[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Joseph Shakar. He is president and author at the Shaker Energy Report and a 40-year veteran of the industry on both the buy and sell side. Thank you so much for being here. Great to have you. My pleasure. Good to be with you again, Charlotte. Yes, really good to be catching up with you. I was checking and our last conversation was all the way back at the very end of 2024. So, of course, a lot has happened since then. I


thought we could begin with just a a quick recap of the oil market in 2025 so far. Any key takeaways that you would pull out just to get started? Yeah, I think the big thing is is just the the big difference in the price of oil. Beginning of the year, $79. Everybody was pretty happy with that. And then you go into April and you're $56 a barrel and uh you know we're about $62 today. So um you know the at 79 the industry was quite profitable. Uh companies you know and many of them were talking um or


many forecasters were talking about 80 or 85 by the end of the year uh and demand growth. And then of course uh you know President Trump said tariffs, tariffs and uh threw everything into a you know into a tail spin. And of course everybody started talking recession uh you know 100% tariffs on China does just doesn't work. 145% tariffs doesn't work. Um and so uh we still haven't seen the impact on that in the economy. Um you know we saw you know a negative uh PPI number this week. Um and but the key


thing is many companies including Walmart have said the price increases from the tariffs will start hitting in June uh which is what few weeks away and that's going to cause inflation numbers to go up and even Jerome Powell from the you know the Fed chairman has now said that the the tariffs and all these uncertainties are going to be problematic. You also have a budget crisis in the states. You know, are they going to have a, you know, a budget? Are they going to uh move the debt limit up?


Uh are they going to be able to put through through the tax cuts they want? Or are they going to have to uh you know, do budget cuts? Again, when you have a $2 trillion deficit, going to three or four does is crazy. Uh you know, you want that number to go down. So, and you know, right now I think the revenues in the US are $5 trillion and they're paying a trillion in interest payments. Well, if interest rates go up, that's a problem. If the amount of the debt goes up, that's a problem. And, uh,


the amount of money you have for programs becomes a problem. Uh, so that's really, you know, kind of a a global issue. Going to energy, um, there's two thesis out there. There's one that we might go into recession because of the tariffs. Um, and that means demand for oil goes down. And you've got some doom doom and gloomers saying we're going below 50. And then you've got people like myself who are in the optimistic camp who say look we're gonna handle the tariffs which you know


because they're not going to be you know he likes Trump likes chaos throws crazy things out and then he becomes more rational or he or he has the you know the secretary of the treasury descent be the rational one uh you know and good cop bad cop uh we know which one the bad cop is and uh you know descent is trying to get deals that make sense for both parties that they can live with and move forward with. So, um I'm in the camp that two things. One, I don't think we're going to go into a if we have a


slowdown, that's one thing, but a full-fledged severe recession uh like we did in 0809, I don't see that. Second, um on May 27th, not far away from where we're talking, um the US is going to be putting sanctions on Venezuelan crude. So Venezuela will not be able to sell crude um into the Indian or Chinese markets or whatever and they'll lose about 500,000 barrels a day of production. So from a million uh they'll lose half of it and um and um you know if you know there's so many ways they


can do sanctions on the buyers. they can use, you know, access to the Swift financial system, um insurance, you know, there's so many ways they can sanction u potential buyers that they're not going to buy. Um you're already seeing Chinese um you know, teapot refinery saying they're not going to buy anymore. Reliance Group, which is the largest refiner in India, saying they're not going to buy anymore. So that's number one. Number two, uh the issue with Iran is a big one. If there's an


Iran nuclear deal, then the sanctions may come off and Iran will be able to then get uh foreign investment to re to build up their um their uh their uh business. I think they produce about 3.3 million barrels a day. Uh so about half of that is exported. On the other hand, if there is no deal and the US puts on severe sanctions, they could lose 1.5 to 2 million barrels of that production. And if people remember during Trump's first term when he put on the sanctions, they lost 2 million barrels. They were


about four and they went down to two. So we know that sanctions can work. We know that Trump has done that before. And right now the concern, as we heard from Senator or Secretary of State Marco Rubio, is that um the Iranian nuclear program is close to having um fishable material for nuclear weapons. and it they're weeks away potentially. So either they stop them and get them to to to rem, you know, to give that away, allow nuclear inspectors to go in uh and then they can have a nuclear program for


