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Workers on a Precision Drilling Corp. oil rig tap into North Dakota’s Bakken formation.

Strong growth and increasing demand are two reasons to be bullish on Cabo Drilling Corp. , according to Beacon Securities analyst Michael Mills. With year-over-year revenue growth of 65 per cent and a push to increase credit facilities, Mr. Mills sees encouraging signs in the company's first-quarter results. "Profitability is improving and record revenues reflect the underlying demand for drilling services."



Upside: Mills maintains his "speculative buy" rating and has raised his target price 5 cents to 35 cents.



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Perseus Mining Ltd.'s resource upgrade for its Edikan gold mine in Ghana is good news for CIBC World Markets analyst Cosmos Chiu, who has increased the mine life for Edikan from 14 years to 17 years. Increased activity on the exploration front is also expected in 2012, with expanded drilling at various new targets in Ghana and Ivory Coast.



Upside: Mr. Chiu has set a price target of $5 with a rating of "sector outperform."



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Vermilion Energy Inc.'s 2012 capital expenditure and production targets are below Raymond James Financial analysts Kristopher Zack's expectations due to Vermillion's conservative approach to spending and its decision to maintain a strong balance sheet rather than delivering higher near-term production growth. This results in a slower pace of development in the company's Cardium light oil program in Western Canada, he says.



Upside: Mr. Zack is maintaining his $47 target price.



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Russel Metals Inc. remains Frederic Bastien's top pick for the North American steel sector. The analyst at Raymond James Financial cites the company's Energy Tubular Products division, which he expects to see healthy earnings over the next two quarters thanks to the growth of unconventional oil and gas resources and advancements in hydraulic fracturing techniques.



Upside: Mr. Bastien set a target price of $29.



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Double-digit increases of metallurgical coal into China in October and November are good news for Teck Resources Inc. , according to Desjardins Securities analyst John Hughes. "We highlight the overall uptrend in metallurgical coal net imports since March, 2011, and believe that China will continue to demand substantial levels of metallurgical coal from Western world producers, including Teck, in order to meet its industrialization needs."



Upside: Mr. Hughes reiterates his $68.50 target price.

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