With the 4Q 2012 earnings results out of the way, investors will shift focus to upcoming strategic actions by Forest Oil (FST) beyond the $600 million in asset sales in 2012.

Potential sales of Permian acreage and other undeveloped acreage could yield asset sale proceeds of $500 million and lower the implied EV/EBITDA multiple from 6x to 5x in the near term.

FST guided oil production to be up strongly (+30%) in 2013 as all drilling capex will be focused on oil drilling. Gas drilling and NGL focused drilling has been shut down completely, the overall production growth rate was not mentioned in guidance but total production guidance looks to be a modest (5-10%) decline in total production, but with 2H 2013 production being higher than 1H 2013. Presumably total production (not just oil) will be sustainable from 2H 2013.

Expectations were low for production growth as capex has been

Petrobras - Not Too Late to Sell

Investors should sell Petrobras (PBR) stock and buy credit protection as oil production growth is proving elusive despite heavy capital spending. PBR bulls continue to point to massive oil potential in giant offshore fields, but in the meantime, Brazil's domestic politics and high inflation are forcing PBR to shift money out of the company's cash flow to subsidize domestic fuel (gasoline and diesel) prices. With an election looming and inflation rising it is unlikely that the PBR will get the big fuel price hikes it wants and needs.

PBR Premium Multiple Unjustified

Investors should not be paying 7x EV/EBITDA to own PBR given the lack of oil production growth in 2013 and a government that is taxing minority shareholders to fund domestic fuel subsidies. A more appropriate multiple would be 5x, which would lead to a single digit share price. With large cap

Lone Pine Resources (LPR) is a small cap Canadian oil and gas producer trading at about $1. After LPR's IPO in May 2011 and subsequent spin-off from Forest Oil (FST), LPR shares traded down and never looked back. With the stock left for dead on balance sheet fears, any positives could push LPR up to between $2 and $3 per share this year. Multiple catalysts are on the horizon, with already closed asset sales providing ample liquidity, balance sheet repair and importantly plenty of time to execute a value maximization process.

The key to the LPR investment case is that the company has sold nearly $100 million in assets and repaid bank debt, which greatly reduces risks to the company's senior bank lenders. Bank debt/EBITDA was reduced from an uncomfortable 3.0x to more acceptable 1.8x. Happy bank lenders mean LPR has much greater financial flexibility.

LPR Stock is a call