peaceful purposes, nuclear power or whatever in their country, but uh the nuclear weapon side is not there. If they don't agree to a deal, which right now looks more likely of the of the two choices, then they will have sanctions on them sometime during Q3. And if they lose a million and a half, so then you have half a million away from Venezuela, a million and a half off from Iran, plus demand growth, and there's estimates on the bare side 800,000, on the high side, 1.4 million. Let's make easy for math, a


million. Then all of a sudden, you have a 3 million barrel demand increase. Right now, because we're in the spring shoulder season, supply is a bit above demand. Once you get into the summer, demand will be higher than uh than supply and definitely in Q4 when you have Iran and Venezuela um you know sanctioned then we will have a um a decline you know a very tight inventory situation demand higher than supply and inventories today global inventories not just US or or or anywhere you want to talk individual countries we are at the


lowest level that we've been at in a decade. in terms of global inventory. So any supply shock, i.e. Iran and Venezuela, is going to drive prices up. I think we'll see $70 before the end of Q3. And in in Q4, I think we'll see an 80 handle. So it may not stay there the whole time, but it'll pop up 80 8182 back to 78. But I think we're going to be looking at 80s and then in 2026 even higher. So my view is when you get these periods of weakness and I think we're, you know, if if we have weakness in the


stock market, oil goes down below 60 again, we're going to get another buying opportunity like we had in early April. If you remember from our research in early April, we said we have a table pounding buy. We added sent out an FCR Shaker energy research action buy alert and added additional names to the buy list and we said the these are bargain prices here. take advantage of it. Many stocks from that level are up 20 30%. So, it was a work it was a it was a good investment window. I think we'll pull


back a bit. We may not get as cheap prices as we got in April in the first week in April, but I think we'll get another good buying opportunity sometime during June and we'll be sending out an action alert to subscribers uh so that they can take advantage of it and u add to their positions depending upon their risk profile. you know, do they want conservative pipeline infrastructure? Do they want companies that are in the EP sector that have growth plus pay a dividend or do they want companies that


are just growth? So, and then also the service sector. So, there's a lot of opportunity both domestic and international um as well. So, um you know when I look at the list uh you know our our action by list I see you know a large number of opportunities there. Um and again I think uh we've been cautious in the sense we said don't go to a fully invested position yet. We think that the next buy signal when it comes we would say to to people depending upon you know what you want in energy be it


conservative energy pipeline infrastructure royalty trusts or ENTP that's when we think you might want to go to whatever a full position is for you and again sit down with your investment advisor what is appropriate for your risk profile and your long-term goals and then pick the names that fit that and in a lot of cases you could be ending up with a portfolio of six 7% %. There are a lot of highquality companies out there today that yield over 10%. Shockingly, 10%. So, um, if you want a mix of a portfolio, you could end up


with a 6% yield, uh, between companies that don't pay a dividend and those that do. Um, and so that, you know, compare that to what you can get in the bank. At the same time, you're getting stocks that are extremely cheap based on historical measures of uh price to, you know, to NEV, price to cash flow, all of the metrics that you look at. Um, so, you know, these are bargain times, and every time you get a dip, it we're saying take advantage of the the word and instead of using the four-letter


word sell, we're saying the threeletter word buy. Okay, that's a really great overview, I think, of what we're seeing in the oil market right now. And so we've got those two scenarios that you laid out and you're going in the bullish direction. I wondered if there's anything more that you would add on the price. So price is still for you going higher than we are right now, but it sounds like there's going to be quite quite a bit of volatility. Is that would you say that's correct? And the other


thing I'm wondering there is still that that bearish sentiment in the market among some people. What would be the downside risks the biggest ones that you're looking in terms of before price targets? Yeah, the the the low is if you remember in early April 56, we bounced to 65, we came back down to 57. Uh we're now 62. Um the downside is in the is in the 50s because the industry stops drilling and the US production levels will come down. U Canada of course we have the benefit of a 1.4 currency. So


