Title: Josef Schachter: Oil Prices Break US$100 Again, Here's What's Next Show: Investing News Network — YouTube channel "Investing News" (host Charlotte McLeod) Guest: Josef Schachter — president and author, Schachter Energy Report (Calgary); 40-year energy-industry veteran (buy and sell side) Date: 2026-09-14 URL: https://youtu.be/xh5rjKu1aX4 Length: 43:54 Note: YouTube auto-transcript pasted by Stephen. Fillers (um/uh/you know/like as tics) and stutters removed; wording otherwise verbatim. Obvious caption mis-hearings corrected in place: Joseph Shakar/Shar -> Josef Schachter, Shaker Energy Report -> Schachter Energy Report, Charlotte Mloud -> Charlotte McLeod, Birch Cliff/Berscliffe -> Birchcliff, Pay to a -> Peyto, Bontra -> Bonterra, Inplay -> InPlay, Strath Kona -> Strathcona, Trirican -> Trican, Tamarak -> Tamarack, headwater -> Headwater, Termolina -> Tourmaline, sunores -> Suncors, Invidia -> Nvidia, LG -> LNG, straight -> strait, Babal Albab -> Bab el-Mandeb, permium -> Permian, Montiney -> Montney, clear water -> Clearwater, nimi -> NIMBY, premers -> premiers, buoes -> boe, PTP -> PDP, cruds -> crudes, metrics -> matrix, "an AO"/"MCA" -> AECO/MCF; caption-dropped decimals restored where unambiguous (285.4 million, US$2.80/mcf, Trican C$8.40/6.30/5.19, Tamarack 13.58). Left as heard but mapped in the analysis: "cavy energy" = probably Cavvy Energy; "soes" = probably Cenovus; "Cass CM" = probably Ksi Lisims LNG; "twoe basis" (unclear); "sir Dixon" (unclear).
00:04 I'm Charlotte McLeod with investingnews.com and here today with me is Josef Schachter. He is president and author at the Schachter 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 be catching up with you once again with you again, Charlotte.
00:22 >> Yes, always good to have you here. And of course, it's at another volatile time in the oil market. I thought since our last conversation was all the way back in mid-March, we could start with just a quick recap of the market over the last six months or so, from the vantage point that we're at right now.
00:43 What stands out to you the most that investors should take note of? Well, the price of oil backed off when the peace talks were ongoing and then all of a sudden that dropped and we went from $70 up to today we're up another $5.5 to 101.5 and if you look at it from a twoe basis we're up probably 11 or 12 now from where we were then and it's all the fighting that's going on in the Middle East.
01:16 There's been upgraded Iranian missiles with help from China and Russia that have now been fired at US aircraft carriers. Nothing happened. They were shot down. But they were faster and so that means the speed of reaction of the US Navy has to pick up. And there was attacks on bases where the US military bases in Jordan, Bahrain, Kuwait were there.
01:40 In return, the Americans went after, they were going after military targets. Now, they're just trying to destroy the economic strength of Iran, which is shipping oil to the world, and they've been destroying tankers. I think it's eight or nine of them by now. And so, the market is worried that the war is continuing.
02:02 President Trump wanted things to quiet down because of the election in the, November 3rd, Tuesday, November 3rd. And the Iranians are saying, "Hey, let's make things bad so that people see the war on the front of the news every day." And they don't like the war.
02:23 60 70% of Americans are against the war and that will affect them when they go into the ballot box and they decide that affordability is a problem. We don't like the war and maybe they vote for the Democrat versus the Republican and again, if the president loses the House, which is the most likely from the pundits now, the question is what happens to the Senate? You saw last night that he announced a $5,000 dividend to US adults if he wins both the House and the Senate.
02:53 I think that's not going to happen. So, he won't have to ask Congress for the money. So I think that the politics of is right now very front and center. Should the price of oil be 101 if we didn't have the war? No. It probably be in the 70s. But because of the war, that war premium is there.
