Mark Lackey: Energy Stocks Could Deliver Stealth Profits

In the midst of a global market lull, many companies are sitting on their hands, argues Mark Lackey of CHF Investor Relations. That's why he's scoping out smart management that's keeping busy and making great progress -- whether or not the markets are quick to notice. Learn who's getting a running start in the uranium, oil and natural-gas spaces in this Energy Report interview.

The Energy Report: It's been a busy five months since your last AREVA ) on its Hook Lake uranium project and completed an NI 43-101-complaint technical report there and on its Red Willow project. Purepoint just raised some money and Chris Frostad, Purepoint's president and CEO, is continuing to move it forward. He'll be doing a lot more drilling over the next year with some big people behind him. Again, it's a micro-cap company, but if you're going to buy some micro-cap companies, buy the ones with active management, good properties, some money in the bank and good joint venture partners. Then you at least have a good chance of success down the road.

TER: These didn't all start out being micro caps.

ML: No they didn't, and that's an interesting point. I can remember when it was trading at $1.60 back in the better uranium days. It's way more advanced now at $0.07, which shows you what happens when you have such a bad market environment. The market doesn't seem to differentiate, at this point, between uranium players that have stronger odds at being successful and those that don't. They're all in the same basket. Once we get better uranium prices, I think investors will start to focus on which companies actually have not been sitting on their hands.

TER: So what does the year ahead look like for energy stock investors and where do you feel they should be focusing their attention for maximum upside?

ML: I'm expecting a moderate upward movement in oil prices, but certainly not a boom. North American natural gas should move higher. Natural gas prices in Europe and China offer some pretty exceptional opportunities for companies selling into those markets. My three-year outlook on uranium is way above the consensus. I actually see uranium trading this time next year at $65/lb, compared to the current spot price of $44.75/lb. Then I see it at $80/lb at the end of 2014, and $90/lb in 2015, all based on the supply and demand factors I mentioned earlier.

TER: That would certainly bring life to a lot of these cheap uranium stocks. People are going to be all over uranium again if you get a double in the price.

ML: A lot of people may think I'm overly optimistic, but I would point out that when we first liked uranium at $10/lb in 2001, we thought there was some pretty good upside. I never expected it to go to $135, like it did in 2007. But, it does show you that when the uranium market starts to move, it usually moves fairly significantly and can create some definite investment opportunities.

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TER: So there's something that people certainly should focus on in the next few months to a year. We greatly appreciate your time and input today, Mark.

ML: Thank you.

Mark Lackey, executive vice president of CHF Investor Relations (Cavalcanti Hume Funfer Inc.), has 30 years of experience in the energy, mining, banking and investment research sectors. At CHF, Lackey involves himself with business development, client positioning, staff team coaching and education, market analysis and special projects to benefit client companies. He has worked as chief investment strategist at Pope & Company Ltd. and at the Bank of Canada, where he was responsible for U.S. economic forecasting. He was a senior manager of commodities at the Bank of Montreal. He also spent 10 years in the oil industry with Gulf Canada, Chevron Canada and Petro Canada.

DISCLOSURE:
1) Zig Lambo of The Energy Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Energy Report: Fission Energy Corp. and Strathmore Minerals Corp. Interviews are edited for clarity.

3) Mark Lackey: I personally and/or my family own shares of the following companies mentioned in this interview: None. I personally and/or my family am paid by the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview.

4) CHF Investor Relations: Greenfields Petroleum Corp., Primeline Energy Holdings Inc., Bri-Chem Corp., Strathmore Minerals Corp. and Forum Uranium Corp. are clients of CHF Investor Relations and pay cash fees to CHF; and CHF may have stock options or own stock in these companies.

Written By: The Energy Report