Josef Schachter: Oil/Gas Stock Buy Window — 3 Signals to Watch
Summary
Investment Strategy: Josef Schachter emphasizes the importance of timing in the oil and gas sector, suggesting investors hold cash reserves for a potential buying opportunity in late Q4, during the tax loss selling season.
Market Indicators: Key signals for a buy alert include oil prices dropping below $60, the S&P TSX energy index falling below 240, and the bullish percentage index dipping under 10%.
Company Insights: Schachter highlights several successful stock picks, such as Alvo Petro and Freehold Royalties, which have shown significant gains and offer attractive dividends.
Sector Outlook: The podcast discusses the potential for increased M&A activity in the oil and gas sector, particularly as LNG Canada expands its capacity, which could drive demand and prices higher.
Global Production: The US is a net exporter of oil, with production levels at 13.6 million barrels per day, while Canada is positioned as a major player with 6.1 million barrels per day, benefiting from geopolitical shifts.
OPEC Dynamics: OPEC's production increases are limited by capacity constraints, with Saudi Arabia nearing its peak production, which could impact global supply dynamics.
Long-term Demand: Schachter remains optimistic about long-term demand growth driven by non-OECD countries, despite potential short-term economic slowdowns in industrialized nations.
Energy Cycle: The energy sector is cyclical, and Schachter advises leveraging market corrections to build long-term positions, anticipating a multi-year growth cycle driven by global demand.
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Joseph Shakar. He is president and author at the Shaker Energy Report and a 40-year veteran of the industry on both the buy and sell side. Thank you so much for being here. Great to have you. My pleasure. Good to be with you again, Charlotte. Nice to be catching up with you. It's been a little while, so there's a lot for us to go over in terms of oil and natural gas, but where I thought we could start is you have your catch the energy conference coming up very soon. So, I wondered if you could share some details on that, what people should know, how they can attend. Yeah, we have annually um a conference at Mount Royal University here in Calgary called the Catch the Energy Conference. And what it is is we we found that for individual investors access to management is very difficult. Um institutions get a lot of attention. Companies do road shows. The big banks and other and the energy firms all have conferences and so they have access. Individual investors don't. So our product was created on the research side u to cover companies in the energy uh energy service royalty area. So, uh, domestic and international ENTP, so that individual investors have an independent view where I could use the the four-letter ugly word sell and uh and uh and or or void if if if it's an issue right now that we're concerned about on a company. And um the conference, you know, gets uh um you know, 30 to 40 companies. This year we'll have 33 companies coming. Um we had more but uh you know if there's deals they're precluded from presenting um and we have a whole mix of companies again um you know people can go to the website um www.catchtheenergy.com catch theenergy.com um and uh for those who are want to be subscribers so that they get our research product our independent research product and again Q3 results will start in the next week or two so it's going to be you know a lot of a lot of um input for people and if they own the companies that we cover number one come to the conference you can talk to a Mike Rose at term lane you can talk to Chris Carlson at Bircliffe you can talk to Dan Hock at Total Energy um and you know you have the access to to the management. So if you own the stocks having that facetime to ask your questions and then see that the look in their eyes as they answer your questions that is so valuable to an investor to have the comfort to stay with the story if they believe the long-term potential and that's really uh the benefit of it. So people can go to www.shar Shar s c a c h t e r energy uh.com um and and sharen energyreport.com and they can uh access you know the subscriptions there's a special offer for inn uh listeners uh that that sir Dixon our managed subscription put forward and u they can get two tickets if they uh to come to the conference um we're almost filling up so we're we're close to uh putting a weight list in. So, take advantage of it if you want to come and if you can't use them, pass it on to family or friends who can come to Calgary. Um, and we think it's a very very, you know, good uh value for investors. If you have an investment in any of the companies that are there, just to talk to the company you do own and if you own multiple companies that are presenting, it's unbelievably a valuable opportunity to have that facetime. Perfect. So, this is coming right up. We'll have the links in the video description if people want to check it out. And I agree, so valuable to get that face-toface time with the companies. So, we have that coming up. And now, let's jump into what's going on in the oil sector. So, I mentioned we're catching up after our last conversation all the way back in May. So, there's a lot that's gone on since then. And what I was wondering if you could do just to start is pull out any key events that you would want to highlight for investors over that course of time. What are the main points that you think people should be aware of? Yes, I think people need to realize that the beginning of this year we were trading in the high7879 and we got cautious because we saw inventories building in the US as we talked in May and also we saw inventories building uh around the world faster than they normally do seasonally. And so we said the price of oil is probably going to go down. And we had a a call saying we think it could even go below 60. We didn't know Donald Trump was going to do his tariffs. And of course the price of oil went down to the mid-50s. Um and then in April of of the year, we saw uh that stocks were really cheap. The price of oil got to a point where people were shutting in and production and not not not spending money drilling. And we thought that was a bottom. And there was something called the S&P energy bullish percentage index. And when it's in the 7080 range, then you know it's it's telling you people are optimistic. When it's below 10%, that's a buy signal. And if you get below 5%, it's a table pounding buy signal. We've had three and 4%s in 2008 and 2020, you know, at the bottom, you know, if you remember March, April, then we had in April 0% bulls. Unheard of. I've never seen that in my career. in as you said 40 plus years. So we sent out and uh sent out an action alert buy, added some new buy names, reiterated buys on others, and of course that's worked out very very well. And I can go through examples if you want. Um and right now we're a little cautious. Again, the price of crude got up a little bit higher. We're seeing inventory builds uh in the data. Um and we're still in that seasonally weak period before winter. So if winter hits in mid November or early December or January, uh once that cold period starts, demand picks up between a million to a million3 barrels per day uh between the shoulder season and the winter season. And so if we're going to have an average of 105 million barrels, that becomes important to the price of oil at the margin. And uh my view is a winter we'll see prices north of 70. And I think that in second half of 2026, we're going to be seeing prices in the 80s. So our view is the buying opportunity will come sometime during Q4, probably late Q4. During that window when we talk about tax loss selling from mid November to mid December, uh I think that season is going to affect some groups and some energy stocks have not done well. So they would be harvested for the gains if you made them an AI or MM stocks or whatever. you're going to want to not spend so much money paying CRA. So, you'll want to take your losers and and and offset them and maybe buy something like it uh a different name in the sector uh so you stay exposed to to that part of the energy sector. So, we're in the camp that hold off now, keep your cash reserves, we're going to probably get a great buying opportunity and our subscribers will send out, you know, an email to everybody saying an action alert. um it's time to buy. And here's the three reasons. One, the price of oil gets down below 60 into that 56 to 59 range. That would be one trigger. Two, the S&P TSX energy index, which is in the 290 range, probably below 240. And the third, that bullish percentage index getting below 10%. If all three of those check marks come through, we will be sending out an actionable buy alert. And that's something that I think we add value uh because, you know, we've been doing this so long. Uh we have our metrics that we