03:15 And one thing that I think really drove prices up today is the Houthis which are the proxy of Iran and Yemen have been fighting the Saudis. But recently they took an important port close to the strait of Bab el-Mandeb which is the one that leads into the, leaves from the Red Sea.
03:36 And if they control that, then effectively the Iranians and their proxies control the two most important straits for oil tanker traffic coming out of the Middle East. So I think that news and the uncertainty of are the US Navy convoys still working or have they stopped? If they stopped then that's a problem.
04:03 But the secretary of the energy had been mentioning for a while, Secretary Wright, that 14 15 million barrels a day have been coming out of the Persian Gulf based on the US Navy's convoy system. Is that still in place? We just don't know. There's been no announcements by the US government.
04:27 Of course the Iranians saying we've shut the straits. Which is not true. But again we don't have reliable data and I think the uncertainty, the unknowns have caused the price of oil to go up. What that means though is people are going to want security of supply and so they're going to want to go from countries that are not in the Middle East.
04:50 They're going to be looking at countries where there's a lot of energy. And of course the United States is a big one. The data came out today from the EIA. 13.95 million barrels of crude oil was produced. That's up 452,000 from a year ago. And then they produced 10.5 million of natural gas liquids.
05:13 That together is 24.45. They only consume 19.3. So the Americans are an exporter. And last week they exported 3.4 million barrels. So they're a big winner. Canada's another one that's a big winner. We produce six million, we export four. Brazil, others like that, Norway. So wherever there's security of supply, I think those are the ones that are going to get more interest.
05:39 Canada's getting interest from everywhere in the world to develop more natural gas LNG facilities. There's talk that we might get two more FIDs, final investment decisions on LNG Canada phase 2, maybe the Cass CM deal. Maybe others will be moved forward. And again, the federal government is now talking about streamlining the process for approvals.
06:04 All of that is good news for Canada. And I think countries around the world and buyers around the world will want to, especially Asia, Japan, South Korea, China will be very willing to buy Canadian oil if we can get the streamlining done and able to build them in a reliable, safe, environmentally safe and quick period with support of course all the people involved including First Nations.
06:37 So, I think that we're heading in the right direction. Again, people may want it to be faster. And the government of Canada now knows that. So we'll just have to be patient. But I think the story for Canada is very very bullish. The energy story long-term, as you know, I've been talking for a long time with you, that we were using $80 WTI for our forecast for companies.
07:01 This year, I think we're too low, given what's going on. We're using $90 for next year. And I believe that heading into the end of the decade, we will see record oil prices above the US 147 a barrel that we saw in 2008. And I think that we're looking, for example, look at copper.
07:24 Copper was under two bucks and now it's $67, probably heading to 10. So, a lot of the commodities that we look at are in short supply. There's been underinvestment, not enough investment. So when people talk to me, okay, Josef, you really like energy, what else do you think we should look at? And I would say to you, critical minerals, uranium, lithium, all those things that are going to needed for the transition to the
07:54 AI world that we're talking about data centers, we need to expand the power grid which is copper. So there's so many places to go. And people should be invested for a commodity super cycle. We had one in 74 to 81. We had one in 99 to 2008. I think this one started in 2020. And I think because of the lags and the fact that the new capacity will be coming from South America and Africa and parts of Asia, the lead time to build is longer because they don't have the infrastructure that we have in North
08:30 America or in Europe. And so that means a cycle could go to the mid 2030s. So it's 2026 and 2030s may be 2034. That's a long cycle. And the price of oil has gone from the low prices that we saw during COVID to the 101 and could we go to 180 190 I just don't know but I think it'll be above US 147.
08:57 One of the results of that would be a stronger Canadian dollar. Right now we're 72 cents. The trade war is on. People think it's going to break down to 68 but if we do see those higher prices in the outlying years I think we'll see a stronger Canadian dollar. May not go to par like it was 20 years ago. But if it gets to 80 or 85 cents, I think Canadians would be a lot happier when they're buying or traveling.
