whitecap resources inc. (wcp) $4.60 -0.06 wti oil $54.00 ... · whitecap resources. david pescod...

David Pescod 780.932.5183 Debbie Lewis 780.499.3933 February 6, 2019

Whitecap Resources Inc. (WCP) $4.60 -0.06WTI Oil $54.00 +0.34WCS Oil $44.76 +0.10

Several months ago in the good old days when oil was a t d e c e n t p r i c e s a n d everyone seemed to think it was going higher, you would turn on BNN or any other financial network and it was hard to see people not recommending Whitecap Resources. And then the p r i c e o f o i l c h a n g e d dramatically and so did the price of Whitecap, needless to say. But it's interesting right now to see what the analysts are saying about

the stock and how opinions just might be changing. According to the Globe and Mail Research, they suggest that of the eight analysts following the stock, the high price expectation is $12.75, the low is $7.50 and the mean target of these eight analysts is $9.03. Four analysts have a strong buy and four analysts have a moderate buy.MarketBeat is in the same game...following analysts, but needless to say, they seem to come up with a different number of analysts following the same stock and different ideas as to what may be happening next. According to MarketBeat, there are six analysts following this story with five buys and one strong buy and the consensus target is $10.80. But what MarketBeat does do is take a look at the analysts as they have changed their opinion in the last while. As we notice in the last two months, significant changes in Whitecap's expectations as on the 19th of December, Raymond James lowered their target from $9.50 to $9.00; Eight Capital lowered their target from $10.75 to $10.25; BMO Capital Markets reiterated their market of $13.00 and into the new year, on the 8th of January, the Royal Bank lowered their target from $13.00 to $10.00; Canaccord on the 10th of January lowered their target from $12.00 to $8.00 and Haywood lowered their target from $10.50 to $9.00.First of all, when you look at where the stock is currently, any one of those numbers would be more than gratifying, but also interesting to see how dramatically in a somewhat different oil price environment, adjustments have been made.

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Whitecap Resources

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Cameco Corp. (CCO) $16.74 -0.27Uranium

W e a r e n o w a p p r o a c h i n g eight years since the Fukushima disaster in Japan where a tsunami laid waste to the F u k u s h i m a Daiichi reactors, causing three to melt and putting f o u r o u t o f operation. It is estimated that 100,000 people h a d t o b e evacuated and the number of d e a t h s v a r y g r e a t l y -

anywhere between one and 1000 with most people leaning towards the higher number, because of problems related to relocating people from near the disaster site. Since that disaster, the price of uranium has been ever weaker and spent much of 2016 and 2017 near the $20.00 mark, with the occasional upward or downward motion. For sure, uranium and nuclear power has been out of vogue ever since the disaster.But now we see the price of uranium flirting with the $30.00 level, a price that seemed almost impossible a year or two ago. Having said all that, to find and open a new uranium mine these days would probably demand prices of closer to $60 or $65 a pound. What has been keeping the uranium market supplied seemingly forever, has been old, Russian nuclear missiles disbanded and creating a massive inventory over the last few years. All of a sudden, those inventory numbers are heading down, at a time that an increasingly large number of nuclear plants in China are in the development stage or about to open and the demand could be significant.It's not a straight-forward story however, as many nuclear plants in the United States are now nearing the end of their suggested life, which can always be fixed up and altered, but these are not cheap operations to work with.


While information and opinions expressed in this publication are believed to have been gathered from reliable sources, we accept no liability for actions that you might take in response to the material presented. Because the use of the information presented is

relevant to the facts of your personal situation, you should seek the advice and services of a qualified professional who will take your personal situation into consideration in guiding

your actions.

Cameco Corp.




As far as the future though, when you still see those clouds of smoke and dust throughout India and parts of China, you know that uranium does have a future and suddenly it seems to be coming in vogue followers in the scientific community are suddenly becoming more positive about the fuel. Coal power for sure is frowned upon by just about everyone and is certainly one of the dirtiest sources and folks like myself, absolutely hate the bird-whacker...the wind-power turbines you see that only provide power when the wind blows, kills birds and when they come on stream, you must turn off alternative sources. Ridiculous!Now take a look at the chart on Cameco Corp. and it is telling you that as it hits new highs, there is renewed interest. Not a lot, but there is renewed interest in the future of uranium. Back in the good old days, Cameco supplied almost 18% of the world's supply of uranium, although it has shut down much of their operations, but could easily be reopened should the price of uranium continue its upward route.