watch and the metrics tell you when it's time to buy. It also tells you when things are frothy. Um and right now uh we think you hold hold your power powder to dry. Uh have some cash as you have dividend income coming in or whatever because the the sector is paying very very nicely in terms of dividends. um and then wait to um uh allocate those to the names you like and uh you know look at our research maybe you'll find a new name or come to the conference and maybe you'll find a company wow that's a great story and then they could uh then be ready to buy when we get the u appropriate uh indicators kicking in. Very good. I think this is essentially exactly the direction that I wanted to go in because I do remember we had talked about that buy window in May that was coming up at the time and I wanted to check back and see okay so how did you end up playing this what did you do how did it pan out and then talk more about how to position for this next one so anything you would add there yeah so in April we started the the month at 7228 I've got the charts in front of me 5606 was the low um in the second week of May the bullish percentage index went from 82% down to zero as I said before but just showing you some of the stocks um Alvo Petro which is in Brazil a natural gas producer Canadian oil producer uh the stock was down at 438 um it's you know 674 so it's up 53% plus a very very nice dividend u freehold royalties which is you know you know has Canadian and US royalty assets They pay a 9 cent a month uh dividend. So nice annualize there. The the stock went up 39% to to the $14 level uh from the you know $10 level um just above $10. Plus you've got a very nice dividend. Um Hemisphere Energy, you know, Vancouver based energy company, Don Simmons. Uh the stock was trading at a buck 52 uh 224 47% plus dividends. And then I'll give you uh probably the winner uh inplay oil was down at trading at you know you know $520 uh $13. So up $107% plus dividends. And uh one more on the oil side energy uh was $419740 up 77% plus dividends. So, and Total Energy a service stock going from ENTP to service. Uh the stock was trading at um 820 um now it's trading in the 14 1.5 range up 77% plus dividends. So, taking advantage of those triggers when they come um and then we highlight the names that are the bargains. Uh and every issue that we do for our STER uh we cover uh what the um top picks are from one from each sector from being the royalty side uh domestic Canadian natural gas, domestic Canadian liquids, um energy service and then international. So we we have five sectors that we watch. Um the because I'm cautious in the near term, we only had two buys in our issue that came out today. So we're being more cautious saying wait be patient and if you do and then you know the names you keep up with the names you when the buy signal comes you will have the confidence saying really I love total I love surge I love inplay uh love the stories now I got a buy signal where I can buy the stock cheaper than it was just a month ago that's the story we're running with that gives a good idea of how you're strategizing and while we're on the company angle I want to check check back on M&A activity because when we had talked, you mentioned maybe coming up into the second half of 2025 into 2026, we might see increased deal activity in the oil and gas space. So, how are you seeing that play out? How is that looking? Well, you know, we we're seeing the battle for, you know, Meg Energy right now. Um, and does Strath Kona come in with a higher bid? And you know um you know one of the problems with this bid originally was shareholders wanted to have stock you know they wanted to play be involved in the upside of the story. So now it's half and half cash and half uh and half in in shares of senovas for the new deal and then October 20th is now the cutoff date for the uh decision to be made by by the shareholders of meg. Uh I see other companies which are looking at strategic reviews. Uh Kuwait is under one. They've announced that they've been in the process. I think, you know, we've seen us, you know, Step Energy being, you know, got a takeover bit from Arc Financial $5.5. The stock is trading in the 4 and a half. Popped a buck, close to a buck on on that bid. I think there's going to be more and more, especially as LNG Canada moves to 2 BCF, which is an issue we can talk about. uh they're now much below that maybe only 500 MCF not the 2 BCF that were that needs to happen. If that happens, that'll raise the price of Acho and then the people who are might be sellers will then get bids that are more reflective of the long-term value of those assets. Right now with the price of natural gas at 5060 for Ako, um, you know, are you really want to buy that? You know, if you can get somebody to be a seller, but most of the sellers will say, "Hey, I think my long-term value is $3 in MCF. You pay me for that, I'll do a deal." So I think we need to merge those numbers uh and get more reflective of the true value. Uh if you look at the US, the US is uh you know 340 something US uh NYX price. Well, move that into Canadian dollars minus transportation, we should be north of $3 on an equivalent basis. But until we tighten up supply and demand and start bringing down our our inventories, we're at we're we're at record, you know, total levels. um cold winter will do that and LG Canada going to 2BCF a day sometime in 2026 will raise the price and we shouldn't see negative pricing and low pricing uh going forward from 26 on uh with everything on hopefully by you know Q2 of 2026 for LG Canada. Uh so I'm optimistic longer term, near-term. Uh a lot of the stocks, some of them are, you know, are depressed, not you know, near near their lows for the year simply because of what's going on, uh with the cheap natural gas price of AO. Anything further you'd add on the LG Canada angle there? Because you'd mentioned before we turned the camera on, this is a really important one to pay attention to. Yeah, you know the the target production level is 2 BCF and how important that is is the industry produces in Western Canada 18 BCF. So that's a big bump up in terms of total demand. We also have more demand from SAGD. We have more demand from power. So everything in longer term looks really good in terms of the boxes you check to say here's what I would need to feel really bullish. But an LNG Canada has birthing planes panes just like most these projects do. Um so the first train is is being you know taken care of now repaired and it's ramping up. I think we've now had like 15 cargos um you know moving already. Uh 16th is being loaded and and will probably ship in the coming days. Uh LG Canada has now announced that train 2 is getting ready to produce and they've told the shippers or the buyers of u of the LG send your ships in late October, November and we'll start filling. I think they can fill 10 or 11 a month uh between LG uh train one and train two. So that's going to be number one, you know, a big increase in demand for the for the industry. Uh, of course that's going to mean more tax revenue for, you know, the BC government and it'll be a lot of new revenue for the companies uh that are providing the LNG and of course LNG Canada. If they're producing with two trains, they're going to be much more profitable. So, uh, it's a win-win as they get that resolved. And Shell is the major player with LG Canada and they know how to do this. They're one of the biggest LG operators in the world. This connects, I think, to another point that I wanted to check in with you about, which is we have our relatively new prime minister in Canada, Mark Carney. And I I think I asked you this earlier in the year when we talked, you know, how is the oil and gas industry in the country likely to look under him. Now that we are some months in, maybe you can give us a better picture of what we're seeing pan out at this point. Well, on the positive side, Carney, you know, is wanting to do major projects that will increase the the pie for Canada, increase the wealth of Canada. He knows we're a resource base. So, you saw those project announcements which include LG Canada, you know, phase two, uh, which would bring on two more trains, uh, by the, you know, 2829 period. Uh, we also have, you know, Cedars LG moving forward. Key list may be moving forward. So potentially by the end of the decade we could have 6 to 8 BCF of production on the west coast of Canada. And again compare that to the 18 BCF produced right now. That's a big uptick in demand which will impact the industry and a lot of drilling will have to occur to fill it which means jobs which means tax revenue. Um so it's a win-win for everybody first nations and the you know BC government and the company. So it's a win-win across the board. Um, so I'm positive on that side of it. Um, the one area that people are still upset about is some of the bills that have been passed that have not been reversed. U, you know, bills that were put in