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  • Now Is The Time To Own The Oil & Gas Leaders: Keith Schaefer

    U.S. shale oil producers have responded to the oil price collapse so quickly, and with such discipline, that they've shown they are able to turn production on and off as if with a light switch. As Keith Schaefer tells The Energy Report, that means it's time to be nimble, and to keep small positions until oil finds a stable new price level.

    The Energy Report: Keith, the first U.S. grassroots refinery in nearly 40 years just began operation in North Dakota. Is the growth in U.S. oil production going to catalyze refinery construction?

    Keith Schaefer: I'm going to say no. U.S. production has peaked and we're doing just fine, so I don't see any great need for more refineries right now.

    There was talk a couple of years ago, particularly in 2012-2013, that with unbridled shale oil growth we would need more refineries. But the producers have been more disciplined than anybody expected in the last three months, with the rig count declining sharply and then staying down. I think we're going to see a drop in U.S. production, so I don't see the need for any new refineries right now. The only thing that could change would be even more demand growth, which we're seeing because of lower prices. Somebody might get the idea that we need another refinery to meet that demand.

    Right now, refinery crack spreads are actually very good. They're $20-25 per barrel [$20-25/bbl], which for this time of year is fantastic. But I don't know if that's good enough to warrant somebody spending tens of billions of dollars to build something new. The other thing is that the refinery industry has been pretty good at incrementally adding light oil capacity around the country. A thousand barrels a day [1 Mbbl/d] here, 2 Mbbl/d there-that has added up over the last two or three years. I don't know what the exact number is, but certainly there's been no problem in getting gasoline to market, as you can tell by the big drop we've had in gasoline prices over the last six months.

    TER: Is the gasoline price going lower?

    KS: No, I don't think the price is going lower. We've had a nice little rally in the last month, with oil prices back to about $60/bbl on the WTI [West Texas Intermediate] and almost $70/bbl on Brent.

    I think it's important that investors realize the gasoline price is based on Brent pricing, not on WTI. We're exporting more gasoline-refined products out of the U.S., so we're competing with foreign buyers for our own energy. I think that's why gas prices are a bit higher than people think they should be; they keep thinking about WTI, not Brent.

    TER: The new U.S. production is lighter than what U.S. refineries were designed for. Are the U.S. refiners retooling?

    KS: Well, a bit. Like I said, you're getting 1 Mbbl/d here, 1 Mbbl/d there, of light oil capacity. Refiners are also trying to increase the amount of distillates they produce, because generally that's a more profitable product-jet fuel and diesel fuel, which is what Asia uses. Asia runs on diesel. That's definitely Brent pricing, so there's more margin in that. Everybody's been trying to reduce heavy oil. The big exception would be BP Plc's [BP:NYSE; BP:LSE] Whiting, Indiana, refinery, which just went from mostly light oil to mostly heavy oil.

    TER: How has the delay in approval of the Keystone XL pipeline and resistance to Canadian pipelines going both east and west affected Canadian oil sands producers?

    KS: So far there is not much impact. The heavy oil discount is quite tight right now because the Gulf Coast is getting a lot of Canadian oil that it never used to get. Enbridge Inc. [ENB:NYSE] has got the Flanagan South Pipeline moving, so it's able to bring 300-350 Mbbl/d more Canadian crude straight to the Gulf Coast than it used to. That's not quite as big as Keystone, but between what rail has done in the last two years, going from zero to just under 200 Mbbl/d, the incremental oil sands production has been able to find a way down to the Gulf Coast. There's actually more Canadian oil now going to the U.S. than ever before. That's great news for Canadian producers.

    As you said, most of the refineries down there are geared toward heavy oil. Keystone probably will start to be important next year or the year after. Rail and the Enbridge Flanagan South line bought Canadian producers one to two years' grace on their growth in production. It's going to hit the wall again very quickly because oil sands production is going to rise anywhere between 50 Mbbl/d and 120 Mbbl/d every year for the next five or six years. Keystone will come back into importance fairly quickly.

    TER: Is refinery construction on the table in Canada?

    KS: Oh yes. The Alberta government is building a refinery, the North West Upgrader. I think it's relatively small-somewhere around 75 Mbbl/d. But from private industry, there is just no appetite for a refinery in Canada. You need a big petrochemical complex surrounding your refinery complex, and you just don't have that in Canada. The refineries are either in Edmonton, Alberta, or in Sarnia, Ontario. Sarnia has a petrochemical complex, but with the government there now, you're never going to see another refinery in Ontario. You might see one in Alberta, but, again, it's not going be as economic because it would just be producing gasoline, and not as many petrochemical products.

    TER: Speaking of Alberta, how will the election results there affect refiners and oil sands producers?

    KS: I don't know if it's going to affect oil sands or refineries that much. Because of the dirty oil moniker, if there's one thing the New Democratic Party [NDP] government might go after, it's trying to get the image of the oil sands in better shape. I think stronger environmental rules could really help the industry in the long run. That's going to cost some money, and potentially put a crimp into some cash flows. The producers don't want to disturb their tailings; they just want to plant poplar trees over them and let them go back to nature. I don't know if the NDP is going to allow that.

    From a tax point of view, I don't think the elections are going to make much difference. There is talk about raising corporate income taxes, but the reality is that most, if not all, the producers lose money every year on an accounting basis. There's not going to be much impact for the oil patch. Royalties could go a little higher, but I don't see them going much higher. Honestly, the fear is greater than what the reality will be. The bark is worse than the bite.

    TER: Has the price of oil found its new level?

    KS: I think there's a strong argument the price is going to actually pick up over the next eight weeks. The harsh drop in the rig count in the U.S. should now translate into a pretty significant drop in U.S. production, which we'll see each Wednesday when the U.S. Energy Information Administration [EIA] numbers come out. The EIA numbers for the next 6-10 weeks have the potential to drop quite a bit. The Street is very short-term-oriented right now. I think the market could take oil a lot higher than people would suspect because of the emotion that will follow the drop in U.S. oil production in the next 6-10 weeks.