09:21 Well, great look at the big picture there and many directions for us to go in. I want to hone in on security of supply for oil. I thought that was really interesting. I was reading this week that the strategic petroleum reserve in the US oil stocks got down to the lowest level seen since 1982. So I want to ask you about that.
09:41 What is the significance there? >> Yeah, the SPR data that came out today showed a decline of 1.2 million barrels to 285.4 million. That's down 119.9 million from a year ago. So they've really been draining that and using that to sell, used domestically. And also the lighter crudes that come out of the Permian are then sold to the international market.
10:07 The reason you want the heavier crudes is that's how you get your diesel, that's how you get your jet fuel, that's how you get those higher value products. And something called the crack spread, which is the refining margin, which might have been $20, a liter, sorry, $20 a barrel now is $100 a barrel.
10:29 So while 101 is the price for WTI, the price that a refiner is getting if they're producing some of these higher value diesel and jet fuel is $200 a barrel. And that same thing would be, Brent's 105, they would be getting 205. So the reality is the refiners are doing extremely well and the stocks have done very very well.
10:50 So people who want to be in that part of the sector, they have good dividend yields. So that's an attractive opportunity as well. And I think the SPR according to Secretary Wright again the energy secretary for the United States he thinks that number could come down to 180 to 200. So if we're at 285 there's still room to go down in the months ahead.
11:13 And the question is when are we going to get a settlement in the Middle East? President Trump announced again, I think this is for political purposes. Oh, it'll be over the day after the election. I don't think that, there's more and more pundits who are watching the political situation in Iran and Iran is thinking they can drag this out for a long time.
11:37 They want to stay in power and they can take a lot of pain like the Vietnamese did during the Vietnam War. And they're looking at staying in power and that when President Trump is gone or if President Trump realizes that it's an unwinnable war that they will come to some resolution.
11:58 The problem is before the war the strait of Hormuz was open to all traffic. Now the strait of Hormuz has got some control and potentially tariffs going and revenue going to Iran at some point in the deal. And there's now more concern about the nuclear side. Iran has got a new facility that they're working on to upgrade and continue developing their nuclear potential.
12:22 And that is part of the reason again that you may see the price of oil rise is that it looks like the Americans may have to go in with a bigger strike. The one concern I have is the Americans want to keep Israel out of it. Because then it becomes a broader war and then the countries that are working with the United States that are anti-Israel would be concerned and maybe not support the American efforts and so the key is to keep Israel out of it so that it's really the United States and the Persian Gulf countries that are
12:54 against Iran that are taking on Iran. And again, that war premium to me could be 30 bucks right now. And I don't think it goes away this year. Could it go away next year if there's a resolution and there's a concession by the Western Persian Gulf countries that they will pay a tariff, five bucks, 10 bucks, environmental safety tariff, whatever they want to call it.
13:19 But that's the kind of thing where I think we're going. And Iran wins just by not losing and that to me is where the politics of it is and it means higher commodity prices. One big problem is sulfur. Sulfur is needed for agricultural purposes.
13:40 It's needed in the making of steel. There's so many purposes and a lot of that comes out of the Persian Gulf that's not coming out and regular shipping is not moving either. So those economies in the Persian Gulf are being hurt and inflation in India Iran is over 90%.
14:01 But the people still survive and fight day to day to survive. And the one problem for Iran is the biggest revenue producer is oil and the blockade by the United States and the attacks on their shipping means they don't get that kind of revenue right now. >> I wonder if you can go back and talk a little bit more about the crack spreads.
14:24 This seems like an issue that is becoming important in the sector and not everybody may understand exactly what it means. I wonder can you talk about if this is a serious bottleneck in the refining space that we should watch or how are you looking at it? >> Yeah, there's the NIMBY, just like we're hearing data centers, the NIMBY, not in my backyard.
14:46 Refineries had the same thing. You had refineries on the BC side. They're not open anymore. They're closed. California had two. They're closing those and so the not in my backyard is an issue. Just going to the refining, they're producing right now at 97.8% US utilization for refineries. That's up from 94.9 last year.