by, uh, you know, his predecessor, uh, Justin Trudeau. And so the industry is saying right now you're saying the right things including recently we just heard about the XL pipeline might be you know I think he did that to to to kind of sweeten the deal with Trump saying maybe we'll come come and resolve the tariff issue with Canada because he was a big proponent of that and uh again there's still issues with it but South B said you know you know which would would have been the owner of of that um you know there's things that have to be done to to you know to get that back on track. Uh it's going to be more costly, all the other things, but regulatory issues, land tenure issues. So, there's a lot of issues to go through, but the, you know, the fact that they're even talking about something like that is a positive. Uh our premier is is working with the federal government. Um and you know even though she has a little bit of a tiff with your premier uh right now over you know future growth uh with pipelines going to the coast uh and again al access for tankers in the northern part of BC is a big issue still u but I think that uh you know the province is going to try to work the industry is going to try to work uh with the federal government and again the federal government is going to have a massive deficit this year. Uh so they have a real reason to to to want to increase the pie, increase the wealth, increase the tax revenue that they get so that they can at some point in in our grandchildren's lifetime we'll they'll may have a balanced budget again. Nice context on what we have going on over here in Canada. You started to talk about Donald Trump and the US and I think that's a good place to look at as well. Last time we were speaking, it was still we were hearing a lot about drill baby drill and and the dynamics there and I was reading recently the EIA is predicting I think record shale production out of the US this year. So I wanted to ask your thoughts on what we have going on there and and the sustainability because the price levels that the companies need if we're at these lower levels might not be working in their favor. Well, the EIA data from last week showed that the production level in the US was 13.6 million barrels a day. That's up from 13.4 million a year ago. So, there is an increase in the liquids production uh from there uh oil side. Also, the natural gas liquids are up 123,000 to 7.7 million. So when you add the two together, um there's 10 million of production in the other supply which is renewables and natural gas liquids. So we're 23 million 23.5 or so million production. Demand is only like 22 million. So the US is a net exporter and exports last week were 3.59 million barrels. So the light barrels that are coming out of the Perium and Eagleford are being shipped overseas while the heavy cruds you know from Canada are going into the refineries that have always been you know using heavy crude from you know Mexican Mayan or Venezuelan heavy and then the Canadian market benefited because Venezuela got cut off Mexico's fields got matured and not enough money was spent to develop new reserves and bring them on production. So Canada was the big beneficiary of it. We now produce 6.1 million barrels. People should take into account that we are a powerhouse. The biggest producer is the United States as I mentioned 23.5 million. Then you go to um you go to Saudi Arabia and they are a producer of of 9.7 million barrels per day. Then you go to Russia 9.2 million barrels a day. Then Canada at 6.1. And then you go down to China which is like four and a half. So we are a powerhouse plus we have security of supply. We are closer to Asia in terms of the ships taking it from the west coast if that can ever happen. uh and uh our resource base we have some of the biggest reserves in the world uh both of oil and natural gas and you know our um Montney and Duivere are bigger than the you know the the perium and the Eagle fruit and you know the other you know Hannesworth and all the rest of them down there uh in the US. So, um, the upside for Canada is substantial assuming the go-ahad happens with, uh, you know, with more takeaway capacity. Um, and, uh, you know, I think the story longer term is fabulous. The question is, can we get through some of these issues? And I think the fact that we're seeing First Nation support, First Nations wanting ownership, that's a positive, too. Um, you know, higher prices means more royalty tax revenue to the government. More jobs means more tax revenue and more jobs means and higher paying jobs, highpaying jobs in the industry. So there, you know, everybody should have a piece of the pie and grow the pie and that's what potentially could happen uh down the road. But you know the industry is you know we need to get uh you know LG Canada running at 2BCF and then get all the provinces and the federal government on the same page for growth. You can really see the potential for Canada there. So we'll have to wait and see if all these factors can align. I also wondered if you could put what we're seeing from OPEC plus into context because I think we saw an output hike for November but less less than was expected. So, how is that fitting into the supply picture for you? Well, you know, OPEC uh throws out numbers and and when they do this, they talk about quotas. They're not talking about actual production. U and many countries have quotas that are above what they can produce because they don't have the money to reinvest in the industry. uh because the cash flows that are coming in at the you know Brent you know whatever they're getting uh is does you know doesn't cover the needs of of the government be it social services be it for their military be it for the graft you know so there's a the cash flow that's coming in is not being be put back into the ground and that's not causing growth in the in their numbers so you know if you look at Saudi Arabia in Q1 of 25 the I have the data in front of me 8.95 million barrels the August production was 9.7. So they have taken up and and increased the their production. I think their capacity is only like 10 million. And uh so once you have that next 300,000 come on, the only way there's more production is if they have storage and they move the production out of storage and put it into daily production. And I'll give you the example of 2008. The price of oil at the beginning of 2008 was trading around $85. And in 2008 it ran in the summer to 147. A massive spike up and the stocks all reflected you know rising the rising price and it was a very fabulous period for investors during that during that period of the first half of 20 um of 2008 and Saudi Arabia was producing in in the in 2007 8.65 65 million and by July at the high 9.52. So they were able to grow by about 900,000 barrels a day. And if you look at what they're doing right now, they're you know 800,000 barrels a day. So you add maybe another 300 and then they're at peak production. And so I think once the world knows in 2026 that we are at peak production in OPEC and more money needs to be spent to add and of course drilling is first thing then infrastructure pipelines all that stuff needs to happen that's a costly exercise and a timeconsuming exercise as we know how long did it take coastal you know to be built how long did it take TMX to be built cost overruns length of time to build all the rest of it um so I think that we're looking at um you know 2026 in the second half uh very bullish story and that leads into multi-year and 2728 into the end of the decade and the big thing to realize is we're growing demand globally by 1 to 1.3 million per year it's not the OECD the OECD is flat and probably will be declining because of you know the climate issues and uh and the you know the the ability to to u to uh switch to EVs and all that's going to mean less demand for crude oil. But the the the so the the world outside of the OECD, you know, be it South America, be it Africa, where we want more copper, we want more nickel, we need more aluminum. Uh copper being a big one because if you want to do upgrade the grid, if you want to have, you know, the the data centers, you're going to need copper for that. Um, and and all of those things are going to have to come from the third world. They're going to want a a rate of return that's right for the, you know, for the countries. They're going to want good jobs, high-paying jobs for the people. The people want to go from a lower standard of living. Maybe they're on motorcycles or bikes to cars. They're going to want to have, you know, home heating. They're going to want to have electricity. They're going to want all the things that we want and have. And so, that's going to be fair. and the price of that they're going to need to to build it that and justify it means the commodity price have to go up. All of that is going to require more energy in the non OECD the and I think that is the bullish case for the long term. Um and I think that