it was overpriced when at $8..project over horizon..you’re buying future earnings..under $4 if you wanna take a shot for oil sands more reasonable..
BONAVISTA ENERGY TRUST (TSE:BNP.UN): I’m concerned..we don’t own stock..payout ratio fairly high..
CALVALLEY PETROLEUM (TSE:CVI.A): still a buy under $6..increasing production, sales of oil..stable Middle Eastern context in Yemen..can sell their oil quite quickly
PROGRESS ENERGY (TSE:PGX.UN): smaller oil & gas income trust..
TRANSCANADA CORPORATION (NYSE:TRP TSE:TRP): we like them..long-term growth prospect..expansion phase for decades..growth industry..reasonable dividend..business not that affected by cycles..solid balance sheet..add to it when $33
SHELL CANADA (NYSE:RDS.A TSE:SHC): good reserves, into tar sands..if long-term investor, can put money into shell..PETRO-CANADA has been our favorite (NYSE:PCZ TSE:PCA) and HUSKY (TSE:HSE) because of cheaper multiples..this CONOCO-PHILLIPS (NYSE:COP) deal with ENCANA (NYSE:ECA TSE:ECA) interesting..think you’re going to see more American multinationals pairing up with Canadian companies..
HIGHPINE OIL & GAS (TSE:HPX): I like Highpine..own it in portfolios..own it personally..number of mergers and acquisitions for company..brought in more expertise..excellent prospects to drill..easily back to mid $20s..lots of potential
HARVEST ENERGY (NYSE:HTE TSE:HTE.UN): I own Harvest, inherited it..I’m a little concerned..management seems to be fleet of foot..I think payout ratio fairly high..this is one that I’m not going to abandon yet..
CYRIES ENERGY (TSE:CYS): I like it, we own it, I own it myself..management capable of growing production, balance sheet clean..banks like them..if you get into junior situation, one of the ones you want to have..I’m not out with 5-6% on juniors..maybe 2%
posted by Spelunca at 1:35 PM
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