you know with a you know 7172 cent currency. So oil companies do benefit because of the Canadian dollar you know the exchange rate benefit. Uh but in the you know globally a lot of companies when they see you know if it's below $60 brand or and you know mid50 mid50s for WTI they're going to stop drilling. We've already heard American companies say that they're going to lower their capex. they're not going to drill as much. U if they cannot make uh drill wells that are that are going to be uh


you know attractive economics, they're not going to do it unless they have commitments where you know they they they went to a land owner and say we'll drill two wells on you um during the year. They'll have to drill those wells on a commitment basis, but anything that's discretionary uh will stop. So the high water mark at the beginning of the year uh the US production data and again we get this every week from the EIA the energy information administration of the of the US government was 13.6 million barrels a


day. That's the high water mark. The last week's data was 13.4. So we're already seeing a bit of a downturn in the US production statistics. And the longer the price of oil stays low 60s to below 60s, we're going to see the US numbers come down. And that is very bullish because, you know, the industry needs um $70 probably to justify drilling. And if you want to see a growing American production profile, you're going to need $80 WTI or higher. And we've heard that from a


number of CEOs of major US companies saying that if you want us to drill more drill baby drill, it's not going to be at $40 or $50. It's going to be at $80. Yeah, I think that makes complete sense. And you know, just looking at some of your comments in your I think your latest ion energy report as we're talking about all this turmoil, you mentioned the potential for a geopolitical black swan that could be quite disruptive for the stock market. So I know black swans of course inherently they are unknowable but I'm


wondering if I could get your thoughts on some of the events that you're considered you make that statement. Yeah, that you can you can look at everything from geopolitical where you know something happens you know with China and Taiwan um you know Russia and Ukraine you know that that war expands uh something happens with Iran where they don't and you know they they close the straits of Hormuz u it could be uh um you know something with the US deficit you know or debt um you know bond auctions in the states US 10year


treasuries have gone up as of you know 3 T bills have gone up here. If all of a sudden auctions to finance the deficit, you know, $2 trillion plus the renewal of bond auctions. If those you if we have a bad auction and all of a sudden people see that the American government needs so much money and we have foreign owners like Japan and China selling US debt and not buying more new debt, all of a sudden you could see a crisis on the on that side. uh where um you know the the the US can't finance cheaply and


the cost of of getting the the the bond off offers are going to have to go up from let's say 4.4 4.5 on the 10-year if they go up to 4.8 which was the high you know last year or and and shockingly if they got over 5% that would really scare the markets and and that would be a discount mechanism for what you would pay for stocks. In other words, the multiple you'd pay would go down as interest rates go up. So that's there the budget issue right now um you know if somehow the the deficit hawks say no


um and there's no deal then you know you don't have it comes tax cuts kicking in at the end of the year that would be harmful to the US economy. Uh small businesses would be hurt because of that. Um and you know right and that would be an issue. Um and then the then the other one is the the is the um um the the debt limit. You know, it's right now 37 trillion. Uh they're talking raising it by 4 trillion uh you know, for 2 years uh and then you know, leaving it to you know, to the next


Congress to deal with. So there's a lot of wild cards here. Um and so any one of them could spook the markets. And the markets do not like uncertainty. And so uncertainty causes, you know, the the the big decline that like we saw in the general stock market, you know, from the 45,000 on the Dow down to, I think, 38,000. So, uh, we could see some, you know, pretty nasty, uh, markets if, um, one of these black swans, and there's probably others I haven't even thought about. Uh, you know, North Korea could


do something. You know there's there's a lot of crazy places around the world where um you know the people are not logical and they could do something that uh that that really uh you know puts um a problem to the world which and any problem would be uh disconcerting to stock markets. I think it's really important to just be aware of that broader context and I think it's okay also if you can't think of the black swans because that's the kind of how they work is they come out of nowhere.