    Here's what I tell my subscribers: Right now there are many crosscurrents in the market, but two things have happened that were a bit of a surprise to the market so far this calendar this year, and both of them were bullish.

    One was that demand has picked up way more than anybody expected, way sooner than anybody expected. Before the oil price crash in late 2014, the market was seeing lots of stories about how oil demand was inelastic to price. It didn't matter what the price of oil was, demand didn't change much at all. You can throw that idea out the window. Even by January that had been completely debunked, and we were seeing 300-500 Mbbl/d or more increase in demand in the States. Right now, we are seeing 700-800 Mbbl/d more demand in the U.S. over last year. When you consider that production is up 1 MMbbl/d, the surplus doesn't look like such a big deal anymore.

    Internationally, we're starting to see some big stats as well. China's up 250 Mbbl/d. Japan's up. Korea's up 110 Mbbl/d. They haven't been able to see the same benefit in the drop of oil that we have because the rising U.S. dollar has taken a lot of that away. Demand has been a big surprise.

    Second, as I said, nobody thought the U.S. producers would have the level of discipline that they've had in dropping the rig counts through this calendar year. The market has been stunned that we're continuing to see rig drops week after week. We had that one big month-February-with 90 rigs a week getting dropped. Even now, it's at least 20 rigs. In Canada, for example, there are only 16 oil rigs working-in all of Canada! That's stunning to me.

    So when we talk about where the oil price is going, nobody knows. When you canvass the analysts, the smartest guys on the Street, the numbers are all over the map. The oil price has jumped 50%, from $40/bbl to $60/bbl. Is it over? I don't know, but I would say that demand's been higher, and it looks like supply is going to be a little bit lower than what everybody thought in January.

    I think we're going to have relatively bullish production numbers and inventory numbers in the States by the end of Q2/15. The numbers could be bullish enough that companies might start to bring rigs back. It's only going to take one or two weeks of the U.S. adding 30 to 50 rigs to put a big stop in the oil price rise.

    I think in the short term-really short term, toward the end of Q2/15 and in early Q3/15-oil can go higher. The U.S. industry has shown that it is so flexible and so adaptable it can bring rigs off and on like flipping a light switch. It's just amazing. Any opportunity these guys have to lock in good margins on their hedging programs at $65-70/bbl oil-if it gets that high-they're going to do it, and rigs are going to come out.

    TER: What are you forecasting on the oil price for this year?

    KS: This is going to be one of the choppiest years for oil we've seen in a long time. Everyone had such confidence in the Saudis' massaging and managing the oil price for the last four years, and the Saudis did do that. We had a very, very tight range for oil from 2010 through to the end of 2014. That's out the window now. It's going to be a lot more volatile.

    I think you're going to see a lot of head fakes, both bullish and bearish, this year. If you talk about whether the price could find a level late this year, I'm going to guess that's somewhere between $60 and $65 per barrel WTI. At that price the big guys have the scale-they can make money. And little guys can't. The high producing core areas of the big plays make money, and the fringe areas don't, so these prices don't warrant spending a lot of money on the fringe.

    TER: Let's talk about some of the companies that you are most familiar with.

    KS: Rock Energy Inc. (OTCPK:RENFF) [RE:TSX] had a great year last year because of its big light oil discovery. The only problem was that the company spent a lot of money in Q4/14 drilling that up as the oil price was collapsing, so its debt levels got pretty high. But it has just figured out a key component to increasing production out of its wells. The company has been adding a lot more sand and getting much better results.

    Rock had to raise money at the bottom, but it still only has 50 million [50M] shares out. You know you're investing in a company that has lots of leverage when it has 50M shares out. The company has been able to hold production steady at 5 Mbbl/d, and actually makes good positive cash flow on that. With Rock, you've got great positive cash flow at these prices, and a real turbo charge in its light oil play if oil prices come back up.

    TER: Can you mention another company?

    KS: This is a year for small bets. With the uncertainty and volatility around commodity prices, there's no point in making any big bets this year. Legacy Oil + Gas Inc. (OTCPK:LEGPF) [LEG:TSX] is a Tier 2 producer in Canada that has just enough debt to be outside the market's comfort zone, but if oil goes back to $80/bbl, its debt levels actually come in line. In addition, the company has an activist investor group with quite a track record of creating value.

    TER: FrontFour Master Fund Ltd. is nominating a slate of directors for Legacy. Is that something that investors should be worried about?

    KS: No, they should be excited about it. Last year, this investor group ousted the Renegade Petroleum board, sold Renegade to Spartan Energy Corp. [SPE:TSX], and Spartan took that asset and improved production so fast its stock doubled in about three months.

    The team at Legacy has lost the Street a bit. For a couple of years, Legacy's reserve reports didn't keep up with spending, and so the Street has slowly abandoned the team. The straw that broke the camel's back for FrontFour, and a few of the other investors in the company, was when the board decided to guarantee CEO Trent Yanko's personal loan for some stock.

    Would the company be able to perform better with a different management team? I don't know. But I would say that the market has great respect for the asset base, particularly in Saskatchewan. Even the Turner Valley asset in Alberta is a very low-decline asset, which is what the Street likes right now. I think it's a case where the sum of the parts is greater than the whole. Because of the anticipation of what FrontFour and the other investors might be able to do with the company, Legacy should have an extra bid under it this year.

    TER: With the uncertainty in renewable fuel policy and the question of using a food crop for energy, is ethanol a smart investment?

    KS: The reality is that ethanol right now makes sense. Even if the renewable fuel standard [RFS] didn't exist, there would still be an ethanol industry. It might not be quite as big as we've got right now, but there would definitely still be an industry, because ethanol produces octane cheaper than anything else.

