Market Call (Dean Orrico)

Market overview: Natural gas (contrarion view) he thinks it will go much higher; supply is so high though what is the catalyst? the headlines say there is a ton of gas; he doesn't think so as 13% of gas comes from shale; half of that in the Barnett Shale. Industrial activity much higher today than a year ago. He thinks EIA has overstated.

Drilling offshore costs will explode. Canada has second highest reserve level in the world. Onshore oil should be a great play relatively speaking.

Current top picks:
Nuvesta Energy (natural gas 28,000 boe/d 75% nat gas; at least half of that in the deep basin; good growth in production. Just announced divident; could increase the dividend. Mgmt owns 10% of the company

ARC Energy Trust - 55% gas today; acquiring Storm Energy. One of the first players in the Motney Shale formation. Convert to Corporation.

Bonavista; 7.8% are increasing their gas exposure. mgmt owns 15%; production growth should be very large.

Last top picks
Cdn Oil Sands Trust; oil weighted

Bonterra; oil weighted

6 to 12 months; $8 gas is the forecast for him. (spot was $5 at the time.)

Call ins :
Penn-West; Chinese are spending $300 million and getting 45% of the production; PennWest is getting 55% and not spending a penny. CIC can eventually may take over 100% in the future. INterest from China is growing by the day. Athabasca oil sands. Cutting distribution in half for dividends. So not a good income investment.

Boralex Power Income Fund - not keen on the power section bc very difficult to have accretive acquisitions. hydro assets are great. biomass of business has a lot of risk; biomass feedstock is down because of economy. Trustholders not really in a good situation.

NAL - owns it; mid tier mid quailty trust; partnership with Manulife. Bit of a lift is exposure to Cardium oil play; horizontal and multi fracking play; probably over bought on that. Long term a great play. 2011 probably a modest cut. Maybe 10 to 20% cut post conversion.

Connacher Oil and Gas - Maybe a takeover target? heavy oil play; don't play it. but production is ramping up in the next 12 months. Long life exposure to oil go somewhere else for now. wait and see if they can grow to 20,000 barrels/d. Asia capital will likely not flow here.

Bird Construction - floating around 30 dollars. Don't really own it. smaller cap with exposure to a cyclical industry. A major player out west and well positioned to take advantge of it. but priced into the stock already. Not much upside in the trading place. Short positions come in at 31.00. upside is limited. not an income and growth. but income ok.

Daylight Resources - competitive distribution around the $10. Stock should perform pretty well. Exposure in the Cardium play. mainly gas with some oil exposure. maybe $15 target price.

180 billion proven oil reserves in the alberta oil sands; Suncor and Syncrude has majority of it.

AOS - octagon capital has it as a 60 cent target. tough play because capex intensive

Mullen Group - logistics player in this space for the Oil Sands. Haven't acquired any competitors. Oil field services company in Alberta and for the Oil sands. Good buy 3 to 4% income. 12.5 cents per share. Cyclical. Tends to rise in the fall and winter on a multi-year chart.