NEXEN is such a wacky stock to me,its one of those stocks that people feel should go higher,but every year just ends up being average at best.Every few months,someone whispers takeout,and it jumps,only to come back down again.I used to own it,didnt lose any money on it,just got..bored.But you are a smart guy Ebear,I'll watch this one and hope it works out for you...and yes I'll look into the others as well..cheers,and thanks for your picks

Part of my reasoning on NXY relates exactly to what you just said. NXY's been a disappointment for so long now that nobody's paying it any attention. This sets my contrarian fur on end. Did you notice Korean National Oil bought Harvest Energy Trust back in Oct? Harvest had a lot of debt and wasn't well favored among trusts, yet KNOC bought them at a 47% premium and retired all their debt, something the market really wasn't expecting.

There are cash-rich buyers out there looking to acquire reserves. Nexen's holdings may not fit with a North American strategy, but what about Korea, China, etc.? Some anxious foreign buyer looking to build a position in one of NXY's core areas could buy them and sell off the unwanted assets to other consolidators working in those areas. The key here is to think global. Nexen's a bit spread out, which makes them unattractive from one perspective, but perhaps interesting from another.

My other reason is that NXY's been trading in a well defined range for almost 6 months now, giving you a chance to trade the swings and get your average cost down (now that i've said that, the pattern will probably break..lol).

I would have put Encana on that list - my first choice actually - except it's already had a strong move and that was basically a "buy now" list. ECA's worth watching though. Notice the big move on the back of Exxon's takeover of XTO. Also, notice that Total has taken a 25% stake in Chesapeake's Barnett assets. This sector's in play now - these are the opening moves.

Another interesting ECA development is this item from the Globe & Mail:

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Globe and Mail -- One of Canada's biggest energy companies is asking the federal government for $1-billion to kick-start a transformation of the country's highways.

Over the past few months, EnCana Corp. (ECA-T32.700.331.02%) has been in talks with government officials about a plan to build a network of hundreds of compressed and liquid natural gas fuelling stations between Windsor, Ont. and Quebec City, Canada's busiest highway corridor.

EnCana, one of the continent's biggest suppliers of natural gas, is also pushing Ottawa to create tax incentives for trucking companies that convert their 18-wheelers from diesel to natural gas engines. The company has been working together with Westport Innovations Inc., a maker of natural-gas-powered truck engines, and the Canadian Natural Gas Vehicle Alliance

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I'll just add that Westport Innovations is another company on my watch list. They're right here in Vancouver and I've been meaning to pay them a visit but have been too busy lately to get it together.

I'm thinking 2010 may be the year that Peak Oil gets some traction as an investment theme. The global financial crisis has pushed energy off the front page, but that may soon change. It hasn't escaped notice that the worst recession since WWII only took oil prices down for a very short time, and that even with prices as high as they are now, new discoveries just aren't being made at a rate needed to maintain reserves. To me that suggests a buying spree of small and intermediate producer/explorers is in the offing.

One final point. Although most of us here are focused on mining, particularly the PM's, energy stocks tend to be more liquid, thus easier to trade. You can also have more confidence in price charts for the same reason. Personally speaking, I'm a Graham & Dodd kind of investor, but with two major crashes in less than a decade, and everyone with one foot out the door now, I've had to adopt trading simply as a means of survival. Regardless of how much confidence I have in a company, the market may not agree, or may follow the "sell now, ask questions later" approach that looks to be the new norm. Whatever - i take my cues from the market - I long ago gave up trying to tell it what it ought to do ..heh.

ebear