    Valero Energy Corp. (NYSE:VLO) is invested in corn ethanol in 11 plants. Ethanol didn't make any money for Valero last quarter, and the stock still had a fantastic run-up to pretty much all-time highs. The crush spread for ethanol through the rest of this year is actually pretty good. It's in the mid-$0.40 per gallon range. Valero produces more than 1 billion [1B] gallons of ethanol per year. Going forward, ethanol should actually be quite a positive contributor to Valero's top line, and especially to the bottom line. Not only that, Valero has shown that it actually gets better margins and pricing than most of the pure ethanol producers. It's a pretty smart cookie in that division. I think ethanol is going to be a big positive for Valero for the next three quarters.

    TER: Can ethanol compete with crude at current prices without mandates?

    KS: It absolutely can. But the reality is that it's a political issue. If the renewable portfolio standard were withdrawn, there would be a large contingent that would just stop using ethanol altogether. Certainly the integrated refinery companies would have no incentive to use it; they should use their own oil. But groups like Valero, which aren't as integrated, or the independents, like Marathon Oil Corp. [MRO:NYSE], Northern Tier Energy LP (NYSE:NTI) or Alon USA [ALJ:NYSE], would continue to use ethanol as much as possible because it makes economic sense right now. If we ever went back to a situation like 2012, where there was a drought, corn prices spiked, and it made no economic sense to use ethanol, these companies would drop ethanol like a dirty shirt and go straight with oil. That would absolutely have a big impact on the industry. The RFS really only kicks in when corn prices are high. The ethanol market works on market-based economics when corn is this low in price.

    TER: Valero's share price since February has been at its highest 52-week level. What's driven that performance?

    KS: A couple of things. Ethanol last year did great. And now Valero and all the other refiners are seeing the pipeline stocks in the last 3-4 years do really well. Those stocks have the best charts in the industry. And there's almost no volatility in them. They have been the best-performing stocks you could ask for in an energy portfolio. The multiples are very high because the Street likes a steady tolling charge. It doesn't like revenue based on commodity risk.

    What we're seeing now is refiners saying, "Hey, we want to have those bigger cash flow multiples, like the pipeline stocks. They're stealing our lunch. We're going to integrate our own logistics into a separate company. We're going to take every bit of revenue we get that's not commodity-related and put it into a master limited partnership [MLP] structure, which gets a much higher multiple like midstream or pipeline companies."

    Valero, in particular, has a lot of assets. It's one of the biggest refineries in the States. It figures it's going to be able to add almost $1B/year in assets in the next five years to put into these higher-multiple MLPs, where the cashflow multiple is going to be a lot greater. That's a great extra uplift underneath the stock for the next three or four years.

    TER: Has Northern Tier Energy done better or worse since Western Refining Inc. [WNR:NYSE] bought out its managing partner share?

    KS: In some ways, better. Fundamentally, the company has outperformed. Northern Tier is a one-refinery company in Minnesota. Before Western Refining took it over, it always underperformed financially against the bigger industry benchmark for that area, which is called PADD 2. Since the Western Refining guys have taken it over, the company has done a much better job at running the business and has been able to outperform the benchmark. I say kudos, because the stock value increase for Western Refining over the last five years is $5/share to $45/share. I'm so excited to have that team at the helm of Northern Tier. I think it's going to do fantastic.

    TER: What is the major trend in your advice to your newsletter subscribers now?

    KS: Caution and small positions. Pretty much everything we bought in 2015 is up, simply because the commodity prices have done better than I expected on both the oil and gas. Now is a time when I think we need to be very cautious, stay in lots of cash. A fat pitch, as Warren Buffett says, will come into the market that we should be able to latch onto. Right now that's hard to see. Just stay in cash. Stay in small positions, and only own the leaders. They always have a higher valuation, but you always buy up in a down market. Buy the leaders and have patience.

    TER: Thank you very much for your time.

    This interview was conducted by Tom Armistead of The Energy Report and can be read in its entirety here.

    Keith Schaefer is editor and publisher of the Oil & Gas Investments Bulletin, which finds, researches and profiles the growing oil and gas companies that Schaefer buys himself, so Bulletin subscribers know he has his own money on the line. He identifies oil and gas companies that have high or potentially high growth rates and that are covered by several research analysts. He has a degree in journalism and has worked for several Canadian dailies, but for more than 15 years has assisted public resource companies in raising exploration and expansion capital.

    Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Interviews page.

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    DISCLOSURE:
    1] Tom Armistead conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
    2] The following companies mentioned in the interview are sponsors of Streetwise Reports: None. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
    3] Keith Schaefer: I own, or my family owns, shares of the following companies mentioned in this interview: Rock Energy Inc., Legacy Oil + Gas Inc. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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  • Four Canadian Juniors Poised To Gain In The Oil And Gas Recovery: Angelos Damaskos

    With crisis comes opportunity, as the saying goes, and Angelos Damaskos, principal adviser of the Junior Oils Trust, has capitalized on the panicked selloff of junior oil and gas companies to build positions in four promising names in Western Canada. In this interview with The Energy Report, he explains why oil prices could reach $75 per barrel in the near future, and why companies making good money now will make much more on the upswing, with great benefits to shareholders. In addition, he highlights two Australian companies with highly prospective projects.

    The Energy Report: The prices of West Texas Intermediate [WTI] and Brent have recently rebounded to about $60 per barrel [$60/bbl] and $65/bbl, respectively. Where do you see them going for the rest of the year?

    Angelos Damaskos: The oil industry expects oil to recover to $75/bbl in the near term because this is the global marginal cost of production. The longer oil trades below that price level, we lose supply not only from the North American shale industry, but also from the longer-term producing projects: the Canadian tar sands and the Brazilian offshore basins.

