Sweet 16 Update - Jan 10

[dan_s]

I have added Tourmaline Oil (TOU.TO) to the Sweet 16. It replaces Civitas Resources (CIVI) that will soon be merging into SM Energy (SM).

Thanks to all the political noise, including Venezuela and Iran, the uncertainty of where oil prices will settle has increased. Regime change in Iran could have a significant impact on the global oil market. Weather forecasts and weekly storage reports will have the most impact on natural gas prices.

As of January 9th, the Sweet 16 is down 1.43% YTD and the S&P 500 Index is up 1.76%. The S&P 500 Index is up 24.1% since Trump started the "Tariff War". Investors have learned not to listen to those suffering from TDS.

Crescent Energy (CRGY) and SM Energy (SM) are trading at the deepest discounts to my valuations. They are both going to look a lot better after their "transformative" mergers close and clarify where they plan to go post-merger. Both of them will be in the Top Ten largest independent upstream oil & gas companies based on Boepd of production. I believe that both of them will be "Screaming Takeover Targets" by mid-2026 if oil & gas prices just move a bit higher and stabilize.

Northern Oil & Gas (NOG), which has also closed some "transformational" acquisitions, offers investors the highest dividend yield (8.23% based on the January 9th closing price. It trades at 1.76X my operating cash flow per share (CFPS) forecast for 2026. I might be moving NOG to our High Yield Income Portfolio.

Solaris Energy Infrastructure (SEI) is already 15.6% YTD and each updated analysts'' forecast pushes the consensus price target higher. If you are not familiar with SEI, I recommend that you read our recently updated profile and spend some time on their website. It has a bright future.

[dan_s]

In my late January newsletter, I will be adding FLEX LNG Ltd. (FLNG) and Freehold Royalties Ltd. (FRU.TO) to our High Yield Income Portfolio. Their current dividend yields are 11.62% and 7.19%.

Kimbell Royalty Partners (KMP) has the highest dividend yield of 13.52%.

With so much uncertainty about where oil & gas prices are heading, I've moved a lot of my personal portfolio into stocks that pay sustainable dividends. It worked well for me in 2025.

I will be dropping Enbridge (ENB.TO). There is nothing wrong with Enbridge, but its dividend yield is near the bottom and the share price is getting close to my valuation.

If I can find a good fit for the Sweet 16, I may move Northern Oil & Gas (NOG) to the High Yield Income Portfolio. Whitecap Resources (WCP.TO) is actually a better fit for the Sweet 16. In addition to high dividend yield, they are both aggressive growth companies.

Susan & I will be heading out on another cruise January 14-24. Our ship has very good internet, so I will be checking the market and the EPG Forum while on vacation.

We have a webinar on Monday, January 12 hosted by Silver Storm Mining Ltd. (SVRS.V), which is near the top of my Small-Cap Watch List. Silver prices are nearing $80/oz, which is up more than 163% in the last 12-months.

Our Houston luncheon on Tuesday, January 13 will be focused on the copper market.

I am working Roth Capital Partners LLC on an Energy Investor Day event during the week of NAPE. We will be sending out details this coming week.