David/General Conversation
I've heard of Amber and have seen their press releases, just haven't gone further into researching the company. As much as I cover this market sector, I don't know how I let this one get by me as far as compiling information goes. I see and collect press releases but I rely on actual published financial and operating reports to dig into information. I like their production mix between oil and gas.
Talisman Energy is not a company I'm in contact with. They are just to big to give me the attention I desire. It's a case where they have investor relation personnel processing requests and they can't handle detailed questions I ask. I like talking directly with CEO's of the small cap juniors and I know enough to interpet their answers. Believe it or not, they too like to talk to investors who have a lttle knowledge of the industry. I spend quite a little for use of mail and phone communication channels.
Regarding high multiples. As you stated, there are some great companies not in my top twenty because shares are expensive. Berkley Petroleum is my favorite company, but couldn't list for that reason. You can add Tri Link Resources and Baytex Energy to that list also.
I am bullish and admit that I was over zealous in terms of what extent one's portfolio should contain oil & gas stocks along with industry related stocks. It's not that I lost perspective, I believe weighting of issues in one's portfolio really depends on the size of the portfolio. In your case, we're talking about a fund, and that's where I lost it. I agree wholeheartedly, 10% is a healthy position in any one market sector when you're managing a sizable amount of capital.
Read article, resulting from conference they are having in Calgary, where another individual stated oil prices will drop to $8.00bbl. Sort of scary when you see this type of comment. Up to about 9 months ago, I favored the companies who were dominant in oil production and have been looking at a mix close to 50/50 in production since. I have now adjusted to favoring companies who have 50 to 75% production in natural gas. my thinking is basic, oil prices have room to move down and natural gas has room to move up in price.
Did you know Alberta spot pricing for natural gas is about 50% of that elsewhere in North America. Major reason is lack of appropriate pipeline capacity to move it to US. I reference pipeline news articles so everyone can see how hot a topic this is. From a year to year basis, price for natural gas has improved 50% for most Canadian companies and I see current prices being doubled in 2 to 2-1/2 years time, and that estimate is based on NYMEX prices realized this year. I believe increase in NYMEX prices will also occur over next two years. Call it a positive double whamy if you will.
As you review oil and gas companies for investment, it would be nice if you could comment as to summary of your analysis. I enjoy reviewing another's assessment of a company.
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