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SCHACHTER ENERGY REPORT: December 20, 2019 - Index

Welcome! Two Important Notes for Subscribers

  1. Apologies to subscribers who were disappointed that I was unable to appear on BNN on December 17th. I experienced a minor medical issue and my Doctor advised against travel for at least a week. I am almost fully recovered now. Thanks to those who expressed their concern.
  2. This is our combined December publication! Dual publications will return in January. However, please note, subscribers will still receive the same amount of material in the Joint December issue; it is just aggregated. Going forward, publication of the December issue will be scheduled for the first Thursday after we return from vacation each year. While we are away, our webmaster and crew are on constant standby, ready to issue Action Alerts or send any notifications that are important or material. Having just one issue in December will not impact your ability to receive critical information as it happens, and will allow me and my family a much needed break. Thank you for your understanding.

In This Issue

  • Tax Loss Selling Season BUYS – Load Up On Favourite Ideas.

  • Outlook 2020 – Finally The Takeoff Year. Our Fearless Forecasts.

  • Coverage List & Valuation List.

  • Action Alert BUY & SELL Lists, and SER Ownership Disclosure.

This past year has been a tough one for world wide energy and energy service investors. Excess crude production due to rising US oil shale volumes, OPEC production in excess of demand and the US trade war with China that hurt international trade and demand for crude in Asia, hurt the sector. For Canadian energy investors we had the added pressure of an anti-oil political environment and egress battles. As we end 2019 these issues are turning to better outcomes and should set up 2020 to be a good and profitable year for energy investors. We are long term investors who see significant upside over the coming years in the sector. While it has been a wild ride so far and we have been early bulls, we expect those who stick with it through the volatility and gyrations to be fully compensated. The upside could be 5-10x for many of the stocks in the sector over the coming years. Just look at the data in the report about prior cycles and see how individual stocks performed. For the patient, the rewards have been worth the roller coaster ride.

We now see US production growth stalling as Tier 1 wells are not performing as expected and many companies are cutting back on capex such that US growth may only be 300-500Kb/d in 2020 versus over 1.2Mb/d this year. For OPEC the decision led by Saudi Arabia to cut back by 500Kb/d (400Kb/d by Saudi Arabia) in Q1/20 will further tighten inventories. The most momentous move was the recent IPO of ARAMCO which moves Saudi Arabia from being a market share player to being a hawk on higher crude prices. They need to sell additional shares in 2021 and beyond to raise funds to diversify their economy. Therefore, ARAMCO needs to see higher revenues, higher cash flow and higher free cash flow so that they can pay rising dividends and have a higher stock price moving forward. This is a game changer for the outlook for crude prices.

Merry Christmas!

SCHACHTER ENERGY REPORT: December 20, 2019 - Index
On behalf of the Schachter Energy Report Team, we wish you a Merry Christmas, Happy Hanukah and to all a happy, healthy and prosperous New Year. May our oil call of over US$70/b be realized and the energy sector return to a winning one for investors versus the dog house it was in during 2019!

On the Canadian malaise, the loss of its majority in parliament by Trudeau’s Liberals sets the stage for some accommodation between the environmental agenda of the Liberals and the needs of the energy west. Andrew Scheer’s disappointing handling of the election and his personal issues have now removed him from the scene so a more impactful opposition should be able going forward to promote the interests of all Canadians, and not just Trudeau’s supporters.

Tax loss selling season is here with most of the energy and energy service sectors having done poorly this year. The S&P/TSX Energy Index has a 2019 range of 171 at the high and 119 at the low. As we write this at our cut-off date of December 13th the Index is at 139. Our approach is to use the next two weeks left in tax loss selling season (final day December 27th) to buy good companies at bargain basement prices.

Watch out in your emails for Action Alerts in the coming days for new investment recommendations and for confirming table pounding BUYS. We expect to add 4-5 new names and endorse Table Pounding BUYS on ideas now on our Action Alert BUY list.

JOSEF TWEETS

If you want to see Josef’s tweets and don’t have a twitter account, you can view and bookmark his twitter page here.

2020 World Outlook Financial Conference

FRIDAY & SATURDAY
February 7 & 8, 2019
THE WESTIN BAYSHORE
VANCOUVER, BC

Click for Details

2020 World Outlook Financial Conference

Michael Campbell will be hosting the 2020 event in Vancouver at the Bayshore Hotel on February 7 & 8th. The focus this year will be on commodities as he expect a new and lengthy bull market will occur over the coming decade:

  • There will be attendance by many precious metals, base metals and uranium companies presenting or at booths.
  • I will host the Saturday AM VIP breakfast that will include two energy companies and one precious metals producer.
  • They will have four breakout rooms on Saturday afternoon for energy companies and I will be hosting one of the rooms.
  • My keynote presentation will be on Saturday morning at 9:40-10:10AM in the Main Ballroom.

TO BUY OR NOT TO BUY

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SCHACHTER ENERGY REPORT: December 20, 2019 - Index Green Light to Buy
Cheap Valuations, Sentiment not bullish, Technicals very attractive

SCHACHTER ENERGY REPORT: December 20, 2019 - Index Yellow Light for Caution
Some wavering on parameters, or parameters not clear. Some stocks may be attractive, others not so

SCHACHTER ENERGY REPORT: December 20, 2019 - Index Red Light to Stop or Sell
Parameters bearish, stay away, sell down, warning to wait for the next buy signal

INDEX • IN THIS ISSUE

Clicking Each Section Will Load It In a New Tab.

1. ENERGY OVERVIEW

Tax Loss Selling Season BUYS – Load Up On Favourite Ideas.

2. 2020 OUTLOOK

Finally The Takeoff Year. Our Fearless Forecasts!

3. CRUDE OIL

Both crude oil and natural gas have decent or great growth potential in the next decade.

4. NATURAL GAS

Both crude oil and natural gas have decent or great growth potential in the next decade.

5. LISTS

Covered Companies & Valuation Analysis. Company Links.

6. LISTS

Action Alert Buy & Sell, & Ownership Disclosure.

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