So, we'll we'll see what happens there. Just when we're on the the US and Trump, I wanted to go back. You mentioned drill baby drill, and this is what Trump had campaigned on. He also would like to see lower oil prices, which the companies, as you mentioned, they won't drill until there are higher o oil prices. So, overall, how how are you seeing the interactions between Trump and the oil industry developing in his his second term in office here? Well, you know, the the um you know, the secretary of energy


is from the oil patch. He was the former CEO of Liberty, which is an energy service company, a fracker um you know, and a and a big one in the US. Liberty also operates in Canada. Um so you've got somebody who knows the industry and knows what can be done and what can't be done. So uh you know Trump wants the United States to be an energy superpower and it can be and the big part of it would be u you know if we do have adequate prices attractive enough economic prices to bring on more oil but


more importantly natural gas. The United States went from nothing on LNG a decade ago to about 15.7 uh BCF a day of ex you know of export capacity with LG that they're selling to Korea. uh to Europe of course big need there uh because of they can't they're not buying Russian gas as much uh and to Japan and other India etc. So they could uh based on the projects that are already approved and that are in the pipeline by 2030 they could be producing 28 BCF. So that's a growth business and


they would be right now they are the largest LNG exporter in the world more than Qatar more than Australia and that's from nothing a decade ago. So they will be much much bigger by the end of this decade with all the projects and we in Canada will have our first project on June. The first cargos from LG Canada will be exported during June. Uh from the data that we're seeing and then you add in all the other projects that are in the pipeline by the end of this decade we could have five or six BCF of


Canadian exports. Putting that in context domestic production is about 18 or 19. So that's a pretty good growth rate into the end of the decade and that's why we're seeing the consolidation that we're seeing where uh Chevron sold their assets and CNQ bought them. We just saw the the announcement where um Strathona is selling assets to ARC and to Termolene. Um and so there's a lot of deal flow going where it's concentrating in a number of hands uh which are very big which can be have the


creditworthiness to be involved in the LNG export market or you know can can tie down um you know pipeline capacity to take natural gas down to the US Gulf Coast and ship LNG from the US Gulf Coast. So ARC termine you know are the big boys there um in that and uh um the consolidation in deal flow I think will continue um as you know the the the big boys decide they want to control the reserves and then the LNG operators uh the ones who have the LG plants and have those 20-year commitments when they when


they do deals they're going to be also wanting to control reserves and they would also be a buyer so I believe in the latter part of 25 and and probably very active in 26 will be the M&A side. Um you know and the deals that we just saw this week with you know Strathona and ARC and and Termoline uh you know will be more more of a regular event than just something that happens every few months u you know when we see a deal deal announced. Okay. Really interesting. So, so more M&A to come and


I've got more questions on the companies for you. But before we get into that, I want to look at Canada as well. So, you started to mention what's going on in Canada and I think it's really important to talk about because we've also had a transition in power here. We've got Mark Carney now taking over from Justin Trudeau prime minister. So, I'm wondering what you think that the oil industry is going to look like under Carney. People I think are wondering okay are we going to get similar to


Trudeau or is it going to be different? So what are your thoughts? Well, that was why the you know the the sign the swearing in of the ministers was very important and I was watching it on TV and which I normally don't watch politics in Canada but uh the impact on the industry was so important that I did and when you saw the announcement that um that uh you know the the new environment and climate uh minister was uh a climate activist who is not fans of uh the the fossil fuel industry. That


was a negative. And then uh you know the positive was the energy minister uh was somebody who came you know from the public private sector had been advisor to Carney when he was in charge of the Bank of Canada uh but also comes from you know the the I think Goldman Sachs world. So he has experience in in our world uh the investment world. So I thought, you know, that was a good point. But then, uh, Gilbo, who doesn't like fossil fuels, came on the, you know, TV and in got interviewed and he


said, "We don't need any more pipelines. Peak oil is coming and, uh, we have lots of capacity in our pipelines. You know, we're only using Trans Mountain 40%." And the reality is he didn't even know his own numbers. The numbers are between 70 and 80%. And it's impossible to run pipelines at 100%. Because there's maintenance time. Uh you've got to clean the insides, you know. So we're really effectively getting close to full capacity on TMX. Might take another


year, but you know, if we get a little more growth in the industry that TMX will be full, you know, I the the Anbridge lines going south are full. Um and so uh the announcement that Strathcona made where they bought the hardesty terminal for rail cars uh which was announced yesterday tells you that people in the oil sands and the thermal oil sag side believe we will be filling the the TMX up you know in within a year or two and all of a sudden we're going to have to do oil by rail again u and


