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Tuesday, September 1, 2009

Top Canadian Oil Investments for the Long Term

Top 6 Oil and Gas Investments in Canada

   The best way to invest in the oil sands of Alberta is to buy one of the many Canadian Oil Sands companies. There are so many oil and gas companies to choose from, so an investor needs to find a way to distinguish the stars from the dogs.

   Unless you have exceptionally deep pockets like PetroChina you are not going to be able to limit your risk in the oil sands by simply throwing money at it. For example, on August 31, 2009 PetroChina spent $1.9 billion to acquire a working interest in two of Athabasca Oil Sands Corp’s projects.

   The Oilsands are extremely capital intensive long term projects and are difficult to finance, especially with the restrictive amount of capital currently available in the stock market and bonds market. So, given that I currently have a portfolio size somewhere within the range of Joe Bum and Warren Buffet I will be focused on safety first and Black Gold Home Runs second.

   Before provide the top 6 oil and gas investments that I would consider personally, here is a list of 49 oil and gas related investments traded in Canada:

Addax Petroleum - [AXC.TO]
Alter NRG - [NRG.TO]
ARC Energy Trust - [AET-UN.TO]
Bankers Petroleum Ltd. - [BNK.TO]
Baytex Energy Trust - [BTE.TO-UN]
Birchcliff Energy Ltd - [BIR.TO]
Black Diamond Income Fund - [BDI-UN.TO]
Bonavista Energy Trust - [BNP-UN.TO]
Breaker Energy - [WAV.V]
Calfrac Well Services - [CFW.TO]
Canadian Natural Resources Ltd - [CNQ]
Canadian Oil Sands Trust - [COS-UN.TO]
Cinch Energy Corp - [CNH.V]
Cirrus Energy - [CYR.V]
Compton Petroleum - [CMT.TO]
Connacher Oil and Gas - [CLL.TO]
Cresent Point Energy - [CPG.TO]
Crew Energy Inc. - [CR.TO]
Crocotta Energy Inc. - [CTA.TO]
Daylight Resources Trust - [DAY-UN.TO]
Ember Resources Inc - [EBR.TO]
EnCana Corporation - [ECA.TO]
Enerplus Resources Fund - [ERF.TO]
Ensign Energy Services - [ESI.TO]
Essential Energy Services Trust - [ESN-UN.TO]
Fairborne Energy Inc. - [FEL.TO]
Harvest Energy Trust - [HTE.TO-UN]
Ivanhoe Energy Inc - [IE.TO]
Mullen Group Ltd. - [MTL.TO]
NAL Oil & Gas Trust - [NAE-UN.TO]
Nexen Energy - [NXY.TO]
Niko Resources Ltd. - [NKO.TO]
North Peace Energy Inc - [NPE.V]
Open Range Energy - [ONR.TO]
OPTI Canada - [OPC.TO]
Orleans Energy - [OEX.TO]
Pacific Rubiales Energy Corp. - [PRE.TO]
Paramount Energy Trust - [PMT-UN.TO]
Penn West Energy Trust - [PWT.TO-UN]
Petro Andina Resources - [PAR.TO]
Petro Bank Energy and Resources [PBG]
Petrobank Energy and Resources Ltd. - [PBG.TO]
Petrolifera Petroleum Ltd. - [PDP.TO]
Petrominerales Ltd. - [PMG.TO]
Progress Energy Resources Corp. - [PRQ.TO]
Savanna Energy Services - [SVY.TO]
Stoneham Drilling Trust - [SDG-UN.TO]
Suncor Energy Inc. - [SU.TO]
Talisman Energy Inc. - [TLM.TO]

   From this list my top 6 Oil and Gas Investments in Canada are the following:

1. Black Diamond Income Fund – [BDI-UN.TO]

2. Connacher Oil and Gas – [CLL.TO]

3. EnCana Corporation – [ECA.TO]

4. Paramount Energy Trust – [PMT-UN.TO]

5. Petro Andina Resources – [PAR.TO]

6. Talisman Energy Inc. – [TLM.TO]

   While the recession may be coming to an end according to the Bank of Canada, there is still likely to be a lot of volatility in the stock market. If you do consider investing in one of these companies do not do so blindly. Do some research! I usually at least take a look at news updates in Google finance, skim through a few analysts updates, and plot the long term, medium term and short term trend lines to get an idea of where I may want to enter and exit in the future.

4 comments:

Penny Stocks To Watch said...: If you like the energy complex you have to love canada for sure. Lot of good energy plays up your way.; September 1, 2009 at 8:59 PM
Unknown said...: I've just recently discovered your blog and have been enjoying reading it. The post today on the top 6 oil and gas investments in Canada is a good topic. However, you haven't indicated any of the criteria you used to come up with your list. Are these choices meant to complement each other in order to cover both oil and gas, and by specific play or region? For example, while Crescent Point, which you don't choose, seems more focused on oil, Daylight Resources seems more on gas. Some of these companies carry out most of their operations in Alberta (Birchcliff), while others, in BC (Nexen) or both (Encana). With Crescent Point's recent purchase of Wave, it seems to be positioning itself as a company that needs to be on this list.; September 1, 2009 at 9:21 PM
Smac20 said...: Basically, my analysis was based on taking the highest rated oil and gas companies, as rated by Thompson Reuters last week, within the list of 49 that I came up with. Then I plotted the long term, medium term, and short term trend lines to see if the up trends were still holding. The top six have been rated as a 9 or better out of 10 by Thompson Reuters—these ratings are based on a consolidation of a group of analysts following a stock; and have displayed unbroken long term and medium term up trends.

I hope this helps.

Thanks again,

Smac20; September 1, 2009 at 9:58 PM
Kevin said...: I just thought I'd add something that I found that may be very useful before you invest. There is a great resource to find financial solutions, including brokers and other investment specialist. It's called the Financial Standards Council and it is like a Better Business Bureau and provide reliability and ethic reports on various individuals and services within the financial services industry. If you are just getting involved in a new enterprise it is a good idea to do a little research and see what previous customer experiences have been with that organization or individual. The reports are free and could save you a lot of grief and expense. You can find their site at www.FinancialStandardsCouncil.com; September 3, 2009 at 8:50 AM