Bonterra Energy Is A Buy

I'll be honest. It's been a while since I found an energy name compelling enough for a write-up. Athabasca Energy was a name we picked up earlier this year primarily on the prospects of tighter WCS-WTI spreads, but even then, it didn't take up a meaningful position in the portfolio.

We issued a trade alert before this write-up that we are closing our long position in ATH and switching the proceeds to Bonterra Energy. For us, the calculus was very simple. We believe we are in the early stages of a long oil bull market, and as a result, we need to find energy names that exhibit the following qualities:

• Long reserve life.

• Repeatability in operational results.

• Financial leverage is present (debt) as the equity holders get additional upside (from debt paydown).

• Cheap trading multiple.

• High insider ownership.

Bonterra Energy meets all of these criteria. So without further ado, let's jump straight into why we like this name.