    The oil price has recovered by 20-25% from January's lows but remains 50% lower than last year's highs. As a result, there has been a dramatic drop in income and earnings, which has been met with big cutbacks in capital expenditure [capex] and development drilling. The length of time oil trades below $75/bbl is a clue to how strong the recovery might be once a supply-demand balance is again achieved.

    TER: With regard to shale oil, some believe that the oil price collapse has broken that industry for the foreseeable future. Do you agree?

    AD: I do not. Shale oil technology has advanced tremendously over the last few years, which is why production has advanced so rapidly. It is now far easier to map and understand the geotechnical characteristics of shale reserves. It's purely a matter of spending the capex necessary to develop as many wells as possible to increase production. The minute oil prices recover to $70-75/bbl, or perhaps a little higher, shale drilling will recommence almost immediately.

    TER: Some blame the oil price collapse on lack of demand. How much do we know about oil consumption?

    AD: It's not clear what caused the collapse. We believe it might have been a demand shock resulting from a slowdown of the Chinese economy or in some of the emerging markets. This, combined with a rapid growth in production, particularly from North America, might have tipped the balance to oversupply and sparked the initial price drop. Then the momentum traders and the hedge funds got involved and pushed prices down to the $40-45/bbl we saw in January.

    The International Energy Agency [IEA] and other reputable bodies indicate that oil demand remains steady and might have actually grown in 2014. The IEA projects slight growth in 2015. If we accept that global economic growth has stabilized, demand for oil should remain fairly firm and might actually be further stimulated by today's lower prices.

    TER: In contrast to the price of oil, there has been no rebound in the price of natural gas. Why not?

    AD: We have been fairly bearish on U.S. natural gas for some time given the oversupply from shale projects. Gas production growth has exceeded 30% over the past five years. Until the very large liquefied natural gas [LNG] export facilities planned in Western Canada come onstream, low prices will likely prevail.

    European gas prices trade much closer to the equivalent per-crude-barrel price because European uses of natural gas have evolved over a much longer period of time and do not suffer from infrastructure constraints, legislative tariffs or bans on trade flows.

    TER: Elite opinion in Western Canada is strongly against new pipelines and energy export facilities. Is it possible these facilities could be prevented for political reasons?

    AD: We believe that economics will prevail eventually, and persuade the people and their legislatures to permit the infrastructure necessary to Western Canada's energy resources. Keep in mind that large-scale natural gas production is a relatively recent development in British Columbia [B.C.], so it will take some time for the population to resolve the political issues engendered by this development.

    TER: How bad do you expect the Q1/15 earnings reports from the majors will be?

    AD: The latest reports across the board for major producers have reflected the sharp drop in oil prices. In a few cases, short-term hedging may have provided some insulation, but the reality of the scale of lost income is likely to be shown in the Q2/15 reports.

    TER: Will this lead to an increase in M&As?

    AD: The proposed takeover of BG Group Plc [BRGYY:OTCQX; BG:LSE] by Royal Dutch Shell Plc (NYSE:RDS.A) illustrates the opportunity available to cash-rich companies. Shell, like other supermajor, integrated companies, has been suffering from declining reserve life and insufficient production replacement for years. Its 2014 reserves replacement ratio was 49%, of which only 17% came from exploration. Meanwhile, its 2014 reserves life index declined to 11 years from 12.3 years in 2013.

    TER: Do you believe that Shell's takeover of British Gas was a good decision?

    AD: In the present environment, it is cheaper to buy proven reserves than pursue expensive and risky exploration. British Gas carries substantial debt and had to take huge writedowns as a result of the price drop because many of its assets have been impaired. Nevertheless, BG offers Shell very large proven reserves and production in a global portfolio, as well as attractive development projects in emerging regions such as Australia and Brazil. Shell got BG at a very attractive price, and this deal sorts out its declining reserves problem. Shell also gains a much-larger global presence and will likely realize savings deriving from the elimination of duplicated functions.

    Shell expects the oil price to recover to $90/bbl by 2018. So the industry is fairly bullish on long-term oil prices, and we expect the pace of M&A to accelerate.

    TER: What do you make of the rumors of a possible takeover of BP Plc (BP)?

    AD: I don't think anyone would be interested in taking over BP, frankly. This company still suffers from a huge overhang from the Macondo disaster in the Gulf of Mexico, with the potential of a huge liability settlement with U.S. authorities. BP also has large exposure in Russia with its TNK joint venture, which, given the sanctions against that country, would preclude any majors touching BP. In any event, there are far more attractive targets than BP.

    TER: You have said your investment philosophy in energy is based on the idea that "smaller oil and gas exploration and production [E&P] companies tend to outperform their larger counterparts." Can we expect these smaller companies to do even better vis-à-vis the larger companies in the near future?

    AD: Generally, smaller oil E&Ps can outperform on the upside. They can, however, also underperform in a bear market, with small caps dropping by more than 50% in the last six to nine months. It is well understood that when oil markets are in a crisis, investors tend to sell the smaller caps first.

    These selloffs have historically produced great buying opportunities. The majors have suffered less due to their diversification in storage, transportation, refining and retail operations, but they will also be less responsive when prices rise. As oil prices recover, the recoveries in small caps could be startling, but investors must exercise extreme caution, as not all boats will rise with the tide.

    TER: What are the attributes of bargain energy juniors?

    AD: The main attribute of an energy junior is that it is primarily E&P-focused. The full spectrum of its operations is focused on buying acreage, proving up, and producing oil and gas. That gives the junior much higher operational leverage to the oil price. For instance, a junior U.S. E&P with a $45/bbl marginal cost of production now makes about $8-9/bbl in profit. So if oil rises to $65/bbl, its profitability more than doubles.

