Oil Stocks: Michael Sprung, Sprung & Company Investment Counsel

Michael Sprung, president, Sprung & Company Investment Counsel

On Oil:
We're seeing all of a sudden the analysts estimates valuing oil stocks finally coming back now that oil prices drop..lagging..I don't think we are going to see $45 oil anytime soon..

PENN WEST (NYSE:PWE TSE:PWT.UN): immediately bit of a boost, index funds establishing position..net is that there will not be a substantial differnece..

CANADIAN OIL SANDS (TSE:COS.UN): has and continue to will be a longer-term story..the thing that we're seeing today with the pullback in oil prices, yes the marginal cost of production of some of the things that have been brought on-stream are alot less profitable..leave that alone, Canadian Oil Sandas can produce at profit at today's price, a viable place to be looking for future development..thing that is worrisome is the capital cost being invested..longer-term, we do like Canadian Oil Sands..pulling back recently, a few dollars more and look very attractive

PAST PICK ENCANA (NYSE:ECA TSE:ECA): continue to hold..as high as $65, retrace a lot of it..I would be recommending it at this level..it's very natural gas-sensitive, 70%..more leverage in that than crude oil..well-managed company..we also own TALISMAN (NYSE:TLM TSE:TLM), international exposure..we don't own CANADIAN NATURAL RESOURCES(NYSE:CNQ TSE:CNQ) because of valuation..

PETRO-CANADA (NYSE:PCZ TSE:PCA): really depends on crude oil..one thing going for Petro-Canada is over next 15 months good production profile..number of projects in Western Canada with good chance of increasing production..continue to recommend it, we do hold in most accounts

SUNCOR (NYSE:SU TSE:SU): I like Suncor..like a lot of integrateds, will do well..I think all of the oil stocks are in the period where if crude goes up oil stocks bounce up and vice versa..Suncor selling at fairly reasonable multiple here..relative to some of the alternatives out there, somewhat on the expensive side but not that much..

PARAMOUNT RESOURCES (TSE:POU): do not own it currently..fairly good properties, well situated in oil & gas market..I can't say that I have strong opinion..priced in-line

Michael Smedley, chief portfolio manager, Morgan Meighen & Associates

TALISMAN (NYSE:TLM TSE:TLM): stay with these intermediates..this one is not in the oil sands..disposed of alot of property, will buy more..stay with it, be patient