Eric Nuttall is portfolio manager at Sprott Asset Management. His focus is oil and gas stocks.
Legacy Oil + Gas
U.S. money is returning and Legacy should be at the top of their shopping list trading at 4.5X EV/CF versus a 15 year reserve life and the ability to more than double reserves beyond that. Regaining a fraction of their former multiple after five quarters of beating expectations would result in a $9+ stock.
TORC Oil & Gas
Great well results in several plays could lead to a guidance and dividend increase in the next few months. TORC can pay the current dividend and grow by 8 per cent per year while spending less than their annual cash flow.
Legal conclusions in the coming months should allow them to receive $3.30/share in cash from Petrochina. That combined with a possible joint venture on their Duvernay acreage could lead investors returning to the story after a few very frustrating years. Asset value exceeds $10/share.
Past Picks: September 19, 2012
Painted Pony Petroleum
Total return: -21.03 per cent
Total return: +66.28 per cent
Crescent Point Energy
Total return: -4.61 per cent
Total return average: +13.55 per cent