    Unfortunately, leverage can be manifested financially as well. E&Ps reliant on the public market for funding are likely to suffer for long periods in this environment. Investors will be unwilling to pay for risky exploration given the apparent oversupply, even if it is understood to be short-term. Over-indebted operations will be forced to battle with bondholders and bankers, in the meantime paying high fees and costs that could have very detrimental effects on their operations.

    TER: Many of the juniors hammered by the markets in the last six to nine months boasted low costs of production, healthy margins and good management. Will such companies need to wait for oil to reach $75/bbl before their shares recover?

    AD: Investors tend to sell indiscriminately in times of panic. However, as we have seen oil prices rebound in the last three months by 20% or so from January's lows, some of the better small caps have seen their share prices double.

    TER: How has the weak Canadian dollar affected Canadian oil and gas producers?

    AD: It has been a bonus to domestic producers. The Canadian dollar has depreciated 22% against the U.S. dollar since 2012. This has reduced labor and other supply costs for producers and increased the value of U.S. dollar-denominated sales.

    More important is that the oil-price collapse has resulted in a great deal of idle capacity in drilling and other service companies. As exploration and drilling have fallen dramatically, service providers have been compelled to lower prices. Drilling costs have decreased by 25% as a result, and could fall a lot further.

    TER: Will Canadian producers benefit from the "dollar discount" long-term?

    AD: We strongly believe that the Canadian dollar has been oversold. Global investors have preferred U.S. dollar assets because of the perceived security and safety of the U.S. economy. However, the multitrillion-dollar debt that the Fed carries on its balance sheet is unlikely to ever be repaid given the U.S.' current and projected economic growth rates. As a result, the Fed is likely to favor depreciation of the U.S. dollar.

    In addition, the Canadian dollar historically has been closely correlated to the oil price because the Canadian economy is so reliant on oil exports. Therefore, an oil price recovery should strengthen the Canadian dollar.

    TER: Let's get into specifics. Which are your favorite Alberta oil and gas juniors?

    AD: We have taken advantage of recent weak equity values to strategically deploy cash reserves in our portfolios. One of our latest and largest holdings is in Yangarra Resources Ltd. (OTC:YGRAF) [YGR:TSX.V], which operates in the Cardium, one of Western Canada's most economic oil regions. The company recently announced a 114% increase in its 2014 reserves while keeping finding and development costs of developed producing reserves at $26.36/bbl, with a recycling ratio of 1.6 times. Its 2014 production/replacement ratio was 179%, while its Proven and Probable reserves life index increased to 34 years. These are exceptional results. Companies such as Yangarra are not only able to survive in a low-price environment-they also have long-term viability and the long-term potential, if prices recover, to grow production dramatically over the next couple of years.

    TER: Yangarra announced a $20 million [$20M] bought-deal financing on April 28. How strong is its balance sheet?

    AD: This is a prudent company. It has low debt, but it likes to boost its reserves. Its share price is up 100% since January. It took advantage of this recovery to raise some equity to have more firepower to do deals. It is best positioned in its territory to consolidate and buy weaker competitors, enhancing its acreage position and making it even better positioned to grow reserves and production when oil prices increase. In this environment, the best approach is to raise equity rather than debt.

    TER: Which other Alberta juniors has the Junior Oils Trust invested in?

    AD: Two. The first is RMP Energy Inc. (OTCPK:OEXFF) [RMP:TSX], which produces approximately 44% oil/56% gas in west-central Alberta. Even though it has cut its capex program by half, RMP still expects to grow its production by 10-20% in 2015. Like Yangarra, it has little debt, and its debt-to-cash flow ratio is well under 1:1, meaning it could pay debt back in less than a year. It expects to generate 2015 free cash flow of more than $100M at $50/bbl. RMP is another company that will live to prosper when the price of oil recovers.

    TER: RMP shares lost 50% of their value from February to March, falling from $5.50 to $2.75/share. Shares have since risen to about $3. Is this a company that must await oil rising to $70-75/bbl for its share price to recover?

    AD: Some companies become more attractive to investors at different times. Once RMP further confirms its position with the publication of its quarterly reports, investors will realize that the company offers extremely attractive fundamentals compared to its low gearing and its growth in reserves, despite a capex cut.

    What we like about companies such as RMP is that they are sensible. They trim capex very quickly to adjust to their free cash-flow-generating capacity, and will not overspend just to increase revenues. RMP wants to make profits and increase its value for the benefit of its shareholders. It will wait until the oil price recovers before increasing capex. This goes back to the point I made earlier about the remarkable operational flexibility of the North American shale oil industry.

    TER: And the third Alberta junior you've invested in is?

    AD: Tamarack Valley Energy Ltd. (OTC:TNEYF) [TVE:TSX.V]. Even though it carries more debt than Yangarra and RMP at two times forecast cash flow, it has recently made some very attractive acreage deals that should expand its reserves dramatically. It has a reputation for very tight cost control and some of the most productive wells in the Wilson Creek region. This is another company that stands to benefit as the oil price recovers.

    TER: Tamarack announced a 78% increase to reserves and record Q4/14 production on March 12. How big could it become?

    AD: The company has a huge acreage position, so it's a matter of how much capex it can mobilize and in what manner. This is another sensible company that didn't leverage operations too quickly based on what turned out to be overly optimistic projections of the short-term oil price.

    TER: Tamarack is on track to reduce its net debt to less than $118M by the end of Q2/15. Does that lessen your concern about its balance sheet?

    AD: Because this company has done some recent deals to greatly expand its acreage, we think its bankers will be pretty relaxed concerning loan coverage issues. Tamarack is in a secure position going forward.

    TER: Which B.C. natural gas junior do you like?

    AD: Despite low natural gas prices, a few companies have managed to thrive regardless. Our favorite is Painted Pony Petroleum Ltd. (OTCPK:PDPYF) [PPY.A:TSX.V], which operates in the Montney Formation in northeast B.C. It announced in March that it has increased its reserves by 68% to 2.9 trillion cubic feet equivalent with a recycling ratio of 5.1 times. This is an enormous base on which to build production.

