Yes dabum, TPE is my largest position, thanks!
Teton is taking advantage of a financing arbitrage opportunity, due to the fact that there is no "junior oil company" stock market in or near Russia, and here it would take you 2-3 years since you'd have to do something like what Teton did: start on the Vancouver exchange, move to the OTCBB and finally to the AMEX.
There's a big land grab going on in Siberia right now because of new pipelines that are coming on starting in '05, such that pretty soon you'll be able to export everything you produce over there vs. just 35% as it is now. The domestic prices of oil in Russia are very low, ranging from $5 -- $15/bbl., so no one can grow from cash flow and instead you gotta keep getting outside capital.
Marathon Oil bought an American based company operating in Russia a few weeks ago for $285 M and plans to spend another $350 M over the next 4 years developing out their fields.
The payoff comes starting in '05. Its kinda like if you were back in the mid '70's in the US, and someone pulled you aside and said, I have seen the future and here is a graph of future WTI oil prices: oilnergy.com . Now, if you saw that (and you actually believed that fruitcake), what would you do? You'd go idiotic trying to get your hands on as much oil reserves as possible, issuing stock like crazy since you knew that you'd always make more in the end with more reserves.
Semper Fi! |
