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Jonathan Yates is the founder of EarnedMediaUnlimited. He has had thousands of articles appear under his byline in websites and periodicals such Seeking Alpha, The Washington Post, AOL Daily Finance, Foreign Policy, and The Motley Fool, among many others. The views expressed are his own. In his... More
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  • Is The Canadian Energy Sector The Best Way To Profit From Middle East Tension? 0 comments
    Sep 2, 2013 5:07 PM | about stocks: SU, CNQ, APEOF, OCTX, BTE, CEO

    Unlike other commodity prices, oil (NYSE: USO) has not fallen. While there are many reasons for this, global tension has resulted in crude being the safe haven asset of choice, as gold (NYSE: GLD) and silver (NYSE: SLV) have plunged. Particularly attractive are stocks with Canadian energy assets, ranging from prominent blue chips such as Canadian Natural Resources Limited (NYSE: CNQ) and Suncor Energy (NYSE: SU) to promising small caps such as Americas Petrogas (TSX: BOE) and Octagon 88 (OTCBB: OCTX).

    Canadian energy assets offer the security of a North America base.

    Coupled with that is a free market, pro-business government. The obvious example for this is the amount of foreign investment in Canadian energy interests, which has been actively promoted by politicians at all levels. Prominent examples are CNOOC's (NYSE: CEO), the Chinese oil company, $15.1 billion acquisition of Nexen earlier this year. In June, it was disclosed that Warren Buffett's Berkshire Hathaway (NYSE: BRK-A) had an ownership position of almost 18 million shares of Suncor. Ocatogon 88, an oil and gas exploration company based in Switzerland, owns promising resources in Alberta.

    From this secure base, Canadian energy firms operate around the world. Americas Petrogas, headquartered in Calgary, is in a joint venture with Exxon Mobil (NYSE: XOM) in Argentina. Americas Petrogas just received a very positive independent study by Ryder Scott for its shale resource blocks in Neuquen Basin in Argentina. About that report, Barclay Hambrook, the CEO of American Petrogas stated, "We are delighted with the findings of Ryder Scott's independent evaluation of the unconventional resource potential across Americas Petrogas Neuquen Basin blocks. This evaluation helps highlight the very large upside attribute to Americas Petrogas' unconventional shale acreage in the Neuquen Basin."

    That is much the same story for the Canadian assets of Octagon 88 for its dynamic simulation results from a study conducted by Schlumberger (NYSE: SLB). Based on that report by Schlumberger, the Elkton Erosional Ridge, the center of efforts for Octagon 88, has 800 million+ barrels. From that, there is a Plan of Development with a production goal of more than thirty thousand barrels a day.

    While Octagon 88 and Americas Petrogas obviously offer growth prospects to investors, income and value come from other Canadian energy asset firms. Suncor pays a dividend of 2.24%, above the average of 2% for a member of the Standard & Poor's 500 Index. The dividend for Baytex (NYSE: BTE) is over 6%. For growth, value, and income investors, companies operating in the Canadian energy sector have much to offer, especially with turmoil in other areas that produce oil and natural gas.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: energy Stocks: SU, CNQ, APEOF, OCTX, BTE, CEO
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