we could see by the end of the decade instead of the 105 we could be 110 112 but the OECD numbers will be down but the rest of the world will be up. I think that's so important to remember on the demand side. And again, you're going in the direction that I was hoping you would. I did want to touch a little bit more on the demand side. So, we had talked again last time about potential for a recession in the US, which I don't think you were really seeing in the cards, but also about black swan events that could affect the broader economy, could affect demand. So, I'm wondering if there's anything you would bring up on on that note for investors to keep an eye on. We're seeing slowdowns in a number of economies where jobs uh are coming down. Germany, we just had data come out today talking about the auto industry pain and the industrial sector pain that they're feeling. Uh we know in Canada, we've got job losses because of what's going on with tariffs, US job losses. we've seen with the you know the different reports the ADP report and others even though the government shutdown is not sending the Bureau of Labor Statistics data out so we're seeing that happen where there's jobs losses but there's growth in other area AI has had such a tremendous impact on the industry with the massive amount of spending you know all of the new chip factories that are going to be built in the United States um you know to for Nvidia and AMD and all the deals we see happening there. So there is some growth in in the tech sector. Uh is it strong enough to offset the declines in other sectors? I don't know the answer to that at this point. But you know you know we saw the Q2 number for the US GDP revised from 3 mill 3.0 to 3.8% growth. So there is growth in the US even though we have all these travailes. Uh Canada though might see negative numbers um or you know kind of just you know going between up and down a flat flatlining. Germany will be down, France will be down. So the industrial world is is seeing the the weakness. Um and but the non-industrial world I think is seeing uh the opportunity for job growth for growing their GDP uh all of those things. So um I I think u you know are you looking for a decline like we had in uh you know the great recession you know 2008 2009 I don't see it. Uh do we see you know things like 2020 during co and that impacted you know energy I don't see that but a pullback into the 56 to 59 level because of soft demand and growing um and growing supplies I think is probably in the cards. uh but heading into the latter part of this year and 2026, you want to be invested. So, anytime we get a buy signal and and and you like the sector, plus the dividends are pretty extraordinary. You're getting companies yielding 7 8 9% right now, some paying quarterly, some paying monthly. That's pretty good relative to what you can get in the bank. And if oil does go to 80 or 90 in the next 3 four years and natural gas goes to three years, cash flows will go up and they'll either use it for, you know, growth, they'll they'll also use it for their NCIBs and of course issue a bid buying the stock back and for dividend growth. So, you know, I think we're at an apex where uh anytime you see these bikes do, you've got to get to whatever um a fair position is for you depending upon your risk profile. sit down with your investment advisor to see what's appropriate, but you can get good yields in pipeline and infrastructure, royalties, ENTP companies, domestic. Um, so I think that that, you know, people should be considering the sector. Um, you know, we've had great runs in, you know, precious metals or you have great runs in the NAMS and the AI and the tech sector, but as I showed you from the, you know, April 20, April of 2025 bottom, we had some pretty good performance in the energy sector, uh, not not a sleepy area, uh, when the buy signals kick in. So, um, when we get this next buy signal, I think we're going to get some great opportunities uh, for investors and we'll be highlighting that in our reports. Yeah, I think you make it sound very straightforward what we all have to do here. And just before I let you go, anything further you'd add on the note of pricing. So $80 oil is looking like a story for 2026. On the natural gas side, is there anything that you would add? Well, US natural gas and Canadian natur two different two different, you know, apples and oranges kind of thing. the US price in the 340s uh is is normally what you see during the uh soft periods of the you know the shoulder seasons and then you get into winter you can have spikes to five 6 $10 even in the past. So my guess is that if we have a normal winter, we might see $5 um you know NYX during winter months of you know January, February when you get those big draw downs of 200 BCF or more a week u and u you know potentially if it's a cold winter and there's a lot of snow down in Texas which doesn't have our insulation uh we might see $9 $10 but uh $6 is is what we're saying for you know peak pricing right now and again we'll see what mother nature has in store for us as as we get closer to November, which is the beginning of the draw season for natural gas. In terms of Canada, um we need to see LG Canada running at full capacity to tighten things up. And if we have a normal winter, our draw downs of our storage will come down and we'll get back into that 250 350 range for Acho uh and station 2 during uh during those winter months. And then if LG Canada is running uh full out by the end of winter, which of course, you know, means March, um then we could see prices come down from those lofty levels, but not down to negative numbers like we've seen, you know, p this past fall. Um and maybe the shallow periods now were a buck 50 to two bucks rather than low 50 cent, 60 cents and negative pricing. So I'm optimistic for that. on the high side um you know $354 would be probably where we are during winter 2025 26 but winter 2627 if we're running at 2BCF in LG Canada and we have other projects moving forward and storage has been pulled back um and demand picks up for SAGD demand picks up for you know power for data centers we could be looking at you know winter prices in the four five $6 level um and we could be looking at you know the shallow low periods only being $253. So the story is gets gets better and better further down the road, we got to get through these next couple of months here. But uh if we get the uh you get the pullback that I'm expecting and we get the buy signals, we are telling our subscribers that you know if you were at 80% of where your target level is for the sector, uh we think we're going to be recommending whatever is appropriate for you. And again sit down with your investment advisor, see what is appropriate for you. What do you do? You want the biggest names, the most liquid names uh you know like a TC Energy or an Nbridge or do you want you know a big name like Termolene and or you know or you know other names that are in the sector that have a good dividends um domestically uh freehold royalty and topaz and you know names like that um then you know be ready to buy when we get the next buy signal and u you know my view is I don't trade I'm not a trader but what I like to do is take advantage of those lowrisk buying opportunities to build my portfolios. And right now for myself and and my family, we own 11 different energy names. And my we may add one more, but I'm just building positions, taking advantage of which ones are the bargains when we get those those those buy signals. And then you build up your portfolio for the long term. And it's nice seeing those and I I would say that over half the names are dividend payers. So, I like seeing those that dividend income coming in on a regular basis. I think of course, as you said, every person is different, but this is a really good action plan that I think people should take a look at. So, very solid conversation. I will let you go. Any final points? It seems like we've done a good job covering oil and gas for the time being. Yeah, energy is one that doesn't, you know, is not something you buy and hold like you thought maybe IBM or, you know, or Meta or something like that. Uh, Microsoft. Um, the energy sector has its cycles and we had a bull market cycle from 74 to 81 and then it went into a dead period. It was a a traders market, not an investor's market. 99 to08 we had a massive cycle because China became you know capitalistic under a communist umbrella and their demand went from four million barrels a day to 14 million barrels a day that incremental demand drove prices up to that 147 then we got the co in 2020 we got the bottom I think that's the beginning of the new cycle this cycle might last at 2030 2035 I don't know at this point but it'll be because of the third world the noncd world will be consuming more and more energy as they build out the products that we need aluminum, lithium, you know, all the things we've talked about and that's going to be the driver and that takes many years. So this is not a one or twoear cycle. So if we're going to have a 5 to 8ear cycle, then what you want to do is nothing goes up straight. There's always corrections along the way. So during those corrections, that's what we use our three metrics on. And when we get those saying buy, then we say add to your portfolios at this point. And so far in my career, that's worked out very well. Well, great solid point to end on. Thank you so much for coming on to talk. It's always great to have you. My pleasure as always, Charlotte. And um yeah, and uh wish everybody a happy Thanksgiving. Oh, thank you very much. And once again, I'm Charlotte Mloud with investingnews.com and this is Joseph Shakar. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]