15:10 So the refiners are running flat out to produce diesel and jet fuel that are needed in the domestic market. So what happens is a refiner buys crude, it goes into the refineries in the Midwest, Canadian crude going down, heavy crude comes in from other places into the Gulf Coast, it comes from Mexico, it can come from Colombia, as well as from Canada, and that oil gets processed by the refiners because the refineries are in short supply and a lot of it has been closed and the NIMBY argument, refining
15:43 capacity in the United States has not grown and to have a new facility built is not going to be possible for a while. Because again, the cost of the refineries versus refineries built 50 years ago is enormous. So the companies that are selling refined product, which we'd be talking about is diesel, jet fuel and a few other products.
16:15 Those product margins are going up substantially and I said they're making like a $100 a barrel. Just think about memory chips and data centers, those prices have gone up 30 40 times. Nvidia chips have gone up so much and there's more in each chip so we're used to massive inflation in semiconductors and this is now happening in a day-to-day product like diesel and jet fuel which to all of us who are going to the pump we all know that from Canada but it's really getting
16:51 very expensive in the United States as well >> right and we'll come back to talking about what's going on in North America but I also want to bring up China so as I understand when the war began China really cut back on oil imports but now it looks like it's coming back to market so I wonder what we should be watching on that front. Well, China had been building when prices were cheap, not only a commercial stock, for the refineries and the
17:23 companies operating gas stations and stuff. They were building up their capacity both in the commercial and in the strategic petroleum reserve for China. And they got that up to 1.4 billion barrels. Let's put that in context. As I said, the United States is 285. And a year ago that was 405.
17:45 So that number is like triple the highest number we saw for the US. And so they decided when the price of oil went up, when the war started in March, we're not going to buy any more oil. And that flexibility of not importing 10 million barrels a day and using their reserves helped to defay the price from going to, people thought when the war started we'd go to 150 or 200.
18:10 You may remember pundits throwing that out. But China became almost the ability to maneuver. So that didn't happen. Now China is looking at their teapots because there's a shortage of refined product that teapot refineries can make a lot of money. So they've allowed the teapot refineries to buy oil on the open market.
18:34 And what they're buying is not the oil like WTI or Brent. They're buying discounted Russian and if available discounted Iranian oil. So the shadow fleets that are out there, if the price of oil is, as we said, 101 for WTI and 105 106 for Brent, there usually is a discount for the Russian crudes. And so India and China are buying a lot of that crude and they're producing it and selling the diesel and they're making a lot of money and profits in the sector in Q3 when we see the results starting in late October, November are
19:11 going to be unbelievably strong and even if this continues through year end, Q4 is going to be better than Q3 and Q3 is going to be better than Q2. So I think we're looking at a very profitable energy market that has clearly shown that long-term demand is there and we don't have enough capacity and we need to bring on more capacity.
19:36 So Canada putting on more oil pipelines to the west coast and into Ontario, we can then grow production in Saskatchewan and Alberta to feed that. And then the opportunity in the United States is there as well. As I mentioned, the US production is up 85 from a week ago and it's up 452,000 barrels from a year ago.
20:00 So while people are saying that the industry is not growing, the industry is growing and the high commodity prices make it attractive to drill and bring on new production. >> Yes. And this is going in exactly the direction I was hoping to go. There's been so much disruption in the oil market right now.
20:21 How are you seeing the actual supply demand balances at the moment? >> Well, we're in the shoulder season now, September. So we had the high demand during the summer driving season and then at some point winter comes. Now, the El Nino effect is going to be interesting this year. Again, so winter comes, November, December and then January, February into March.
20:45 So those four or five months are very critical. And demand historically on average has been 1.5 million barrels higher in the winter months than it is in the shoulder season. So demand will pick up. So the question is is there going to be supply coming out of the Middle East? If not, prices will go higher or inventories globally will come down.
