In a recent column about Nabors, I argued that the drilling and service company is benefitting from the recovery in oil prices. I have illustrated that recovery in the chart of West Texas Intermediate oil prices.

Since the oil industry’s creation in the mid-1800s, it has always been a boom and bust industry, with booms following busts as night the day. Now, I believe, the stage is set for the next boom to begin. However, in the short term it isn’t likely to affect the shares of bitumen (oil sands) producers much, because those resources are expensive to produce, and to transport, and to turn into fuels and petrochemicals.

That said, I’d like to mention the names – and show the charts – of three Canadian oil and gas stocks I recently bought. The most junior of those companies are Journey Energy (JOY.TO)(JRNGF) and Yangarra Energy (YGR.TO)(YGRAF). Better established (and just beginning to turn) is Bonavista Energy (BXE.TO)(BNPUF), which has only recently begun to show new signs of life. I also own XLE, an energy spider, which reflects the behaviour of the big petroleum companies on the S&P. The following charts (and the brief descriptions associated with them) all seem to show the same thing – at least, that’s my view. See whether you agree.

The chart above  is for  Journey Energy (JOY.TO). Journey has grown from 4,000 barrels of oil per day, of which 47 per cent were liquids to 10,500 barrels of oil (57 per cent liquids) through organic growth and acquisitions during a two-year period. The breakout seems to reflect fundamental happiness – JOY, one might even say – within the investment community.

The company has “significant insider ownership,” The Globe and Mail helpfully pointed out. “Five of the 10 largest shareholders are company officers (CEO, COO, VP). Thus, “those making decisions for the company have a lot of ‘skin in the game.’”

There was great anticipation a month ago when Yangarra (it’s from an Aboriginal word meaning “spirit of the Earth”) put out a news release describing new mineral rights acquisitions and its fracking program. The breakout suggests that someone knows something which isn’t yet on the company’s website. 

The chart above is for Bonavista (BNP.TO). The company is well established, with operations throughout the Western Canada Basin. As importantly, it benefits from smart management. Of the company’s I am showing in this article, it was the first to go on the uptrend. Support (see the red/green support resistance line) sits at about $3.65.

Compare these charts to the Energy Spider, which reflects the behaviour of energy stocks on the S&P 500. As you can see, the breakout is by no means so clear in this case. Put another way, the big oil companies aren’t doing as well as the smaller players in Canada.

Canada, you rock!