David / Symposium
Small fry prove they can soar like eagles
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Little oil and gas companies that brokers and analysts ignore can perform like gangbusters when they get a chance to tell investors their stories.
Not quite three weeks ago, overflow crowds were turned away from the first investment symposium organized by the Small Explorers and Producers Association of Canada.
Since the Oct. 16 event, when 16 companies made presentations to an estimated 650 potential investors, here's how their shares have performed:
Only 15 of the companies are publicly traded. Of these, eight posted gains during the 13 trading days that passed before markets closed Monday. Six recorded losses and one was unchanged.
The best performer by a wide margin was First Star Energy, which notched up a 55.56-per-cent increase. The poorest performance was that of Torino Oil and Gas, which fell two cents, or 10 per cent.
The average gain for all 15 stocks was 4.73 per cent, far ahead of both the Toronto Stock Exchange 300 Index which is up 2.34 per cent since Oct. 16 and the TSE oil and gas producers sub-index which gained 1.39 per cent.
"It's certainly a positive thing," says SEPAC director Michael Lang, who organized the symposium.
"It means the market has become more aware of these smaller companies. It's provided more value for these companies vis-a-vis both the TSE 300 and the oil and gas index.
"It's always tough to base these things on a short time frame and generalize on two or three weeks, but if you annualize them the returns would be hugely different.
"It's been about two and a half weeks, so if you multiply those numbers by 20, you get a 46- per-cent annual return on the TSE 300 and 28 per cent on the oil and gas index, but it's almost 95 per cent on small producers."
First Star Energy president John Squarek is understandably happy about the symposium.
"It was excellent," he says. "It allows small companies like ourselves to reach public markets. It's difficult for people to know what we're doing and it's expensive to advertise. We can't put a lot of money into that. We have to put the money into the ground. That's why the symposium really helps."
Why does Squarek think investors have made his company the biggest winner to date among the symposium participants?
"The key is the deep basin play," he says. "We acquired acreage and are looking to negotiate a farmout."
First Star obtained the rights to eight sections of land at Crimson Lake, near Rocky Mountain House. The company is hoping to find a Devonian gas deposit at a depth of about 4,000 metres with potential for one to two trillion cubic feet of natural gas (150 to 300 billion cubic feet net to First Star).
"The other thing that probably got their attention is that Pan East Petroleum has a well about half a mile away and is now drilling into the Mississippian formation at about 3,000 metres. Those two things have made it a bit different."
First Star was formed in 1993 as a junior capital pool. A new management team took over in 1995. They sold some properties, consolidated others and purchased three property packages.
The company's production has grown from zero in September 1995 to a current 70 barrels of oil equivalent daily. First Star is about to complete the $225,000 acquisition of a gas property that will bring production to 100 barrels of oil equivalent daily.
Share Price Changes
Companies Participating in Sepac's Oct. 16 Symposium
Oct. 16 Nov. 4 Change
Artemis Energy private company
Bellator Exploration $.43 $.42 -2.33%
Best Pacific Resources $1.19 $1.20 +.84%
Big Horn Resources $.72 $.65 -9.72%
Calahoo Petroleum $.98 $1.03 +5.10%
First Star Energy $.18 $.28 +55.56%
Founders Energy $.70 $.75 +7.14%
Ironwood Petroleum $.80 $.90 +12.5%
Midas Resources $.44 $.43 -2.26%
New Cache Petroleums $8.35 $8.30 -.60%
Pointer Exploration $.95 $.87 -8.42%
Probe Exploration $1.06 $1.24 +16.98%
Search Energy $2.00 $2.00 unchanged
Torino Oil and Gas $.20 $.18 -10%
Truax Resources $1.27 $1.30 +2.36%
Vintage Resource Corp. $1.05 $1.09 +3.8%
AVERAGE INCREASE +4.73% |