Josef Schachter: Oil/Gas Stock Buy Window — 3 Signals to Watch
Summary
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Joseph Shakar. He is president and author at the Shaker Energy Report and a 40-year veteran of the industry on both the buy and sell side. Thank you so much for being here. Great to have you. My pleasure. Good to be with you again, Charlotte. Nice to be catching up with you. It's been a little while, so there's a lot for us to go over in terms of oil and natural gas, but where I thought we could start is you have your catch the energy conference coming up very soon. So, I wondered if you could share some details on that, what people should know, how they can attend. Yeah, we have annually um a conference at Mount Royal University here in Calgary called the Catch the Energy Conference. And what it is is we we found that for individual investors access to management is very difficult. Um institutions get a lot of attention. Companies do road shows. The big banks and other and the energy firms all have conferences and so they have access. Individual investors don't. So our product was created on the research side u to cover companies in the energy uh energy service royalty area. So, uh, domestic and international ENTP, so that individual investors have an independent view where I could use the the four-letter ugly word sell and uh and uh and or or void if if if it's an issue right now that we're concerned about on a company. And um the conference, you know, gets uh um you know, 30 to 40 companies. This year we'll have 33 companies coming. Um we had more but uh you know if there's deals they're precluded from presenting um and we have a whole mix of companies again um you know people can go to the website um www.catchtheenergy.com catch theenergy.com um and uh for those who are want to be subscribers so that they get our research product our independent research product and again Q3 results will start in the next week or two so it's going to be you know a lot of a lot of um input for people and if they own the companies that we cover number one come to the conference you can talk to a Mike Rose at term lane you can talk to Chris Carlson at Bircliffe you can talk to Dan Hock at Total Energy um and you know you have the access to to the management. So if you own the stocks having that facetime to ask your questions and then see that the look in their eyes as they answer your questions that is so valuable to an investor to have the comfort to stay with the story if they believe the long-term potential and that's really uh the benefit of it. So people can go to www.shar Shar s c a c h t e r energy uh.com um and and sharen energyreport.com and they can uh access you know the subscriptions there's a special offer for inn uh listeners uh that that sir Dixon our managed subscription put forward and u they can get two tickets if they uh to come to the conference um we're almost filling up so we're we're close to uh putting a weight list in. So, take advantage of it if you want to come and if you can't use them, pass it on to family or friends who can come to Calgary. Um, and we think it's a very very, you know, good uh value for investors. If you have an investment in any of the companies that are there, just to talk to the company you do own and if you own multiple companies that are presenting, it's unbelievably a valuable opportunity to have that facetime. Perfect. So, this is coming right up. We'll have the links in the video description if people want to check it out. And I agree, so valuable to get that face-toface time with the companies. So, we have that coming up. And now, let's jump into what's going on in the oil sector. So, I mentioned we're catching up after our last conversation all the way back in May. So, there's a lot that's gone on since then. And what I was wondering if you could do just to start is pull out any key events that you would want to highlight for investors over that course of time. What are the main points that you think people should be aware of? Yes, I think people need to realize that the beginning of this year we were trading in the high7879 and we got cautious because we saw inventories building in the US as we talked in May and also we saw inventories building uh around the world faster than they normally do seasonally. And so we said the price of oil is probably going to go down. And we had a a call saying we think it could even go below 60. We didn't know Donald Trump was going to do his tariffs. And of course the price of oil went down to the mid-50s. Um and then in April of of the year, we saw uh that stocks were really cheap. The price of oil got to a point where people were shutting in and production and not not not spending money drilling. And we thought that was a bottom. And there was something called the S&P energy bullish percentage index. And when it's in the 7080 range, then you know it's it's telling you people are optimistic. When it's below 10%, that's a buy signal. And if you get below 5%, it's a table pounding buy signal. We've had three and 4%s in 2008 and 2020, you know, at the bottom, you know, if you remember March, April, then we had in April 0% bulls. Unheard of. I've never seen that in my career. in as you said 40 plus years. So we sent out and uh sent out an action alert buy, added some new buy names, reiterated buys on others, and of course that's worked out very very well. And I can go through examples if you want. Um and right now we're a little cautious. Again, the price of crude got up a little bit higher. We're seeing inventory builds uh in the data. Um and we're still in that seasonally weak period before winter. So if winter hits in mid November or early December or January, uh once that cold period starts, demand picks up between a million to a million3 barrels per day uh between the shoulder season and the winter season. And so if we're going to have an average of 105 million barrels, that becomes important to the price of oil at the margin. And uh my view is a winter we'll see prices north of 70. And I think that in second half of 2026, we're going to be seeing prices in the 80s. So our view is the buying opportunity will come sometime during Q4, probably late Q4. During that window when we talk about tax loss selling from mid November to mid December, uh I think that season is going to affect some groups and some energy stocks have not done well. So they would be harvested for the gains if you made them an AI or MM stocks or whatever. you're going to want to not spend so much money paying CRA. So, you'll want to take your losers and and and offset them and maybe buy something like it uh a different name in the sector uh so you stay exposed to to that part of the energy sector. So, we're in the camp that hold off now, keep your cash reserves, we're going to probably get a great buying opportunity and our subscribers will send out, you know, an email to everybody saying an action alert. um it's time to buy. And here's the three reasons. One, the price of oil gets down below 60 into that 56 to 59 range. That would be one trigger. Two, the S&P TSX energy index, which is in the 290 range, probably below 240. And the third, that bullish percentage index getting below 10%. If all three of those check marks come through, we will be sending out an actionable buy alert. And that's something that I think we add value uh because, you know, we've been doing this so long. Uh we have our metrics that we watch and the metrics tell you when it's time to buy. It also tells you when things are frothy. Um and right now uh we think you hold hold your power powder to dry. Uh have some cash as you have dividend income coming in or whatever because the the sector is paying very very nicely in terms of dividends. um and then wait to um uh allocate those to the names you like and uh you know look at our research maybe you'll find a new name or come to the conference and maybe you'll find a company wow that's a great story and then they could uh then be ready to buy when we get the u appropriate uh indicators kicking in. Very good. I think this is essentially exactly the direction that I wanted to go in because I do remember we had talked about that buy window in May that was