Thomas Weisel Partners Canada Inc.
Equity Research
Energy Sector Sector View: Favourable
Global Pressures Push Energy Prices Higher
􀁦 With respect to crude pricing, we believe that the risks of recession-led weaker U.S. demand are outweighed, in
particular by structural shortfalls in future FSU output, likely tight spare capacity within the OPEC block, as well
as the well-trodden expectation of continued demand growth from developing nations. Furthermore, given the
substantial cost inflation that has occurred over the last few years, we also expect a significantly higher long-term
or full-cycle equilibrium oil price. As such, we raise our 2008 WTI estimate to US$110/bbl (from US$91), our
2009 estimate to US$100/bbl (from US$90) and our long-term forecast to US$85/bbl (from US$75).
􀁦 On the natural gas side, LNG imports into the U.S. have stayed at exceptionally low levels and Canadian imports
into the U.S. will also likely be materially lower this year. These factors, in combination with a larger amount of
gas needing to be injected into storage in 2008, versus 2007, form the basis of our more positive natural gas
outlook. Specifically, we raise our 2008 and 2009 NYMEX gas price assumptions to US$10.00/mmbtu (from
US$8.75 in 2008 and US$9.00 in 2009) and our long-term forecast to US$9.00/mmbtu (from US$8.00).
􀁦 Our top small-cap pick among Montney Producers continues to be Birchcliff for its leverage to light oil at its
Worsley property and to natural gas on its Montney acreage, which now covers 35 sections of vertically delineated
land (more than 140 high-impact locations).
􀁦 Within our International E&P coverage, we highlight Bankers Petroleum, Coastal Energy, Pacific Rubiales and
Solana Resources. All are oil weighted, provide leverage to attractive, non-progressive fiscal regimes, have
exposure to exploration, development and appraisal-led newsflow, and offer significant upside to their target
prices from current levels.
􀁦 In our Oil Service universe, we raise our 2008 and 2009 Western Canadian well count forecasts on the back of
the higher commodity price deck, which pushes estimates and targets higher for most companies in the group.
Despite generally higher estimates, we downgrade the following three companies due to price appreciation:
Trican, Calfrac and Xtreme Coil. Going forward, our top picks by market-cap are: ShawCor in the large cap space,
Flint Energy Services, among the mid-caps, and Horizon North Logistics in our small cap (less than $500
million) group.
􀁦 Please refer to Thomas Weisel Partners’ U.S. research also published today for the impacts of this revised energy
commodity outlook on Alistair Toward’s and Michael Scialla’s coverage universes.

Oil Pricing
It has been a little more than a month since our last commodity price upgrade (March 12,
2008), yet oil prices are once more breaking records, with the NYMEX front month for
WTI currently trading at US$116/bbl. Oil prices are up 16% year-to-date and have surged
15% in April alone.
Credit Crisis Fuelling Flight to ‘Safety’
In the immediate term, the global credit crunch, or rather the frantic moves by central
banks such as the Fed to rescue financial markets by boosting liquidity, has resulted in a
substantial flight of capital into the ‘safe havens’ of oil and other dollar-denominated
commodities, as well as the Euro, all providing a hedge against the falling U.S. dollar
(Exhibits 1 and 2).