21:07 The SPRs may have to be, Europe may have to release more. China may say, "Okay, we're backing off from buying so that we're not pressuring higher prices by our own being demand." Remember, it's the buyer at the margin, the guy buying the last barrel affects the price.
21:26 And so that's really the problem is that if someone comes in, just for example LNG cargoes, there was an article that I read that the average price in the Asian market was about $23 US per MMBTU. Bangladesh was desperate to get a cargo and they bought it in the open market at $28.50 an MMBTU.
21:54 So the desperate countries, Pakistan, Bangladesh, others that need natural gas and do not have storage, they're buying those floating cargoes that are the spot market cargoes. And so that's where you're going to see the margin pushing the price higher. And Europe prices around 25 bucks an MMBTU and in Canada, we're a buck 40 on AECO for an MCF.
22:20 In the United States, you're about 2.80 an MCF US. So because we have a locked in North American market, we have low prices, but if you have an ability to get to the LNG markets, which you do now more and more in the US, it's up to 19 BCF. And that's going to be 30 BCF by the end of the decade. So they're going to have a big export market to fill demand.
22:43 Canada has 2 BCF, which is the LNG Canada, and potentially we could have six or seven by 2031 2032 if all the projects that are in the queue do go through and get built. >> Well, and I think that everything you've been saying is really just highlighting how volatile and uncertain the market has been this year. I want to go over to taking a look at the oil stocks.
23:06 Has your strategy changed since the war began? How have you been approaching the sector? >> Well, the sector is cheap period. So the question is do you want to own oil, natural gas, the service sector, so we recommend all of them but I wanted to throw you some numbers both for the oil and then the gas and what there is is there's three reserve categories: PDP, proved developed producing, which is what the banks lend against; there's 1P which is proven, which is proved developed producing and proven
23:38 that's not producing; and then there's 2P which you hear a lot about which is proved plus probable. So for example, Birchcliff, which is a natural gas producer, has a PDP of 7.2 years, a 2P of 31 years, but it trades only at 2.8 times. Normally, you want to see the PDP number and the cash flow number around the same level at this point in the market.
24:03 At the later part of the market cycle, they usually get closer to that 2P number. So that's how the cash flow multiples go up. So I'll give you another one. Peyto trades at 3.9 times cash flow, has a 9.9 PDP years and 28.2 for a 2P. And one more I'll give you which is a gas, cavy energy 3.
24:27 5 times cash flow, 12.7 PDP years and 31 years 2P. On the oil side the numbers are usually lower. But I'll show you one. Bonterra trades at 1.6 times cash flow. PDP is 6.2 and 2P is 19.7. InPlay Oil 3.5 times cash flow against 6.7 and 16.8 for 2P and then Obsidian 4.2 times cash flow and 6.9 PDP, 16.8 for 2P. So the cash flow multiple has to rise to PDP first.
25:05 Then it goes higher as the commodity prices go higher and as the market gets comfortable with paying higher cash flow multiples. And just think about the golds a couple years ago. Nobody cared about the golds. Even the price of gold was going up and then all of a sudden the gold stocks started taking off and you know more about that because you cover that regularly.
25:25 And so the cash flow multiples in the gold stocks took off. We are very early in that cycle on the oil side. And that's why I'm so bullish that I think that, even though we're close to record highs for the Canadian market today, it's 462 at the high today. We're now 454 for the S&P TSX energy index.
25:44 But I think that we're going to be looking at a double or more in the index. But I think there's five and 10 baggers out there in the energy sector if you have a nice mixed portfolio and I would say you want to own natural gas producers, oil producers in Canada, and on oil producers there's two choices, there's conventional oil and then there's the oil sands and we've been recommending Strathcona for a long time which has a very long reserve life, that's how long the oil sands have, and you want also the
26:20 oil service sector. So you've got names like Trican and CES and Total Energy. And Precision Drilling and Ensign Drilling. So there's opportunities in all three areas and I personally, my wife and I personally own names in each, we own 10 names in the energy sector and probably 18 in total.
