Geneat:
Red Sea Oil - ASE:RSO, Pink Sheets RDSEF (unable to find online quote source). I like the latter because E*schwab will trade shares at discount prices.
RSO is owned 50% by IPC and 9.5% by Sands Petroleum. It was created in November 1994 and acquired the Delta Tokar block offshore Sudan from IPC. They drilled an offset well to a Chevron discovery made in 1976, but were unable to find commercial hydrocarbons and the well was capped. They have been evaluating this property to see if further drilling was warranted.
In April, 1996, they acquired all of the Libyan properties previously held by IPC, including blocks NC176, 177, and 178. IPC had previously drilled an exploration well on NC176 in 1995, but it was p & a (plugged and abandoned). A test well on NC177 was spudded in January of this year by RSO, with Sands as a 40% partner, and it too was p & a after non commercial shows of hydrocarbons. The latest prospect, also on NC177, is as follows:
fin-info.com
This well is to be spudded in October. I took a small position at CDN .90 because I couldn't resist the price, and I expect a similar chart to evolve prior to and during drilling as before. It may not go quite as high because some dilution has occurred through warrants to finance the drilling:
chart.canada-stockwatch.com
I would buy additional on weakness to CDN $1, or, if I have cash available, I may add to my holdings if the price breaks out on high volume, as evidenced in Sept. of last year (the prices and volumes off the chart prior to Sept. looked about the same as they do now). This is a highly speculative play, one wildcat at a time. One thing to note on the price chart and a word of caution on these wildcats, the downward trend happened long before the non-commercial well was announced. I fully intend to be off the train before drilling is completed. IMHO, the risk of losing value with a dry well and waiting through another cycle is much higher than the marginal gain to be had by gritting your teeth and toughing it out and holding. If there is oil, the length of the development phase will allow plenty of time to buy back in on weakness.
IR for RSO in Vancouver: (604)689-7842
Alex |