that was why Strath Kona you know made the decision to number one buy the hardy and number two make the overture uh to buy Meg um and uh consolidate that to be a much bigger player in the SAGDI oil sands business. Okay, really good to go over that. So, if we're in this environment where we have party and we have his ministers who maybe are not quite quite up to speed on what's going on in terms of the energy markets, how are you feeling about the Canadian oil and gas companies in this in this new


scenario? Well, you know, given that uh you know, nobody's going to turn off the pipes uh down to the states, you know, the Americans aren't going to want it. And you know, you know, the you know, and and the within Canada, you know, the the oil and gas will flow. So I think the industry doesn't have a big downside but it's the growth on the upside and how there's going to be growth what the carbon taxes are which affects profit profitability uh those things maybe federal taxation changes which impacts


profitability but the stocks are trading so cheaply two to three times cash flow and I can point to companies trading under two times cash flow I don't think I can do that in any other industry in Canada talking about how cheap the stocks are. So that's a positive, you know, in terms of downside risk protection. Um, if we get uh Carney saying that he wants to develop resources, be it mining, forest products, and the energy industry because he knows he needs more uh economic development. We need more jobs


for Canadians, highpaying jobs. And we also need the ability uh to have more tax revenue going to the provincial governments. you saw the announcement about the Ontario budget deficit, uh, you know, that the numbers are skyrocketing versus the the the the assumption that they were going to have a balanced budget soon. Uh, 14 billion versus a 1 billion number. You know, that's how crazy the numbers are. Um, the federal budget deficit's going to be enormous. So, you know, you need to find


revenue sources. Energy is a very good revenue source. It's one of the biggest. It's about 10% of our GDP. Um, it's our big biggest export. So um be it natural gas or be it oil or you know so we're you know on going uh south and then LNG going and and oil going west um to BC and then overseas. So um I think in the end um while there's going to be a battle over carbon taxes and emissions methane emissions um and the industry is doing a very good job on the technology to lower emissions without even


government prompting to them. they know this is the way to go and they live there. So, you know, they don't want a sour gas well next to their home and then this and then all of a sudden the sour gas escapes and it impacts the safety of their family. So, you know, people don't realize that the industry and the the technology that's been developed um is because the industry is trying to be good stewards of the environment. They work very very well with First Nations and the First Nations


are very big supporters. You saw the announcement uh from Nbridge with uh the old west coast transmission pipeline in BC where the first nations in the area will own a piece of it. That is what we need to see for good stewardship and also for good uh sharing of the wealth creation uh that's being done in Western Canada in the energy business. And I think the examples we're seeing, including that Enbridge one, uh, and others that we've seen are are the way the industry will go that has a buyin


from First Nations. First Nations get good revenues and ownership and they have very good paying jobs for their people and importantly training for those skilled jobs provided by the companies who do that again because they need skilled workers in the areas where they're operating. Grand Prairie, the northern part of, you know, Alberta, Fort McMurray. So, having a buyin from the local um communities, indigenous and others is important for the industries uh to continue to be able to grow in the


years ahead. Really good points and I agree. I think these are elements that are often overlooked by people who are looking at the oil companies. So, we'll we'll see how that develops. I always like talking about what's going on in North America, but I wanted to bring up OPEC as well. So, we got the news that they're going to speed up their production cuts or production hikes in June. And I'm curious to get your thoughts on that as well because I What are what is the plan there? What what


are the goals of OPEC in in doing this? And how do you see that playing out? Yeah, OPEC is um is um announced that they were going to cut uh production by 400 or increase production by 411,000 barrels in the month of um May, another 400,000 in the month of June. And uh we've seen uh where many countries don't have enough money that to be spent u to keep production of Nigeria, Libya, and others. So there's no growth coming from them. Uh the only countries that really can increase production are Kuwait and


uh and Saudi Arabia and Saudi Arabia potentially 600,000 barrels. So uh you know what they're giving is new quotas for those 411,000 barrels. Many countries can't use the new quota that they've got. So real barrels coming on the market won't be 411 in one month, 411 in another. it might only be 400 for the two months because of capacity limitations by many of those countries and uh Saudi Arabia is not going to want to push too much down on the price of oil and because they would like they