26:42 So, it just tells you we do not have a diversified TSX weighting, but it's because we know the sector and we're comfortable in the sector. And we have a focus on dividend income for the majority of it. But we also have some of the more entrepreneurial speculative names. Because if I'm right, those are the five and 10 baggers.
27:01 >> Well, very very helpful to see where your focus is. And maybe we can look a little bit more at Canada because I know you're particularly bullish there. We're talking before we turn the camera on about work that the Canadian government is doing to move projects forward.
27:17 And of course, that's not just in energy. It's kind of across the commodities sector. So, what are you keeping an eye on there? What developments are you watching for? Well, the Carney government is going to reverse the Trudeau government which was anti-fossil fuels and so he wanted to put as many roadblocks in the way of things going on.
27:40 We heard today from Premier Ford that he wants to see the federal government, the provincial governments and the local governments all working together to speed up projects. That view is now the view of a lot of the premiers across the country and Carney and his government, the federal government are in favor of doing that because they realize with the trade war with the United States, we need new markets.
28:03 We need to show the US trade representatives that if you don't want to deal with us, there's lots of people who want to deal with us and we'll build the infrastructure to deal with them. So Churchill could become a bigger port for grain exports and maybe at some point energy. We may have the pipeline go into Ontario so they don't import from the US oil and natural gas, or mainly it's oil though I think is what Premier Ford is talking about, and then all the West Coast additions that's been talked about.
28:32 You've seen TMX announce that they want to spend 2.9 billion dollars to take the production up to 1.2 million barrels a day and then by 2032 or 34 add another million barrels a day in the TMX system. So there's lots of opportunity that's being talked about to get more production to the export markets.
28:55 The grain issue, we could ship more grain to Europe and Asia. We could do more metals. They're talking about a lot of mining projects going ahead, especially critical minerals that are very important. We have a nickel business in Canada, copper business in Canada. There's graphite and graphene.
29:14 So I think we're looking at a lot of opportunities for investors here and you want to have some of those names in your portfolio. So sit down with your investment advisor, discuss how much weighting you have in resources, what is appropriate given your age and risk tolerance, but have some exposure and if your risk tolerance is low then buy the Suncors and the CNQs and soes; if your risk tolerance is a little more then there's a lot of very very attractive
29:46 companies that we like that are still pretty large billion-dollar companies that are still very cheap so you can have liquidity. But again this is something that each individual has to decide what's appropriate for themselves but my view is people should remember how wonderful the 2000 to 2008 cycle was for resources and just take a stock that was around at that time, just look how well it did.
30:16 Many of them went up 20 30 times from the low to the high. Now, we've already gone up quite a bit from where we were in 2020, but there's still a lot of, if I was using a golf analogy, we're on the fifth hole of the golf course. There's still a lot of action to go and a lot of value as I showed you from the PDP versus the cash flow multiple.
30:35 So, I'm a fundamentalist, so the numbers got to work, but I also follow the history of commodity cycles. And to me, this is a very early one. We've talked for a while about being bullish and that we cover 35 companies and we're going to probably add a few more. And we cover the whole matrix of what we talked to you about, including royalty trusts.
30:57 So we cover Topaz and Freehold. So people who are subscribers to our product get a nice mix of names and then they can decide what's appropriate if they do it on their own or if they talk to their investment advisor and say, "Okay, I'd like some exposure to the oil sands. I want some exposure to the Montney natural gas LNG market.
31:17 I want some exposure to the Clearwater," because we saw today the news from the Tamarack Headwater merger to become an 80,000 barrel a day Clearwater play. So there's lots of opportunity in Canada and it's been very rewarding in past cycles and if people look back to 2020 or even, remember last year March April I said we had a table-pounding buy opportunity because we were in the 50s for the price of oil and I said this is unsustainable. These prices
31:48 can't stay that low and of course the price of oil is closer to doubling from that level from a year and a half ago. And I think the opportunity is still excellent. Doesn't mean there's not going to be pullbacks along the way. There was during that 2000-2008 cycle or 74 to 81. There's always going to be pullbacks.
