₪ David Pescod's Late Edition September 29, 2006
OILEXCO INC. (T-OIL) $6.48 +0.30
TUSK ENERGY (T-TSK) $2.95 -0.04
TRUE ENERGY TRUST (T-TUI.UN) $10.58 -0.22
With oil and gas stocks, particularly gas stocks in the tank the last while, some people certainly know what to do...like run away! The soft-spoken, never ruffled, Alex Squires, the oil and gas guy with Brant Securities went off to an oil and gas conference, but not one of those you’d expect in Denver, Houston, Calgary or places like that. Oh, no—he finds an oil and gas conference in Bermuda! You guessed it, the beaches were beautiful although he admits that they did catch the tail end of a hurricane.
He does admit the markets have been ugly, but he remains a believer that commodity prices are coming back. His argument for natural gas seeing higher prices remains that we are going to see a lot of fuel switching if oil and gas prices remain where they are and in places like New England and along the American coast, people will take advantage of the current low gas prices and switch from fuel oil.
Plus the typical cutbacks in drilling, he also points out that if you go out on contracts a year or so out, prices for both oil and gas are pretty tasty.
He has an interesting selection of three top stories right now and for viewers who regularly paid attention to him (and he’s always an entertaining guest on ROB-TV) Oilexco has been one of his top picks for a few years now and he’s done well by it. He just assumes that they finish work shortly, successfully or not on their Sheryl project and move onto Shelly, Kildare and the like and his target from past picks suggests $10 to $12 in the first quarter of next year. Needless to say, some good oil prices would help achieve that target.
As a second pick he goes with Tusk Energy, a company whose chart hasn’t looked that healthy over the last while (many oil and gas charts have looked sick of late) but Squires points to very important developments for Tusk just announced in the past couple of days. It’s a little deal, seemingly, but it makes a big difference to a company like Tusk. Much of the company’s future is tied up in Mega and Gutah - two situations that are only accessible over the last while during freeze up.
Impossible to get the equipment in and moved around on anytime but freeze up, but now that the company has received the approval to build an 18 mile road, they expect to be able to work year round. And now they’ll have a better handle on those projects and see if it can’t ramp up production.
A third pick of his is based on higher natural gas prices. True Energy Trust, we featured yesterday (and despite some helpful editing by True themselves, totally missed on their potential drop in payouts. It’s 18 cents a month they can lower it to, not a quarter) and it’s a bet on a turn in natural gas prices.
The chart on True Energy Trust is like that of many other companies that are mainly gas and True Energy is 67% gas. If gas prices head higher, I suspect there is going to be a lot of companies go the right way.
Squires, when asked to make some predictions suggests that gas will be at $7.00 an mcf this Christmas and $8.50 next Christmas. Those will be great numbers, compared to the current $5.00 range that we currently see.
On the oil side, he expects $65.00 this Christmas and $85.00 next Christmas.
AURELIAN RESOURCES (V-ARU) $29.75 -0.70
CORRIENTE RESOURCES (T-CTQ) $ 4.77 +0.07
CELTIC MINERALS (V-CME) $ 0.55 -0.02
He’s called “Fast Eddy” by his friends and he has lots of them. Dr. Edward Schiller we find is always a ball of energy as well as more than a little insightful.When Petro-Canada had decided to set up a mining sector years ago, he was the guy they picked to run it.
He was, not too long ago, on the board of up to seven different mining and oil and gas companies, and one of them, DiaMet Minerals was one of the successes of the past decade. And Schiller reminds us today that they are very much in dept to Chuck Fipke, the former President of DiaMet, whose persistence over such a long time, that there were actually diamonds in the Arctic paid off. It made a lot of people in the Kelowna area,
such as himself he suggested, financially better off.
With health problems causing him to cut back just a bit, he is currently on the board of two companies (Tanqueray and March Resources) and these days he is able to do what he wants, when he wants.
Recently, he just wrote an article for the “Miners News” out of Idaho, which was his look and take on the mining discoveries currently in Ecuador in an article he entitles “Ecuador, the New Golden Country of the Americas”.
When we caught up with the man himself on September 26th, he suggested a big event in the history of Aurelian Resources was about two to three weeks ago when Dr. Richard Sillitoe (an expert on epithermal gold systems) took a look at the project. His report was like “a good housekeeping stamp of approval” he suggests, as he is considered one of the world’s experts on that type of deposit.
Right now when we ask Ed which plays in Ecuador would be his top ones, he suggests Aurelian Resources could still do a lot of traveling and that those huge, 100 meter plus widths on the Aurelian discovery, means a lot of ore has to come from somewhere. The implications for ever larger tonnage is there.
As a second pick, he goes with Corriente Resources. He notes Goldmarca (GML) as one of the players with also a recent 100 meter discovery, but he points out that company is run by some Aussie’s and like most Australian-based companies, they have a lot of shares outstanding—250 million by our calculations.
What else is he watching these days? He is off to Voisey Bay to do a tour of Inco’s big operations there and to take a look/see underground, but he is also taking a look at a junior in the area—Celtic Minerals (CME) which has an exploration play in the area, which he figures has some merit. “When you are looking for a new mine” he suggests, “you always tend to start not too far away from an old mine.”
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