have a lot of expenses, you know, including spending a lot of more money on on on things they did with Trump this week where he they're going to be buying a lot of more military hardware and energy infrastructure and doing deals on LNG. So, um, to me, uh, I don't think we're going to see, uh, that much oil coming on. And during that same time when that oil is supposed to come on, that's when Venezuela loses, you know, the 500,000 barrels a day. So, the reality is there's not new oil coming on


on a net basis. And then if Iran has their pro, you know, the the issue with them where they get told in Q3, you're now sanctioned and and they lose a million half 2 million barrels, then the game is on from the bullish side. Uh the reason we got bearish in Q1 2024 uh when we were up at the you know, we were $87 in, you know, at the end of Q1, uh was we were beginning to see that number one, US consumption was coming down year-over-year. the biggest demand market in the world and two China which


was importing you know 14 million barrels a day um uh people were saying it you know oh that's great you know if final demand is there but the Chinese put together another strategic petroleum reserve of 50 million barrels and 1.5 million of that 14 was going into the SPR once that SPR was full China and that was approximately at the end of Q1 that's when the demand started weakening from China. Uh and that's when we started seeing the price of oil come down from that 87 and it went to that


was in um April, late March, early April. It went down to $65 in September. So that's why we were cautious and said, you know, we're going to see weakness. We felt the same way when we got to 79 at the beginning of this year, but now we're at the bottom of the range on price where the industry is not going to bring on a lot of new production. And two, the summer's coming. People drive more in the summer. The biggest demand is the winter. It softens in the shoulder season of the of the spring,


rises in the summer, weakens in the fall, and then picks up again for winter 25 26. So, we're going to see, you know, 104 105 million barrels a day of consumption this year. If it goes up by a million next year, that just means, you know, stronger demand. Uh, and the key thing is it's not going to be the OECD that has the growth in consumption. the OECD will be flat. US is up, you know, one and a half% over last year. U gasoline demand's only up a half a percent. Um, you know, so it's not


really growing very much. Um, you're not seeing much growth, you know, in Europe in terms of because of EVs and fuel efficiency and everything. The demand is coming from the third world, the non OECD, from Africa, from South America, from parts of Asia where they are bringing on the new lithium, the nickel, the copper, all the things we're going to need for that transition to a more fuel efficient, energy efficient world. They need to use more energy to do that. and the for the for the you know


facilities, the mines or whatever uh upgrading of you know of of copper and nickel refining it and then the people who are doing the work want a higher standard of living. They want electricity in their homes. They want running water in their homes. They want to go from bicycles to to to cars and trucks and things like that just like you know we've had in terms of economic development here as we saw what happened in Japan and Korea you know over the decades as they you know went from you know agricultural to industrial


economies. Uh so I think that uh by the end of the decade while we may see one or two million barrels fall in the OECD in terms of consumption and the mix will change from you know transportation to things that we use the energy for you know chemicals and uh you know you know all the things we do do you know you know my eyeglasses you know you know you know your computers your your keyboards you know there's so many things that have plastics in it that we use around us. So that's going to be what the you


know we'll be using uh while in uh Asia in the emerging world they will be using the the raw material and they will see 6 to 8 million barrels of demand growth. So you have 6 to8 grow there minus two in the OECD that's net growth. The industry is not spending enough money today to keep production flat. So if we want them to if we want the industry to grow production that means they need an incentive to do it an economic incentive which means rate of return which means prices have to go up to create that rate


of return. That really nicely ties together some of the topics from the beginning of the conversation. So thank you for going into that. And I want to make sure we get back over to the company. So I think you had mentioned a buy window approaching in June. And I want to ask you when when we're looking toward that, what types of companies would you be honing in on for for that time? Yeah, I think people should have u exposure to the different areas of the market, natural gas and natural gas exports. You know, they're going to do


well. The price of natural gas will firm up as LG Canada comes on, as the other projects come on. So, companies that are natural gas focused make sense. uh you want to be involved in oil especially because we have a tremendous resource base. We're one of the second or third largest reserves in the world. Um you know so we will be able to bring on more production efficiently um environmentally uh you know supportive of the of the industry. Um and then you want to be involved in the service sector because the industry needs the