coming up at the time and I wanted to check back and see okay so how did you end up playing this what did you do how did it pan out and then talk more about how to position for this next one so anything you would add there yeah so in April we started the the month at 7228 I've got the charts in front of me 5606 was the low um in the second week of May the bullish percentage index went from 82% down to zero as I said before but just showing you some of the stocks um Alvo Petro which is in Brazil a natural gas producer Canadian oil producer uh the stock was down at 438 um it's you know 674 so it's up 53% plus a very very nice dividend u freehold royalties which is you know you know has Canadian and US royalty assets They pay a 9 cent a month uh dividend. So nice annualize there. The the stock went up 39% to to the $14 level uh from the you know $10 level um just above $10. Plus you've got a very nice dividend. Um Hemisphere Energy, you know, Vancouver based energy company, Don Simmons. Uh the stock was trading at a buck 52 uh 224 47% plus dividends. And then I'll give you uh probably the winner uh inplay oil was down at trading at you know you know $520 uh $13. So up $107% plus dividends. And uh one more on the oil side energy uh was $419740 up 77% plus dividends. So, and Total Energy a service stock going from ENTP to service. Uh the stock was trading at um 820 um now it's trading in the 14 1.5 range up 77% plus dividends. So, taking advantage of those triggers when they come um and then we highlight the names that are the bargains. Uh and every issue that we do for our STER uh we cover uh what the um top picks are from one from each sector from being the royalty side uh domestic Canadian natural gas, domestic Canadian liquids, um energy service and then international. So we we have five sectors that we watch. Um the because I'm cautious in the near term, we only had two buys in our issue that came out today. So we're being more cautious saying wait be patient and if you do and then you know the names you keep up with the names you when the buy signal comes you will have the confidence saying really I love total I love surge I love inplay uh love the stories now I got a buy signal where I can buy the stock cheaper than it was just a month ago that's the story we're running with that gives a good idea of how you're strategizing and while we're on the company angle I want to check check back on M&A activity because when we had talked, you mentioned maybe coming up into the second half of 2025 into 2026, we might see increased deal activity in the oil and gas space. So, how are you seeing that play out? How is that looking? Well, you know, we we're seeing the battle for, you know, Meg Energy right now. Um, and does Strath Kona come in with a higher bid? And you know um you know one of the problems with this bid originally was shareholders wanted to have stock you know they wanted to play be involved in the upside of the story. So now it's half and half cash and half uh and half in in shares of senovas for the new deal and then October 20th is now the cutoff date for the uh decision to be made by by the shareholders of meg. Uh I see other companies which are looking at strategic reviews. Uh Kuwait is under one. They've announced that they've been in the process. I think, you know, we've seen us, you know, Step Energy being, you know, got a takeover bit from Arc Financial $5.5. The stock is trading in the 4 and a half. Popped a buck, close to a buck on on that bid. I think there's going to be more and more, especially as LNG Canada moves to 2 BCF, which is an issue we can talk about. uh they're now much below that maybe only 500 MCF not the 2 BCF that were that needs to happen. If that happens, that'll raise the price of Acho and then the people who are might be sellers will then get bids that are more reflective of the long-term value of those assets. Right now with the price of natural gas at 5060 for Ako, um, you know, are you really want to buy that? You know, if you can get somebody to be a seller, but most of the sellers will say, "Hey, I think my long-term value is $3 in MCF. You pay me for that, I'll do a deal." So I think we need to merge those numbers uh and get more reflective of the true value. Uh if you look at the US, the US is uh you know 340 something US uh NYX price. Well, move that into Canadian dollars minus transportation, we should be north of $3 on an equivalent basis. But until we tighten up supply and demand and start bringing down our our inventories, we're at we're we're at record, you know, total levels. um cold winter will do that and LG Canada going to 2BCF a day sometime in 2026 will raise the price and we shouldn't see negative pricing and low pricing uh going forward from 26 on uh with everything on hopefully by you know Q2 of 2026 for LG Canada. Uh so I'm optimistic longer term, near-term. Uh a lot of the stocks, some of them are, you know, are depressed, not you know, near near their lows for the year simply because of what's going on, uh with the cheap natural gas price of AO. Anything further you'd add on the LG Canada angle there? Because you'd mentioned before we turned the camera on, this is a really important one to pay attention to. Yeah, you know the the target production level is 2 BCF and how important that is is the industry produces in Western Canada 18 BCF. So that's a big bump up in terms of total demand. We also have more demand from SAGD. We have more demand from power. So everything in longer term looks really good in terms of the boxes you check to say here's what I would need to feel really bullish. But an LNG Canada has birthing planes panes just like most these projects do. Um so the first train is is being you know taken care of now repaired and it's ramping up. I think we've now had like 15 cargos um you know moving already. Uh 16th is being loaded and and will probably ship in the coming days. Uh LG Canada has now announced that train 2 is getting ready to produce and they've told the shippers or the buyers of u of the LG send your ships in late October, November and we'll start filling. I think they can fill 10 or 11 a month uh between LG uh train one and train two. So that's going to be number one, you know, a big increase in demand for the for the industry. Uh, of course that's going to mean more tax revenue for, you know, the BC government and it'll be a lot of new revenue for the companies uh that are providing the LNG and of course LNG Canada. If they're producing with two trains, they're going to be much more profitable. So, uh, it's a win-win as they get that resolved. And Shell is the major player with LG Canada and they know how to do this. They're one of the biggest LG operators in the world. This connects, I think, to another point that I wanted to check in with you about, which is we have our relatively new prime minister in Canada, Mark Carney. And I I think I asked you this earlier in the year when we talked, you know, how is the oil and gas industry in the country likely to look under him. Now that we are some months in, maybe you can give us a better picture of what we're seeing pan out at this point. Well, on the positive side, Carney, you know, is wanting to do major projects that will increase the the pie for Canada, increase the wealth of Canada. He knows we're a resource base. So, you saw those project announcements which include LG Canada, you know, phase two, uh, which would bring on two more trains, uh, by the, you know, 2829 period. Uh, we also have, you know, Cedars LG moving forward. Key list may be moving forward. So potentially by the end of the decade we could have 6 to 8 BCF of production on the west coast of Canada. And again compare that to the 18 BCF produced right now. That's a big uptick in demand which will impact the industry and a lot of drilling will have to occur to fill it which means jobs which means tax revenue. Um so it's a win-win for everybody first nations and the you know BC government and the company. So it's a win-win across the board. Um, so I'm positive on that side of it. Um, the one area that people are still upset about is some of the bills that have been passed that have not been reversed. U, you know, bills that were put in by, uh, you know, his predecessor, uh, Justin Trudeau. And so the industry is saying right now you're saying the right things including recently we just heard about the XL pipeline might be you know I think he did that to to to kind of sweeten the deal with Trump saying maybe we'll come come and resolve the tariff issue with Canada because he was a big proponent of that and uh again there's still issues with it but South B said you know you know which would would have been the owner of of that um you know there's things that have to be done to to you know to get that back on track. Uh it's going to be more costly, all the other things, but regulatory issues, land tenure issues. So, there's a lot of issues to go through, but the, you know, the fact that they're even