Energy Prospectus

I guess we are all underwater on our energy holdings. It looked to me like on your recent View you didn't buy anything new or sell anything from your holdings (maybe I missed something). Surely, throughout all this turmoil, some of the companies you follow have improved their risk:reward profiles while others have worsened. With that in mind, is there a possibility that you could put the companies you follow in some type of order in terms of which we should buy first after they all report? Should we simply go by the % that they are undervalued. I think most of us need all the help we can get to recoup our losses. Thx.

I did close a Canadian brokerage account recently and sold some very small positions I had up there.

First of all what you buy is totally up to you. The valuations in the newsletter are what I think the companies are worth TODAY, based on their production, drilling inventory and my SWAG of where oil & gas prices are going to be in the future.

That said. The "Elite Eight" in the Sweet 16 are large companies with rock solid production bases and strong management. They are the safest bets.

As I say in each newsletter, the small-caps have more risk but they also have more potential. They get hammered in these oil price cycles because Wall Street thinks they are all going bankrupt. What I try to do is find the ones that will make it and bounce back big time when oil & gas prices improve. If your investment time horizon is more than a few months, the Small-Cap Growth Portfolio is a great place to start.

I am working on Gulfport (GPOR) right now and it looks like a "Screaming Buy" (if you agree with me that natural gas prices will improve this winter).

Hi Dan

You use to cover AREX which is down to 16% of Book Value with huge short position. Surely they could just sell out and derive a nice pop with Wolfcamp leasehold arceage going for $12,000 acre and $ 105,0000 per flowing.

Any thoughts? Thank you.

Approach Resources (AREX) is in our Small-Cap Growth Portfolio. We still cover it in the newsletter and we update the profile and forecast each quarter. You can find it on the EPG website under the Small Cap tab.

Yes it is oversold and Yes it is a prime takeover target.

Thx for taking the time to reply as you do. Makes participation in EPG all the more worthwhile.