drillers and frackers and that um and so then the question is do you want income? You can look at royalty trusts or you can buy companies with good dividend yields. Let me give you a few examples. Um you know you've got companies you know in the industry that are paying some very decent yields um and uh and also provide some good growth. So for example Whitecap which has merged with Veron um is paying a 73 dividend. Uh the stock yesterday was $8.52 providing you with an 8.6% 6% dividend yield and they're growing


rapidly in the Monty and the Duivere with both the natural gas and the liquids rich nature. They were 65% liquids, 35% natural gas. That natural gas component portion can go up. Um if you're looking at, you know, something in the infrastructure area, you know, to you know, you can find companies that are yielding you, you know, five and 6%. Um you know, you can go to you can go to an Nbridge. Um, Enbridge is yielding 6% right now. So, that's a good story for people. Um, you can look at a lot of


companies that are, you know, a little bit smaller. Um, and, uh, Vermillion Energy, 5% yield with operations in Europe, um, both in Croatia, Germany, and the Netherlands as well as in Canada as well as Australia. And on the service sector, you've got some very, very cheap companies. Tryan Well service pays a 4 and a.5% dividend. aggressive NCIB program nor of course issue a bid where they're buying back their stock um and the you know the company um you know is has minimal debt um and uh and uh you


know and if the fracking business picks up they have the most modern fleet DGB you know natural gas fired versus using diesel so there you know from a point of environment the companies like them uh I would throw another company at you termine oil uh termine of course has just been involved in that, you know, the Strath Kona natural gas sale. You know, the company pays 50 cents a quarter, $2 a share, plus regularly plays um you know, extra dividends on top of that. Um and uh so, you know, you're talking about a company um you


know, which is a $23 billion market cap. So, very very liquid stock trading at $63. Um and they were 605,000 BOE a day in Q1 and they talking about growing to 800,000 before the end of the decade. So you got a growth story there run by probably the best management team in Canada and then there's a lot of value companies out there. Um you know you look at a Bonta Energy um you know a Kitano um you know you know Obsidian where you've got great value there um in terms of the difference. So one of the measures I


look at is the uh book the the um net asset value the s the reserve value at and so the reserve value is now the reserve value for the end of 2024 done by GLJ Spruel um you know McDaniels those are the the main operators so for example Birchcliffe which is a natural gas producer has a $2254 NEV at the end of last year the stock traded yesterday at $642 so you're paying paying, you know, 30 cents on the dollar to reserves that other people are buying like we saw the deal uh that we just saw with Strath


Kona and uh the termine which I talked about $88 uh NAV and the stock trades at 63. So a discount to its NEV and as as you know the prices of natural gas goes up as their volumes go up those reserve values go up. So we think you know that stock has you know potential double between now and the end of the year. Bontterra uh 2144 NEV stock closed yesterday at 33. Uh you can look at a Kuwait which is a natural gas producer with a very strong growth profile. They were uh $3710 NEV at the end of last year. The


stock trades at 1675. So I've got a list of many many companies that fit those kind of same profiles where you can buy them at significant discounts to depressed NAVs based on low commodity prices because at the end of last year uh we were looking at you know 60s you know high 60s for the value and if we get to an 80 or $90 value uh reserve value 2 three years from now those reserves values go up plus growth in production growth in investment. Um, they pay down debt. That all adds to the to the value to the shareholders. And in


the meantime, many of these companies are paying you very nice dividends. Um, so you get paid while you're waiting. And you know, I'll just repeat some of those numbers. Uh, Nbridge is 6% yield. Freehold Royalties, which is a royalty company with Canadian US assets, 8.8%. Uh, White Cap I mentioned 8.6. Um you've got uh 9.9 on a surge energy which is a oil focused company. Um you've got u you've got a company um Petrus with a 9% yield. So there's a lot of decent companies out there. So people can go to


our website and see uh you know free complimentary copies of our research and if they if they own the companies they want independent views. What we do is we don't do like the institutions where you know they have 30-page reports uh and you know they analyze GNA per BOE and op cost per BOE transportation people on the retail individual side want to know why should I buy this story you know where could this thing be a year from now where could this thing be 5 years from now you know at the top of the


