Canadian oil and gas is the place to be, says David Winters, CEO of Wintergreen Advisers in Milwaukee, WI.
Energy “companies benefit from [operating] in Canada [where] there’s rule of law and reasonable royalty rates, and these companies are often times well-run,” he adds. “[For] investors, Canada is one of the best places to [be in] oil and gas.”
In other countries, the same kinds of companies may be located in regions that are controlled by the government, or in areas that are unsafe from a nationalization point of view.
The two companies Winters invests in are Canadian Natural Resources (CNRL) and Birchcliff Energy.
Regarding CNRL, he touts its growth and solid management, as well as how its stock is undervalued. And though Birchcliff is a smaller, Calgary-based company, he says, it offers many of the same benefits.
That’s largely because Birchcliff “is substantially undervalued,” says Winters. “It’s [also] well-run and [management] does everything it can to add to the value of the company.”
Transport and pipeline companies, such as Petronas, are also investing in Canadian projects, he adds, which boosts our country’s appeal. “The shorter-term issues of transport, and concerns about routes to market will be resolved over time. We’re bullish on Canadian oil and gas, and Canada in general.”
But Winters cautions it’s difficult to predict which upcoming projects will offer opportunities. “We’re hopeful that Keystone will happen…There’s so much money at stake.”
Currently, he finds there’s more oil being transported via tank car on railroads, which are “virtual, flexible pipelines,” says Winters. In Canada, “the stocks are cheap and the future is bright.”