Sweet 16 Update

[dan_s]

The Sweet 16 had a great week. All 16 were up for the week, lead by GeoResources (GEOI) that is going to merge into HK. I hope all of your had a few shares.

The S-16 is now up 15.5% YTD. TransGlobe Energy (TGA) is leading the pack, up 75.6% YTD. TGA is the only company that has been in the Sweet 16 Growth Portfolio since Kevin Hopson and I founded EPG. Whenever TGA has a good year, the portfolio has a good year. TGA is on-track to top 20,000 BOPD (all selling under contracts tied to Brent) by Q4.

I will be doing a lot of work on the Sweet-16 spreadsheet tomorrow, breaking out my 2012 forecast for each company by quarter. I will have it posted under the Sweet 16 by early tomorrow afternoon.

I hope all of you take the time to read my profile on Osage Exploration & Development. This is a micro-cap which is heavily weighted to oil. They are in a JV with Slawson Exploration that has incredible upside.

Osage is hosting our luncheon on Thursday, May 3 in Houston. I hope all of you in the Houston area can make it to the presentation. We will have a replay on the website by next Friday.

[dan_s]

GeoResources (GEOI) moved into our Sweet 16 Growth Portfolio on 1-1-2010. As of Friday's close, it is up 171.30% since that date. Not too shabby!

I will be looking for a replacement since GEOI is merging with HK. < Maybe HK?

Watch List members that look darn good to me:

AREX: Heavily weighted to oil and would give us more exposure to the Permian Basin
CRK: Focused on increasing their liquids production. High quality management team.
END: On the verge of significant earnings growth.
KOG: Heavily weighted to oil. Prime takeover target. Significant production growth this year.
VRO.TO: I really like this small-cap Canadian. Big potential in the Cardium.
PBN.TO: Solid production, heavily weighted to oil and great dividend yield.
XEC: Making a comeback this year in the Permian Basin

[setliff]

dan, i think gain/loss since entry into sweet sixteen is the best metric to track since it takes out the cycles in between which ytd does not.

fwiw
jim

[dan_s]

I agree, the market dip from April 2011 to early October 2011 was way overdone last year. Anyone that loaded up in early October on the Sweet 16 is in very good shape today. 2010 was a very good year as Sweet 16 was up 72%. We need a nice run like that again.

Let me say that I have never seen high quality E&P companies with production growth locked in trade at multiples this low for this long. Maybe outstanding Q1 results for our picks that are heavily weighted to oil will give investors more confidence.

I just posted updated forecasts for EOG and RRC. Investors in RRC need to look past reported EPS. RRC has a very valuable acreage position, so it deserves a big premium. So does EOG, which is going to report strong Q1 results.