talking about something like that is a positive. Uh our premier is is working with the federal government. Um and you know even though she has a little bit of a tiff with your premier uh right now over you know future growth uh with pipelines going to the coast uh and again al access for tankers in the northern part of BC is a big issue still u but I think that uh you know the province is going to try to work the industry is going to try to work uh with the federal government and again the federal government is going to have a massive deficit this year. Uh so they have a real reason to to to want to increase the pie, increase the wealth, increase the tax revenue that they get so that they can at some point in in our grandchildren's lifetime we'll they'll may have a balanced budget again. Nice context on what we have going on over here in Canada. You started to talk about Donald Trump and the US and I think that's a good place to look at as well. Last time we were speaking, it was still we were hearing a lot about drill baby drill and and the dynamics there and I was reading recently the EIA is predicting I think record shale production out of the US this year. So I wanted to ask your thoughts on what we have going on there and and the sustainability because the price levels that the companies need if we're at these lower levels might not be working in their favor. Well, the EIA data from last week showed that the production level in the US was 13.6 million barrels a day. That's up from 13.4 million a year ago. So, there is an increase in the liquids production uh from there uh oil side. Also, the natural gas liquids are up 123,000 to 7.7 million. So when you add the two together, um there's 10 million of production in the other supply which is renewables and natural gas liquids. So we're 23 million 23.5 or so million production. Demand is only like 22 million. So the US is a net exporter and exports last week were 3.59 million barrels. So the light barrels that are coming out of the Perium and Eagleford are being shipped overseas while the heavy cruds you know from Canada are going into the refineries that have always been you know using heavy crude from you know Mexican Mayan or Venezuelan heavy and then the Canadian market benefited because Venezuela got cut off Mexico's fields got matured and not enough money was spent to develop new reserves and bring them on production. So Canada was the big beneficiary of it. We now produce 6.1 million barrels. People should take into account that we are a powerhouse. The biggest producer is the United States as I mentioned 23.5 million. Then you go to um you go to Saudi Arabia and they are a producer of of 9.7 million barrels per day. Then you go to Russia 9.2 million barrels a day. Then Canada at 6.1. And then you go down to China which is like four and a half. So we are a powerhouse plus we have security of supply. We are closer to Asia in terms of the ships taking it from the west coast if that can ever happen. uh and uh our resource base we have some of the biggest reserves in the world uh both of oil and natural gas and you know our um Montney and Duivere are bigger than the you know the the perium and the Eagle fruit and you know the other you know Hannesworth and all the rest of them down there uh in the US. So, um, the upside for Canada is substantial assuming the go-ahad happens with, uh, you know, with more takeaway capacity. Um, and, uh, you know, I think the story longer term is fabulous. The question is, can we get through some of these issues? And I think the fact that we're seeing First Nation support, First Nations wanting ownership, that's a positive, too. Um, you know, higher prices means more royalty tax revenue to the government. More jobs means more tax revenue and more jobs means and higher paying jobs, highpaying jobs in the industry. So there, you know, everybody should have a piece of the pie and grow the pie and that's what potentially could happen uh down the road. But you know the industry is you know we need to get uh you know LG Canada running at 2BCF and then get all the provinces and the federal government on the same page for growth. You can really see the potential for Canada there. So we'll have to wait and see if all these factors can align. I also wondered if you could put what we're seeing from OPEC plus into context because I think we saw an output hike for November but less less than was expected. So, how is that fitting into the supply picture for you? Well, you know, OPEC uh throws out numbers and and when they do this, they talk about quotas. They're not talking about actual production. U and many countries have quotas that are above what they can produce because they don't have the money to reinvest in the industry. uh because the cash flows that are coming in at the you know Brent you know whatever they're getting uh is does you know doesn't cover the needs of of the government be it social services be it for their military be it for the graft you know so there's a the cash flow that's coming in is not being be put back into the ground and that's not causing growth in the in their numbers so you know if you look at Saudi Arabia in Q1 of 25 the I have the data in front of me 8.95 million barrels the August production was 9.7. So they have taken up and and increased the their production. I think their capacity is only like 10 million. And uh so once you have that next 300,000 come on, the only way there's more production is if they have storage and they move the production out of storage and put it into daily production. And I'll give you the example of 2008. The price of oil at the beginning of 2008 was trading around $85. And in 2008 it ran in the summer to 147. A massive spike up and the stocks all reflected you know rising the rising price and it was a very fabulous period for investors during that during that period of the first half of 20 um of 2008 and Saudi Arabia was producing in in the in 2007 8.65 65 million and by July at the high 9.52. So they were able to grow by about 900,000 barrels a day. And if you look at what they're doing right now, they're you know 800,000 barrels a day. So you add maybe another 300 and then they're at peak production. And so I think once the world knows in 2026 that we are at peak production in OPEC and more money needs to be spent to add and of course drilling is first thing then infrastructure pipelines all that stuff needs to happen that's a costly exercise and a timeconsuming exercise as we know how long did it take coastal you know to be built how long did it take TMX to be built cost overruns length of time to build all the rest of it um so I think that we're looking at um you know 2026 in the second half uh very bullish story and that leads into multi-year and 2728 into the end of the decade and the big thing to realize is we're growing demand globally by 1 to 1.3 million per year it's not the OECD the OECD is flat and probably will be declining because of you know the climate issues and uh and the you know the the ability to to u to uh switch to EVs and all that's going to mean less demand for crude oil. But the the the so the the world outside of the OECD, you know, be it South America, be it Africa, where we want more copper, we want more nickel, we need more aluminum. Uh copper being a big one because if you want to do upgrade the grid, if you want to have, you know, the the data centers, you're going to need copper for that. Um, and and all of those things are going to have to come from the third world. They're going to want a a rate of return that's right for the, you know, for the countries. They're going to want good jobs, high-paying jobs for the people. The people want to go from a lower standard of living. Maybe they're on motorcycles or bikes to cars. They're going to want to have, you know, home heating. They're going to want to have electricity. They're going to want all the things that we want and have. And so, that's going to be fair. and the price of that they're going to need to to build it that and justify it means the commodity price have to go up. All of that is going to require more energy in the non OECD the and I think that is the bullish case for the long term. Um and I think that we could see by the end of the decade instead of the 105 we could be 110 112 but the OECD numbers will be down but the rest of the world will be up. I think that's so important to remember on the demand side. And again, you're going in the direction that I was hoping you would. I did want to touch a little bit more on the demand side. So, we had talked again last time about potential for a recession in the US, which I don't think you were really seeing in the cards, but also about black swan events that could affect the broader economy, could affect demand. So, I'm wondering if there's anything you would bring up on on that note for investors to keep an eye on. We're seeing slowdowns in a number of economies where jobs uh are coming down. Germany, we just had data