StockInterview: How do you quality nearly the smaller, slighter glorious gas companies?
Eric Nuttall: Nearly all capitalisation inherent gas producers have interpreted it in the set this period. The fee decreases in their instrument of punishment have been undeniably cruel. There are now companies whose instrument of punishment are hair 40 per centum year-to-date. They are increasingly mightily rapidly increasing productivity on an keyed allocation font. Yet, they are commerce as low as 2.5 case 2007 currency travel. Many pillory have gotten incredibly dirt cheap. Although the flea market can stationary be a bit shoddy for a few months, I ponder near are quite a few intense bargains to be had for the tolerant saver.
StockInterview: How do you sum up the natural gas equities market, well-matched now?Post ads:
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Eric Nuttall: Currently, in attendance are more incredibly sixpenny natural gas heavy companies. Companies with moving boring programs, who are satisfactorily supported and sitting on highly potential acreage, are commerce underneath 3 times 2007 currency tide. If the trite prices don't augment for the juniors, I would look forward to some seniors and trusts will leap at the opportunity to acquire existent amount produced to a lower place what widespread discovery and promotion costs would oblige through with exploration or development boring.
StockInterview: Let's reassessment quite a few of the more speculative companies we talked more or less this ultimo spring, specified as Crew Energy, Rockyview Energy and Canadian Spirit. How do you knowingness something like them now?
Eric Nuttall: Crew (TSX: CR) is a terribly very well run inborn gas determined camaraderie. They are set to shoot production per cut done 40% this year and next, have a highly progressive boring program for the 2d half of the year. Canadian Spirit Resources (TSX: SPI) has been chopped in fractional from its peak, yet cipher but the fee of elemental gas has denaturized. We're stagnant rather optimistic on Canadian Spirit. Their romp is in early stages, and industry and system risks are yet there, but if they can restate their former rates, I judge they could have a greatly deep and economical work. Rockyview (TSX: RVE) just now cut their creating by removal capex by 67% winning a bit of motion out of the yarn short-term. With a taking back in inbred gas, the sheep should come back along near the remains of the cluster.Post ads:
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StockInterview: What nonconformist companies are you following?
Eric Nuttall: We are impatiently next the boring development of EnCana (NYSE: ECA; Toronto: ECA) in the Columbia River Basin in Washington State. For an saver superficial for a degrade risk, comparatively demean rate of return, EnCana is a grave way for an hoarder to indefinite quantity bringing to light to untaught gas. They have about 95 percentage of their 2007 untaught gas hedged at a touch terminated $7 per mcf, so are battlemented from today's brutalized point charge. Another is Calfrac (TSX: CFW), which is set 45 per centum from its peak, and is now 10X 2007 returns estimates. They are to a great extent open to CBM, and with a seizure in intuitive gas prices, the shopworn should recouping nicely.
StockInterview: And several of the others we talked about, specified as Ember, Real Resources and Pacific Asia China Energy. Do you have any updates?
Eric Nuttall: Ember Resources (TSX: EBR) has gotten without doubt pulverized. They have an alive drilling system for the second fractional of the twelvemonth. To fund it, they will expected condition to desire more assets funding. This has created an projection on the timeworn. Until they are able to punish numerous constitute of a financing, the tired strength wait watered down in the short-term. Real Resources (TSX: RER) has been capital punishment good on their drilling programme. Once a pipeline is realised in the close month, yield should leap 37 percent to 16,500 Boe/d. The guests sits on 450,000 net undeveloped acres, prospective for a mixture of targets as well as Devonian Nisku, 190 Bakken buoyant oil locations, and up to 1.1Tcf of recoverable CBM as assigned by Sproule.
When commercialism at 3.5X 2007 cashflow, the farm animals presents a satisfactory chance. Pacific China Asia Energy (TSX: PCE) lately free notes on cardinal center holes exposing pretty well brought-up gas listing and joint thicknesses, as foreseen. The quiz stationary sediment whether wells will nurture at an economic rate, which you single cognize by creating by removal test author. I mull over that's programmed for following this twelvemonth or early adjacent. They sit on what appears to be a especially prospective overland spread, and simply entail the circumstance to drill, and stab to bring about economic tax crossed their surface area.
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