    As mentioned above, a typical hurdle for B.C. shale gas producers has been infrastructure. They need processing plants and pipelines to help bring production to market and build cash flow. Painted Pony has recently consolidated its position in this regard with a very large processing plant deal to be completed this year. This will increase its production and access to market and grow its cash flow. This company's balance sheet is very strong and is thus able to support successful growth. Furthermore, we believe that Painted Pony's acreage position and its resource base make it a very attractive takeover target. It is quite viable even at low gas prices, and presents many other attributes of attractive valuation that could deliver much higher value to shareholders.

    TER: A final word: What is your advice for energy investors?

    AD: They should invest in top-tier management teams at an attractive valuation with good potential to grow, even at lower prices, based on solid balance sheets. Should oil prices rise faster, these companies will also be best placed to benefit, as well as consolidate with other participants in their regions.

    Investors should avoid overleveraged and oversold operations even though they might seem potentially undervalued. Many companies have fallen 90% or more from their highs because of their great indebtedness. These look tempting, but they could be the classic value trap, where you buy into a potential recovery that never occurs because the fees and expenses associated with deleveraging force these companies to their knees.

    TER: Angelos, thank you for your time and insights.

    This interview was conducted by Kevin Michael Grace of The Energy Report and can be read in its entirety here.

    Angelos Damaskos is the founder and CEO of Sector Investment Managers Ltd. of London, a regulated investment advisory company. He is the principal adviser of the Junior Oils Trust and the Junior Gold Fund. The Junior Oils Trust focuses its investments in smaller oil and gas exploration and production companies. An investment banker, Damaskos worked a decade for the European Bank for Reconstruction and Development. He holds a bachelor's degree in mechanical engineering from the University of Glasgow and a master's degree in business administration from the University of Sheffield.

    Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Interviews page.

    Bottom of Form

    DISCLOSURE:
    1) Kevin Michael Grace conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
    2) The following companies mentioned in the interview are sponsors of Streetwise Reports: None. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
    3) Angelos Damaskos: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. My Junior Oils Trusts holds shares in Pony Petroleum Ltd., RMP Energy Inc., Tamarack Valley Energy Ltd. and Yangarra Resources Ltd. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
    4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
    5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.

    6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

    Streetwise - The Energy Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (NYSE:I) only in whole (and always including this disclaimer), but (ii) never in part.

    Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

    Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

    Participating companies provide the logos used in The Energy Report. These logos are trademarks and are the property of the individual companies.

    101 Second St., Suite 110
    Petaluma, CA 94952

    Tel.: (707) 981-8204
    Fax: (707) 981-8998
    Email: jluther@streetwisereports.com

    May 12 1:56 PM | Link | Comment!
  • Investment In Renewables Generates Illuminating Dividends: John McIlveen

    Renewable energy's days as the industry's disruptive stepchild are nearly over, says John McIlveen, senior vice president of Jacob Securities. Costs have fallen in recent years, making wind and solar competitive in a growing number of markets. In this interview with The Energy Report, McIlveen explains that 20-year take-or-pay contracts are turning renewable energy developers into steady, dividend-paying power producers, and he names the companies making the most of their opportunities.

    The Energy Report: John, how has the renewable space changed in the last five years?

    John McIlveen: Cost. The cost of standardized technologies for wind and solar have fallen by at least a half in five years, to just below $2 million per rated megawatt [$2M/rated MW], versus the same cost for a coal plant. That coal plant may deliver two to three times the power at that all-in cost, but the costs are about the same because wind and solar do not have fuel and heavy maintenance costs. Fossil fuel plants deliver much more power, but because they pay for their fuel, the overall cost is about the same as for renewables.

    TER: Bloomberg Business recently wrote that fossil fuels have lost the race with renewables, and Vox responded with some cogent counterarguments. Which is correct?

    JM: I think Vox. Bloomberg measured the growth of the power grid only. If you include all sources, especially transportation, fossil fuel is still the leader. Vox is also right in that fossil fuels deliver two to three times the power per rated megawatt as renewables such as wind and solar. However, I believe renewable growth will surpass fossil fuel growth within 20 years.

    TER: Besides wind and solar, do any other renewable technologies approach competitiveness?

    JM: Geothermal and also small hydro. Small hydro is totally dependent upon its distance from the road. It can cost $2M/MW if it's right beside a road, but if you have to go deep into the woods and create a base camp, roads and a lot of infrastructure, then the cost could rise as high as $4M/MW.

    Geothermal can be competitive too-if all goes right, and that's difficult for geothermal. After all, there's drilling risk, and a dry hole will cost you about $5M. If you get too many of those, you'll end up with a price for power that's higher. But if it's done right, geothermal can also be cost-competitive with fossil fuels.

    TER: Can renewable energy compete without production tax credits, investment tax credits and the renewables portfolio standard [RPS]?

    JM: I think so. In the areas where renewables now have grid parity, they are already cost-competitive. I don't think you're going to need monetary incentives. It's always good to have targeted mandates in terms of how many megawatts you want by a given date. But I don't think the monetary incentives would be necessary for those renewables that have already achieved grid parity.

    TER: Some states in the U.S. have discarded the RPS because they've shot past the goal and don't need it anymore. In other states, the RPS is under attack. Is this a sign that the standard is no longer required?

    JM: No, I think you still need it. For all those renewables that are not cost-competitive, we still need some monetary incentives. I think it's always good to have a mandate, a measuring stick.

    Really, the evidence is that the RPS worked. Twelve years ago, solar cost 10 times what it does today. There are still a variety of technologies that could solve a lot of big problems, like municipal solid waste through to power. But this is not yet a standardized technology. When the technology becomes standardized, and you can get the General Electrics [GE:NYSE] and the Siemens AGs [SI:NYSE] of the world involved, that's when the costs come down. For those technologies, the focus should be on becoming standardized.

