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Athabasca Oil Corporation (ATH $6.81)
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Baytex Energy Corp. (BTE $4.11)
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Tamarack Valley Energy Ltd. (TVE $7.52)
Q: I own these Mid Cap oils that have generally defied the downward oil pressures in 2025 and performed well. All with the exception of Baytex are in a significant gain position.
For the past few months i continue to hear of Oil surpluses, and prices in the 50s or even hi 40s in 2026 before outgrowing the oil surplus in 2027.
Do you think it advisable to sell some of this position and look at re-entry in mid to later 2026 to crystallize some of 2025's returns on these mid caps?
For the past few months i continue to hear of Oil surpluses, and prices in the 50s or even hi 40s in 2026 before outgrowing the oil surplus in 2027.
Do you think it advisable to sell some of this position and look at re-entry in mid to later 2026 to crystallize some of 2025's returns on these mid caps?
5i Research Answer:
We would base this decision on sector exposure, rather than trying to pre-guess prices. The sector is in decent shape (balance sheets), dividends are solid (for most) and valuations remain low. We think 'some' exposure remains warranted, but do not think 15% exposure is needed (what the TSX is). With a possible Ukraine settlement and possible Venezuela action, and a possible economic slowdown, we would say conditions are not 'great' for a huge rise in the sector. But any cyclical sector can surprise. We would be fine holding the sector in a 5% to 10% position.