come out today talking about the auto industry pain and the industrial sector pain that they're feeling. Uh we know in Canada, we've got job losses because of what's going on with tariffs, US job losses. we've seen with the you know the different reports the ADP report and others even though the government shutdown is not sending the Bureau of Labor Statistics data out so we're seeing that happen where there's jobs losses but there's growth in other area AI has had such a tremendous impact on the industry with the massive amount of spending you know all of the new chip factories that are going to be built in the United States um you know to for Nvidia and AMD and all the deals we see happening there. So there is some growth in in the tech sector. Uh is it strong enough to offset the declines in other sectors? I don't know the answer to that at this point. But you know you know we saw the Q2 number for the US GDP revised from 3 mill 3.0 to 3.8% growth. So there is growth in the US even though we have all these travailes. Uh Canada though might see negative numbers um or you know kind of just you know going between up and down a flat flatlining. Germany will be down, France will be down. So the industrial world is is seeing the the weakness. Um and but the non-industrial world I think is seeing uh the opportunity for job growth for growing their GDP uh all of those things. So um I I think u you know are you looking for a decline like we had in uh you know the great recession you know 2008 2009 I don't see it. Uh do we see you know things like 2020 during co and that impacted you know energy I don't see that but a pullback into the 56 to 59 level because of soft demand and growing um and growing supplies I think is probably in the cards. uh but heading into the latter part of this year and 2026, you want to be invested. So, anytime we get a buy signal and and and you like the sector, plus the dividends are pretty extraordinary. You're getting companies yielding 7 8 9% right now, some paying quarterly, some paying monthly. That's pretty good relative to what you can get in the bank. And if oil does go to 80 or 90 in the next 3 four years and natural gas goes to three years, cash flows will go up and they'll either use it for, you know, growth, they'll they'll also use it for their NCIBs and of course issue a bid buying the stock back and for dividend growth. So, you know, I think we're at an apex where uh anytime you see these bikes do, you've got to get to whatever um a fair position is for you depending upon your risk profile. sit down with your investment advisor to see what's appropriate, but you can get good yields in pipeline and infrastructure, royalties, ENTP companies, domestic. Um, so I think that that, you know, people should be considering the sector. Um, you know, we've had great runs in, you know, precious metals or you have great runs in the NAMS and the AI and the tech sector, but as I showed you from the, you know, April 20, April of 2025 bottom, we had some pretty good performance in the energy sector, uh, not not a sleepy area, uh, when the buy signals kick in. So, um, when we get this next buy signal, I think we're going to get some great opportunities uh, for investors and we'll be highlighting that in our reports. Yeah, I think you make it sound very straightforward what we all have to do here. And just before I let you go, anything further you'd add on the note of pricing. So $80 oil is looking like a story for 2026. On the natural gas side, is there anything that you would add? Well, US natural gas and Canadian natur two different two different, you know, apples and oranges kind of thing. the US price in the 340s uh is is normally what you see during the uh soft periods of the you know the shoulder seasons and then you get into winter you can have spikes to five 6 $10 even in the past. So my guess is that if we have a normal winter, we might see $5 um you know NYX during winter months of you know January, February when you get those big draw downs of 200 BCF or more a week u and u you know potentially if it's a cold winter and there's a lot of snow down in Texas which doesn't have our insulation uh we might see $9 $10 but uh $6 is is what we're saying for you know peak pricing right now and again we'll see what mother nature has in store for us as as we get closer to November, which is the beginning of the draw season for natural gas. In terms of Canada, um we need to see LG Canada running at full capacity to tighten things up. And if we have a normal winter, our draw downs of our storage will come down and we'll get back into that 250 350 range for Acho uh and station 2 during uh during those winter months. And then if LG Canada is running uh full out by the end of winter, which of course, you know, means March, um then we could see prices come down from those lofty levels, but not down to negative numbers like we've seen, you know, p this past fall. Um and maybe the shallow periods now were a buck 50 to two bucks rather than low 50 cent, 60 cents and negative pricing. So I'm optimistic for that. on the high side um you know $354 would be probably where we are during winter 2025 26 but winter 2627 if we're running at 2BCF in LG Canada and we have other projects moving forward and storage has been pulled back um and demand picks up for SAGD demand picks up for you know power for data centers we could be looking at you know winter prices in the four five $6 level um and we could be looking at you know the shallow low periods only being $253. So the story is gets gets better and better further down the road, we got to get through these next couple of months here. But uh if we get the uh you get the pullback that I'm expecting and we get the buy signals, we are telling our subscribers that you know if you were at 80% of where your target level is for the sector, uh we think we're going to be recommending whatever is appropriate for you. And again sit down with your investment advisor, see what is appropriate for you. What do you do? You want the biggest names, the most liquid names uh you know like a TC Energy or an Nbridge or do you want you know a big name like Termolene and or you know or you know other names that are in the sector that have a good dividends um domestically uh freehold royalty and topaz and you know names like that um then you know be ready to buy when we get the next buy signal and u you know my view is I don't trade I'm not a trader but what I like to do is take advantage of those lowrisk buying opportunities to build my portfolios. And right now for myself and and my family, we own 11 different energy names. And my we may add one more, but I'm just building positions, taking advantage of which ones are the bargains when we get those those those buy signals. And then you build up your portfolio for the long term. And it's nice seeing those and I I would say that over half the names are dividend payers. So, I like seeing those that dividend income coming in on a regular basis. I think of course, as you said, every person is different, but this is a really good action plan that I think people should take a look at. So, very solid conversation. I will let you go. Any final points? It seems like we've done a good job covering oil and gas for the time being. Yeah, energy is one that doesn't, you know, is not something you buy and hold like you thought maybe IBM or, you know, or Meta or something like that. Uh, Microsoft. Um, the energy sector has its cycles and we had a bull market cycle from 74 to 81 and then it went into a dead period. It was a a traders market, not an investor's market. 99 to08 we had a massive cycle because China became you know capitalistic under a communist umbrella and their demand went from four million barrels a day to 14 million barrels a day that incremental demand drove prices up to that 147 then we got the co in 2020 we got the bottom I think that's the beginning of the new cycle this cycle might last at 2030 2035 I don't know at this point but it'll be because of the third world the noncd world will be consuming more and more energy as they build out the products that we need aluminum, lithium, you know, all the things we've talked about and that's going to be the driver and that takes many years. So this is not a one or twoear cycle. So if we're going to have a 5 to 8ear cycle, then what you want to do is nothing goes up straight. There's always corrections along the way. So during those corrections, that's what we use our three metrics on. And when we get those saying buy, then we say add to your portfolios at this point. And so far in my career, that's worked out very well. Well, great solid point to end on. Thank you so much for coming on to talk. It's always great to have you. My pleasure as always, Charlotte. And um yeah, and uh wish everybody a happy Thanksgiving. Oh, thank you very much. And once again, I'm Charlotte Mloud with investingnews.com and this is Joseph Shakar. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]