32:09 And what our job is when those pullbacks happen and we get to an oversold situation, our job is to tell people we're now back in attractive buy zone area and these are the best bargains that we see out there and then decide what's appropriate for your own investment needs. Yes, I did want to ask a little bit more about timing because you mentioned the sector is cheap right now.
32:31 There are opportunities out there for people, but I think investors do see the ups and downs that we're going through and they wonder if they want to get in or they want to add to their holdings. Is now the right time or do they have other chances to get in ahead? So, how would you handle that? There's always stocks that are, let's say, the trophy names that get up there very quickly in value and they have high valuations, but there's a lot of stocks that are out there
33:00 that are very cheap. And I would think the natural gas and natural gas liquid stocks are very very cheap relative to historic and many of the service sector stocks are very cheap like Trican is very cheap. Trican, the high for the year was 8.40, it's now 6.30. The low for the year was 5.19.
33:19 So it's closer to the low than the high. So there's lots of bargains out there for people. You just got to look at what's available and what fits your investment parameter needs. And I think people should be looking today for the stocks to buy.
33:36 But there's also stocks that get ahead of themselves. And so that's where your advisor can help you. We also cover that. And we ourselves have harvested some gains in an oily name because it had gotten way ahead of where we thought it was worth and there were a lot of bargains out there that we've got cash for that we're waiting to put to work.
34:00 But again with the last move of $10 in the price of oil, even natural gas stocks have lifted a bit. But I think that the service sector is where the bargains are today and people should be looking there if they want to put money to work today and there's a rotation effect like we always see rotation in the market. I think there'll be rotation in the oily names if the price of oil backs off for some reason, let's say Trump loses the House and the Senate and then
34:28 Congress forces a resolution of the war, that then could bring the price of oil back into the 70s, oil stocks will back off and then there'll be another opportunity to buy oil stocks at bargain levels. But that rotation is normal, but right now if people said okay I want to put some money to work today I would say look at the natural gas and natural gas liquids names and the service sector.
34:52 There's a lot of bargains in those areas. >> Very helpful. And one more followup on the oil stocks. You mentioned the Tamarack Headwater deal. I wonder if I can get your thoughts on that. Is that a matchup that you like? And looking forward into the end of the year, are you expecting to see more M&A in the oil and gas sector? >> Well, Headwater is probably a bit ahead of the curve versus Tamarack on waterflooding and showing that the waterflood is working very well in the Clearwater, decline rates are coming down, and more oil
35:26 can be produced with the use of the water, primary recovery and potentially polymer might help as well and so Tamarack was very successful at that. They sold their Charlie Lake assets to become a Clearwater play. And then they added the merger with Headwater.
35:49 One share of Tamarack for every share of Headwater. And the merged company will be 80,000 boe a day. They'll be aggressively moving to add more waterflooding. And it'll get a premier multiple because it's larger which means more investors especially institutional investors can get into the stock. Just looking at the market cap, it's doubled because of that deal, because of the merger, and so I think that people should be looking, whenever they see something that's a bargain they should be taking advantage of it because you don't know,
36:23 Tamarack a year ago, if people look at the charts, it was under five bucks and Tamarack today is 13.58. And yeah, it was $5.20 at the low, 52-week low. >> Yeah, definitely.
36:48 I think these are things that people need to have on their radar. And as we are coming to the end here, I want to mention you have your Catch the Energy conference coming up next month. What details would you share with investors? Yeah. What we do here at our firm is number one we cover companies, medium and smaller companies that are not under the radar of the big brokerage firms' coverage.
37:11 And when we started the company in 2017 a lot of people were saying that analysts, it was a bad time in the market. Analysts were being fired and so there was less and less coverage out there. And so we said, let's fill that vacuum with something for individual investors because in the old days, people would have their broker doing more of the money management and they had the RRSPs and TFSAs and they were doing some investing themselves, but that's become a bigger portion of it. Wealthsimple, all these things have
37:37 now changed the way investors, especially Gen Z and the younger people are more comfortable investing directly on their own. And so we put together a product originally with 20 ideas, 20 companies we covered. Now it's 35 and we think we can do 40 as we expanded our research team. And so we then said let's put the research information with the companies.
