Energy Remains Attractive

I firmly believe that the energy sector looks attractive on a slight pullback. I already own Chesapeake Energy (NYSE: CHK). CHK is the best run natural gas company in the country. 90% of their remaining gas production in 2006 is hedged out at $9.17. 72% of 2007 production is hedged at $9.88.

I like the Canadian Oil Sands as direct play on higher crude prices. The best play is Suncor Energy (NYSE: SU). Although Suncor trades at a higher P/E than its peers; it has more organic growth than the competition. SU expects to increase oil sands production from the current 260,000 bpd to 550,000 by 2010. With Suncor you get oil sands exposure, ethanol, refining, and exploration.

I also like SLB on a pullback.


Note: I am long CHK