    TER: How do low oil and gas prices affect the investment attractiveness of renewable energy?

    JM: Low gas and oil prices only affect the renewable power prices for new projects. They don't change an existing project because these companies have 20-year take-or-pay contracts. So their price is set, and the grid must take all the power that they can produce. However, it does lower prices for new projects. It can put pressure on a new renewable energy project.

    In North America, the gas price sets the marginal price of power. In the rest of the Western Hemisphere, it's largely oil prices that set the marginal price of power. The fuel of necessity or choice in those two areas sets the price.

    TER: What trends in the power industry are boosting the prospects for renewable energy now?

    JM: I think the trends are all favorable here. If we want to talk about distributed power, utilities actually like renewables. They don't have to build transmission. They don't have to build transformers. What's needed, from a regulatory point of view, is for states to allow for individual residences to sell power back into the grid if they're producing more, say with rooftop solar, than they actually consume in a particular afternoon. Quite a few jurisdictions already allow this, but not all of them do.

    What's really holding back a lot of these systems is battery, or storage, technology. For solar to make a residence independent of the grid, we would need to be able to store power for a few days and release it as needed. This battery would have to fit into an existing home. You shouldn't need to renovate your basement to put in a battery that's as large as an automobile to hold power for a few days. It needs to get down to the size of a water heater or something similar. Right now, you have to consume the power as it's produced. It can't be feasibly stored, and that holds back a lot of different renewable power technologies.

    TER: Are conditions for renewable energy more favorable in Canada or in the U.S.?

    JM: Federally, the U.S. has more favorable conditions than Canada. However, in both countries, renewable policies are being initiated more at the state level and the provincial level. The larger Canadian provinces are on a level playing field with a lot of the states. But, of course, typically, the fossil fuel energy-producing states are resistant in Canada, just as they are in the U.S.

    TER: The prevalent renewable energy in Canada seems to be hydropower. Is that an accurate assessment?

    JM: It is likely the most popular. There are great hydro resources everywhere. Even the prairies in the northern parts have good hydropower resources. It's abundant. Wind is being built in large quantities now, so that would be second, I guess. Solar is being built in large quantities now, too.

    TER: Which companies are you talking about with investors now?

    JM: My top picks are Algonquin Power and Utilities Corp. (OTCPK:AQUNF) [AQN:TSX], Brookfield Renewable Energy Partners L.P. (NYSE:BEP) and EnerCare Inc. (OTCPK:CSUWF) [ECI:TSX]. Innergex Renewable Energy Inc. (OTC:INGXF) [INE:TSX] is ascending into that group in terms of its recent results.

    TER: What do you like about those companies?

    JM: It's all about the dividend. All of these companies pay a good dividend. They have demonstrated consistent dividend growth that's well above the inflation rate, some as high as 10% annually, all while maintaining a constant payout ratio, which is the key dividend sustainability risk measurement.

    TER: What earned EnerCare a Strong Buy rating?

    JM: It's not for any fundamental changes. That was simply because, for me at least, a dividend-paying independent power producer [IPP] rated a Buy should show more than a 10% potential return. A Strong Buy is more than 20%. EnerCare got into that zone; the return to our target plus its dividend was more than 20%. That doesn't happen very often with the IPPs because they're not rocket ships. They're Steady Eddie companies that pay you a good dividend, and a dividend that usually increases every year as well. I rarely have more than one Strong Buy at any given time.

    TER: How long has EnerCare been in that category?

    JM: Just a few months. It's probably below 20% return to my target now. It's behaved as I thought it should, and risen a bit more quickly than other IPPs because it seemed out of line with where its valuation should have been.

    TER: As a company that provides water heaters and other household equipment, it's different from the others in your portfolio. What makes EnerCare an especially interesting company?

    JM: EnerCare does not produce renewable energy, but it has the same contract structure as IPPs, in that contracts are very long term and highly predictable in nature. From a risk point of view, I think the company's profile is very similar to the IPPs.

    Another reason EnerCare is interesting is that in H2/14, it bought the home service business of Direct Energy. Direct Energy was its partner in the water heater business. The companies did complementary activities, but there was always the possibility that Direct Energy could compete with EnerCare and withdraw from the partnership. Buying Direct Energy removes that possibility, which was always a little bit of an overhang on the story. The acquisition added about $60M in EBITDA [earnings before interest, taxes, depreciation and amortization], which was a 40% increase, and brought control of the entire operation in house.

    TER: How did EnerCare finance that purchase?

    JM: It was a combination of debt and equity; almost 50/50. EnerCare is one of the most conservative companies in my group in terms of how it runs its balance sheet. It has the highest bond rating in the group. It does everything on a very conservative basis.

    TER: So the financing is not likely to hurt its balance sheet.

    JM: Right. I think it issued something in the neighborhood of $300M in equity, and the balance was debt.

    TER: What was the catalyst for Brookfield Renewable Energy beginning operations in Europe last year?

    JM: There were two reasons. Here in North America, opportunities were becoming too pricey. The cost of assets, whether preconstruction assets or online assets, have gotten quite pricey. So Brookfield is looking beyond North America to find more opportunities. Before the Ireland acquisition, it was a big operator in Brazil. Now, it is ready to look elsewhere. Europe is a mature market. The resale of individual projects is going on there, so there is much more opportunity in Europe versus North America right now.

    Second, the assets were large enough to be meaningful. You can't have very good feet on the ground with new opportunities if you're buying something small. This was 463 MW, and that's about a 7% increase in the company's total megawatts, so it's not insignificant. Now Brookfield has feet on the ground in Europe.

    TER: Is Europe more hospitable to renewable energy development than North America?

