₪ David Pescod's Late Edition September 15, 2006
OILEXCO INC. (T-OIL) $6.82 -0.18
GULF SHORES RES. (V-GUL) $0.60 +0.01
This is going to be an interesting week for Oilexco and for
many of its shareholders, because in the second half of this
week they expect news out on just how good…..or not their
Sheryl well is and that could make a difference to Oilexco shareholders
and for sure Sterling shareholders as well.
When we catch up with Art Millholland today, he is in an
ebullient mood looking forward to a trip to England that is part
business….showing up the details on Sheryl’s development, as
well as a little partridge hunting.
We now know a little bit more about the different hunting
sports in England, then we thought we’d ever know. Art tells
us that he is a “crack” shot (I wonder if some people on the
Bull Boards know that) and that there are three different types
of bird hunting with a big following in the British Isles. There is
grouse, pheasant (an import from Argentina) and partridge –
and partridge is what he is after, but the business end of the
trip is definitely centered on Sheryl’s results – a cased hole
and one gets the impression that the only question is how
good production rates might be.
He also confirms that production should start on Brenda in
the first week in November, which is the company’s first major
play, and also suggests that Laurel Valley is still scheduled for
sometime in late, late December and says “now that should be
a lot fun!” Laurel Valley is the high risk/high reward play that
could attract a lot of attention for Oilexco and junior partners
Gulf Shores and International Frontier.
But, while we got Art we ask him the question that many
people are cornering on these days and that is natural gas and
what does he see? Art reminds us that he cut his teeth in the
oil and gas business with Sulpetro (way back when), when he
was a newbie to the industry and he remembers that the business
was always “boom or bust” – “feast or famine” and
“nothing in between”.
He also notes that lots of analysts these days seem to be
suggesting there should be some ratio between oil and gas
prices, but he disagrees with the saying “there never was a
relationship in the past so why now” and he suggests that the
inventory is now so high plus landed LNG prices in the U.S. are
so low that if he had to predict prices he would look at $5.00
this Christmas and no better than $5.00 for next Christmas.
Oil on the other hand he remains quite bullish on, suggesting
$60.00 this Christmas and $60.00 next Christmas.
But back to Alberta………which he mentions is very much
a mature basin and wonders about some of the deals being
done on natural gas these days. “If the quality of the reserves
is there he suggests then some deals will make
sense”, but he wonders about a company like EnCana which
has decided to get out of the North Sea (where Oilexco has
decided to make its future) and is heading back to the mature
areas of Alberta (for gas of all things) - does it make sense he
wonders?
The key again, he reiterates, is the quality of those reserves.
Also with the cut backs in drilling for natural gas, he
suggests, that one sector that’s really going to get hurt is the
service sector. Six months ago, he suggests, the providers of
those services could ask any price and that was it, now all of
a sudden with people shutting down their activities this sector
could get hurt even more!
www.oilexco.com
www.gulfshoresresources.com
EVERTON RESOURCES (V-EVR) $1.12 -0.03
Eric Coffin of the “Hard Rock Analyst” had actually expected
September to be a good month for the junior mines.
It’s been anything but...it’s been closer to a disaster! At
this point, Eric tells us he is a little more confidant of precious
metal stocks than base metal stocks and still expects
the next few months to somehow turn around and to be
decent. When we ask him if he could only buy one stock
right now, which one would he be looking at—he suggest
Everton Resources. Between what they are working on, on
their Eleonore project right beside where Virginia came up
so huge, plus ongoing work on several plays in the Dominican
Republic, Eric suggests they are going to have lots to
talk about over the next few weeks and months (if you are
interested in ongoing work at Everton, today Graeme Currie
in the Canaccord Weekly Mining Analyst took an in-depth
look at Everton and wow—there is lots here to be looking
at. For a copy e-mail Sandra at Sandra_
wicks@canaccord.com). Meanwhile, Eric and his
brother David (the brother that does all the hard work) will
both be speaking at Joe Martin’s Cambridge House conference
in Toronto on September 24-25, and if you are interested
in the junior mines, it’s the place to go to hear some
interesting people speak—and the price is right.
www.evertonresources.com
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