Gear Energy Ltd T.GXE

OPEC+ done , Nuttal pop soon... $60 oil sweetspot for GXE!

[AliNaimi]

With opec+ out of the way and $60+ oil heavy oil names have the most torque heading into summer. Beside from seasonal narrowing of differentials WCS is already over $50 USD and small cap names like CJ, ATH , ATU and GXE will thrive at $60-65 Cdn!

But look no further then Nuttal, he wanted in on HO names and found liquidity first in ATH (hence stock went on a ride) Then he desperately wanted to get into CJ selling his large cap oil names. He found a clever route but bought $2 up and once he promoted CJ on BNN last week the stock price soared.(+20%)

However, when speaking about CPG he let slip he had bought sizeable position in GXE. Stock popped to 64c(25%!) even without Nuttal speaking about the stock or making it a pick. It is a given he will make this new large position a top pick and I expect the stock will pop 20% or more based on the above. I suspect the only reason he didnt make it his top pick last week is because he is mopping up more shares.

Either way between Nuttal , OPEC+ and $65 Cdn WCS GXE should move smuch higher. Just looking forward to the next market call and 70c GXE!

[AlexPKeaton89]

Totally agree. AliNaimi You just have to look at what happened to CJ when he made it a top pick. CJ is a lot more liquid than GXE and it got a sustainable 25-30% pop on the top pick announcement. GXE traded 53M shares in March. That's 1.7M shares a day - most of those shares traded after the announcement of the debentures converting to shares in mid March. I'm sure Nuttall got a piece of

[oilypants]

Alex do you think GXE could be the perfect vehicle for another company to deleverage with almost no debt? This looks like a screaming buy!Cant wait until Nuttal returns to BNN. Or could it be promoted in his new FP articles?

[AliNaimi]

oilypants both is the answer to your question Nuttz will want this much higher after taking a sizeable position. I can think of a great combo for GXE whereby they merge with another small cap HO player and the combined entity will be well over 10,000 bbls/d (intermediate production status stock price rerating) The debt would be under 1X CF YE21 , corporate decline lowered with accretive metrics

[AlexPKeaton89]

100% oilypants. I think AliNaimi summed it up well as did Nuttall when hee was talking about Parax (top pick) and how they could be a takeout target for Vermillion (or someone like them) at a significant premium because of their cash flow hence increasing their multiple. I think Gear is perfectly situated for this and the sharks will be circling. Their the only heavy oil play (and one of the only

[oilypants]

Thanks Alex thinking of trimming CNR for some GXE. Would that be a good move?

[AlexPKeaton89]

I think so oilypants. It all depends on your appetite for risk. CNR is a stable dividend paying stock which is relatively safe but no real torque to the upside and no torque to oil prices. With oil you have to believe in the macro as much as the micro and I believe we are set up for a multi year bull run in oil that is just getting started. It sounds crazy to say from where they have come off from

[randalbartley]

Wow - this is really helpful analysis - esp AliNaimi and AlexPKeaton. I've been studying Gear since Eric Nuttall mentioned it on market call and bought my first shares early week and was disappointed that it didn't participate in the pop on Friday. That makes sense that they are cleaning up the final debentures. The chart looks very strong and that a pop is coming soon. It has a '