    JM: Each country has its own regulations, of course. For the longest time, Germany was perhaps the most favorable market in the world. However, we've seen other countries, like Italy and Spain, try to roll back their contracts, meaning the prices they pay for the power once it has already been built. There's a real hodgepodge of both the attractiveness of renewable incentives as well as confidence that they'll be maintained.

    Germany is now peeling down its renewable incentives. It is not changing existing contracts, but new ones are relatively less attractive than they were, say, five or 10 years ago. But, again, that's because the cost of wind, solar and other technologies has come down so much. The country recognizes that it doesn't have to give as large an incentive. It's become a bit more directed.

    Offshore wind is doing great in Europe, particularly in the North Sea and around Britain. In fact, Northland Power Inc. (OTCPK:NPIFF) [NPI:TSX], another company in our group, is one of the biggest developers of wind in the North Sea. It plans to spend $3 billion on two individual projects, which are almost 1,000 MW in total. That's the next wave.

    TER: What do you like about Algonquin Power?

    JM: In the last few years, Algonquin Power has averaged about a 10% increase in its dividend. It has one of the lowest payout ratios, which is one of my key risk measurements. It's below 50%. It is now balanced about 50/50 in terms of free cash flow coming from renewable energy and water, gas and electric utilities.

    Utilities are a great investment in terms of the predictability of their cash flows. They're slightly more predictable than the long-term take-or-pay contracts of the IPPs. The company buys well. Algonquin's utility assets are already existing, and they're all in the U.S. Its renewable assets are largely in Canada and the U.S. It's got a well-managed balance sheet. Good execution. It's just a solid company.

    TER: What are the risks for a pure-play renewable energy provider like Innergex?

    JM: The overwhelming risk to all of these IPPs and, in fact, all dividend-paying companies, is the interest rate risk. The IPPs are most highly correlated with the five-year Treasury bond, which in Canada stands at 90 basis points, and in the U.S. at 135 basis points. That's near all-time lows. But nothing stays that low forever. Historically in Canada, the average spread is about 400 basis points over the five-year Canada bond. If rates rise, so will yields on the IPPs, which in turn means the stock price falls.

    Individual IPPs may have specific yield risk. A dividend yield of 8% and higher means the market fears a dividend cut, so do not buy these companies. You're better off with a lower yield, which means lower risk coupled with a steady track record of increasing dividends. The increasing dividend will mitigate rising interest rates over time and, eventually, skate you back onside. [Please excuse the hockey metaphor, but the playoffs are on.]

    TER: What kind of merger and acquisition [M&A] activity would you expect to see in this space?

    JM: We don't see much at the corporate level. The IPPs like to buy individual projects so they can fit the technology in the right location with their existing infrastructure. When you buy corporate, you're getting all sorts of extra assets and other items you don't want. I don't expect to see much M&A on the corporate level, but on a project level, that's where the market is.

    A few of the smaller IPPs, like Boralex Inc. (OTC:BRLXF) [BLX:TSX] and Capstone Infrastructure Corp. (OTCPK:MCQPF) [CSE:TSX], might be likely targets on the corporate level. However, anyone looking at these companies will be making sure all the assets are in the right locations, and that the technologies fit in well with their present mix. EnerCare has been the target of a couple of board takeover attempts over the last few years, but the acquisition of Direct Energy's home service business seems to have quieted down that noise. Atlantic Power Corp. (AT) is busy selling assets to get back onside with its lenders' covenants, but I have not heard of any interest at corporate level.

    I think, eventually, the large U.S. utilities could become interested. Utilities hate risk, but they do have mandates to fulfill. They own coal and gas, so why would they want to buy power from wind and solar that they don't own? They want to own it instead, but the last thing a utility can do is build wind or solar, because its engineers are fossil fuel engineers. Utilities have to acquire the expertise as well as the assets. There may be a possibility down the road to buy some of the larger IPPs, but I'm not hearing about that right now.

    TER: Given the low price of fossil fuels and the political resistance to decarbonization of the power industry, how should investors in this space proceed?

    JM: The price of fossil fuels only impacts new or aspiring power price contracts. These contracts are set at 20-year take-or-pay, so the IPP sells all it can produce at a known price for 20 years. I would say buy the IPPs with yields in the 4-6% range and a steady track record of increasing dividends. If you want to look deeper, look at the payout ratio-I would say a maximum of 75%. A payout ratio below 60% usually means that a dividend increase is coming. It's better for sleeping at night to have a well-run stock with a dividend that rises, as opposed to a dividend at 8% that you might find cut in half next week.

    TER: John, thank you for sharing your insights.

    This interview was conducted by Tom Armistead of The Energy Report and can be read in its entirety here.

    Senior vice president for research John McIlveen has been with Jacob Securities in Toronto, an investment bank focused on renewable power and cleantech, for eight years. He is a published business professor with a bachelor of commerce degree and a master's degree in business administration. He has 28 years' experience in public equities research, private equity and term lending. McIlveen was the first sellside analyst in Canada to focus solely on renewable power, and is consistently ranked a top performer by Bloomberg on accuracy of estimates and returns.

    Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Interviews page.

    Top of Form

    Bottom of Form

    DISCLOSURE:
    1) Tom Armistead conducted this interview for Streetwise Reports LLC, publisher ofThe Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
    2) The following companies mentioned in the interview are sponsors of Streetwise Reports: None. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
    3) John McIlveen: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
    4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
    5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.

    6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

    Streetwise - The Energy Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (NYSE:I) only in whole (and always including this disclaimer), but (ii) never in part.

    Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

    Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

    Participating companies provide the logos used in The Energy Report. These logos are trademarks and are the property of the individual companies.

    101 Second St., Suite 110
    Petaluma, CA 94952

    Tel.: (707) 981-8204
    Fax: (707) 981-8998
    Email: jluther@streetwisereports.com

    May 07 12:59 PM | Link | Comment!
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