B2Gold Corp. (BTO) $4.00 -0.07 NuVista Energy (NVA) $4.06 +0.01BonTerra Energy (BNE) $5.74 -0.14Seven Generations Energy (VII) $10.74 +0.19

It's the time of year you see many of the brokerage houses putting out their picks for the coming year. One should be mindful that many of those picks issued this time last year, weren't all that enjoyable or profitable. But, it's the time of year that you look forward to these being written and we notice Cormark Securities, one of their picks for the coming year is B2Gold, a favourite in the gold sector. Analyst Richard Gray makes these four points:

• B2Gold has an attractive growth profile that will see production increase by 53% in 2018 to over 960,000 oz with the start-up of the large, low-cost Fekola mine. The company’s AISC is among the lowest of its producer peers at US$787/oz (estimated) in 2018.


10-year Uranium Chart




•We expect Fekola to drive an inflection in company FCF to around US$200 MM in 2018 and US$160 MM in 2019 (from negative US$271 MM in 2017). The mine continues to exceed expectations and the company will be releasing the results of an expansion study by year end. •BTO’s balance sheet remains stable, with cash ending Q3/18 at US$92 MM after accounting for repayment of the convertibles... •We believe B2Gold could be a takeout candidate, in particular

for the Fekola mine. Now wouldn't that be nice. As we've mentioned before, we don't have many gold shares, but B2Gold is one of them and Cormark are not the only group suggesting this as a potential take-out candidate. For those thinking that a $4.00 stock doesn't look that expensive, just remember there is a lot of stock outstanding. This company has a market cap of close to $4 billion. Meanwhile, in case you are curious about Cormark's suggestions for the oil and gas sector, NuVista was one of their picks with an $11.57 target and BonTerra - hurting like so many other oil and gas stocks recently - is amongst their picks with a $19.00 target (oh, some of these targets sounds so appealing, don't they?) and Seven Generations Energy which they have a lofty $22.00 target on, which would be more than a double.

On their Seven Generations Energy pick, analyst Amir Arif writes:

• Sustainability improving: As VII slows its growth trajectory, the underlying decline rate also slows down, providing a more sustainable business model that should be able to generate free cash flow while still growing production in the mid-single digit range.

• Highly economic inventory increasing: The Lower Montney, Nest 3, and step-outs into Nest 1 w i t h n e w e r c o m p l e t i o n approaches are providing more inventory that has s imi lar e c o n o m i c s t h a t N e s t 2 provides...

• Valuation, leverage, and free cash flow: Based on strip prices, VII is trading at 4.4x 2019 strip...

We followed Seven Generations Energy because we own some of their bonds, which provide a very tasty return...at least at current times.


Seven Generations

B2Gold Corp.




THE RESULTS ARE IN:

Some Comments from Readers:From K.S: I couldn’t select just one…

From D.C: Dave missed one........the refugee problem.....inviting the world to just “pop in”....no problem.

From E.V: Where’s the button for all above?

From G.D: All eight options make me just as riled up. Trudeau has proven himself to be incompetent and short-sighted in every way. But it’s government, expect to be disappointed.Nothing will change until the people in the provinces get more riled up. Few want to rally for change, because it is easier to sit on the couch and do nothing.I applaud you and Dave for your articles revealing and arguing for the other side of the debate. Our electoral district in Ontario has gone PC federally and provincially for over 12 years now, from hugely Liberal for many decades in the past. We wait for the rest of Canada to

swing to be with us, to counter the economic and social suicide the country and our elected twits are committing.

Thank you for your comments folks!






Deb’s Ditty:

All I’m saying is I’ve never seen my ex and satan in the same room…



whitecap resources inc. (wcp) $4.60 -0.06 wti oil $54.00 ... · whitecap resources. david pescod...

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