cycle from the bottom where we are now and uh you know the management own a lot of shares we want their money in before ours you know is it a discount to NEV is the balance sheet in good shape. So we cover the issues of how they did during the quarter like Q1. Now we then cover the is things we liked about what they're doing and then we put on another one um on that balance of evidence issues of concern. If we see insiders selling, if we see debt going up, if we see op cost going up, we mention that


and we say here's, you know, an issue that bothers us and we'll keep you informed from quarter to quarter. So that independent view for individual investors is important and that's why we created the product in 2017 and we've had very good growth, lots of support um and we we attach that to a conference. So a lot of times people you know own stocks and they they they don't have access to management. So if you know if they own a company and they're bothered by something coming to our conference in


Calgary in October which will be this year October 18th at Mount Royal University u they can talk to the CEO of Termolene or Serge or any of these companies Freehold and they can ask some questions about the company. That facetime will give you a comfort zone to own that stock to hold that stock for the cycle and and of course get good dividend income but get the you know but to be comfortable that you know the management that you've talked to the management and and that I think is a differential um differentiator from our


product versus others that are out there. Absolutely. Well, I really appreciate all the company examples. I think it illustrates all the the choices people have out there. And I'll leave a link in the video description to your services as well as the the conference details coming up. So very good to go over all of this. I think we've covered a lot in oil and gas, but before I let you go, any final thoughts that you would want to leave investors with? I know it's a very volatile time as we've


been discussing. Yeah, I what what I want people to take away from from this discussion on energy, but more importantly, we haven't had a commodity cycle since the 2000 1999 to08 cycle. And right now, commodities are in short supply. Be it copper, be it uranium, be it nickel, be it crude oil, be it natural gas. So, and you know, we know gold's had a a beautiful run. Uranium had a beautiful run backed off. Lithium had its its time in the sun. We're going to need a lot of those products between now and the end


of the decade. So, you want to have in your portfolio, sit down with your investment advisor and decide what resource waiting you want. And I would recommend you want exposure to uranium. You want exposure to, you know, the key middle metals like copper. Um, you of course everybody wants gold and you know precious metals in their portfolio. Uh, and then have a good waiting to energy. The biggest component of the CRB commodity research beller index is energy. So whenever you make the decision have some of each and if you're


conservative own pipeline infrastructure royalty trusts or or there's a high dividend yielding producers uh so you can get a good yield more than you'd get in the bank uh as well as you'd have the growth in the cycle. Uh but the key thing is I think this commodity cycle could last way into the next decade and it's important for people to have exposure in their portfolios. So um sit down with your investment advisor, decide what's appropriate for you given your age, risk profile um and you know


comfort zone uh but be involved in commodities because between now and the end of the decade I think it will be a very strong performer with outsized returns not five 10% I think 20 30% compounded rates of return are possible into the end of the decade. It won't be without volatility as we know, but if you buy a stock at a bargain level like we had in April, we may have in June and you hold it for the five years of the cycle or longer, um then you could have doubles, triples, quadruples. And if


people are saying, "Wow, that sounds insane." Pull up the charts from 2020 and see where the stocks went between March of 2020 and uh you know, and mid 2021. There were a lot of 10 baggers. I repeat that. 10 baggers. Go back to 2008 2009 after the financial crash. What did stocks do from the bottom into 2009 to the into the next year or two? Again, multiple baggers. That's what we have now is such cheap prices that when the game gets on 70 $80 oil for WTI, that's when you're going to see the start of


these big big wins. And I think people, you know, who who've made money in the past in the energy area or any of the other commodities areas, you know, gold has done no don't matter for investors this year, they know the the the torque and the and the and the leverage that these things have, you know, once they get over their break even price, you know, if if you're if gold is $1,100 and your costs are $900, but then all of a sudden you're now what 3,200 3,300 your costs haven't gone up much. that


profitability difference makes for much higher stock prices. Okay, I think that's a a perfect point to wrap up on. I know people tend to choose their favorite commodities and focus on that, but we've got all the commodities that are really going to be moving in the coming years. So, really good note to finish on and and thank you so much for coming to go over what you see happening right now. My pleasure, Charlotte. Of course. And and once again, I'm Charlotte Mloud with investingnews.com


and this is Joseph Shakar. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]