37:59 So people who want to come to our conference, that'll be Saturday October 17th at Mount Royal University, and you'll have facetime with 45 companies potentially if we fill the last two slots. So not only will you hear a presentation in a 30 minute slot but then there'll be booths and you can go and talk to them.
38:18 So if you want to talk to Mike Rose at Tourmaline or you want to talk to Chris Carlson at Birchcliff or you want to talk to Ken Gray at Petrus, all of these CEOs are going to be there, and so you have the ability to talk to the managements of these companies and that I think is really extremely good value because AGMs are mostly virtual now and if you own a stock and you want to have a comfort zone, asking questions of the CEO will make you more comfortable owning the stock.
38:45 So we bought the conference and we have for all of our subscribers two complimentary tickets that they can use themselves or for family and friends and I think sir Dixon sent you an offer for people that you can send out that there's a $100 discount and then they get the two complimentary tickets and we're expecting 8 900 people this year, 45 companies, and it starts with breakfast and then we have lunch and snacks during the day so you're well fed and hopefully you're well
39:20 fed up here too. >> Well, we will have those details in the video description. Thank you for going over that. Sounds like it will be a great event. I will let you go, but before I do, any final thoughts that you would leave investors with as we're heading toward the end of the year? Things that they might be overlooking right now? Well, I think people are seeing gold go down, a little correction there, but I think that you want to have all the resources. So, while I'm an energy
39:51 specialist, you want to be in uranium, you want to be in nickel and copper and gold and critical minerals. So you've got to find the right names that fit your risk profile and your portfolio needs. But I would say to people, while energy is the largest component of the resource sector there's so many other attractive areas to be involved in and if you just think about what gold stocks did in the last 3 years and silver stocks in the last 3 years
40:23 that's the kind of upside, there's still a long way to go. Is gold going to go to 10,000, is it going to go much higher because of the debasement of currencies and government debt, and then I think you're going to look at all the other ones, critical minerals. You don't want China to have all of them.
40:39 And if there's graphite, graphene, lithium in Canada, those, hydrogen, all of those are going to be important. And you need to be looking at, a lot of them are smaller and speculative. But look what AI did from two years ago to today. Look at Nvidia stock. Look at the private market value of Anthropic.
41:02 The way things move is if something has a value creation the stock price can go nuts and I think that hasn't happened yet in energy but it has happened in semiconductors, it's happened in AI, it's happened in so many areas related to technology and then it happened with gold. So I think we're looking at this spreading in more and more of the resource sector in the years ahead and I own some of those other areas myself, they're
41:40 smaller components of the portfolio because the risk is higher, but I do have investments in the specialty commodity area because I think that those have a massive upside as the demand grows and the availability is not there and it takes a long time from discovery to the mine being in production and selling the product.
42:06 So it's a long cycle of investing versus energy. You drill a well, you can bring it on fairly quickly assuming you have takeaway capacity. Which we're building. But if you're doing uranium, if you're doing lithium, if you're doing any of these things, those things take a longer cycle.
42:22 So the investment opportunity on the upside has to be bigger because of the extra incremental risk. And we've seen reward in the past and I think history does repeat itself. >> Well, I definitely appreciate that broader commodities focus. I think that's really important right now.
42:41 Great way to wrap it up. Thank you so much for coming on as usual. It's always great to hear from you and we'll make sure to catch you again soon so we can see what is happening in the oil market. >> Super. And if anyone does come to the conference from listening to this podcast, please come over and say hello to me and the team and we'd love to chat with you about it and if you have any issues and questions, come and see us.
43:06 >> Great. Once again, I'm Charlotte McLeod with investingnews.com and this is Josef Schachter with the Schachter Energy Report. 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.