₪ David Pescod's Late Edition October 20, 2006
RIO NARCEA GOLD (T-RNG) $3.02 +0.12
The chart to the left shows you that Rio Narcea has had more
than a few bumps over the last while. Seemingly ever delayed
on some of their projects such as the Aguablanca and
the humility of being bounced from the TSX Index, it’s a
stock that’s been going down while commodity prices have
been going the right way. Now things seem to be changing
and mainly because of the record high prices for nickel.
One analyst tells us that “there is simply not a lot of alternative
names in the nickel business and with Aguablanca finally
delivering good production results, and Tasiast expected
for production in mid-2007, the company is being
taken out of the penalty box.” While most analysts have a
$3.00 target, some analysts will have to revise those numbers
upward, given the surprisingly high price of nickel.
Nickel hits a new 19-year high today.
CAPITOL ENERGY (T-CPX) $5.09 +0.24
I’m thinking either rightly or wrongly, that we may be at the
bottom in the oil sector for a while (at least for the winter)
and we’re working on our “Doubles Issue”...some of the oil
and gas stocks that we think have a shot at seeing their
stock prices do nicely over the next while. One of the stories
we’ve been looking at and talking about from time to
time is Capitol Energy. Today company President Monty
Bowers tells us, “if you look at our company presentation
(www.capitolenergy.ca) you’ll note that we were supposed
to start our water flood about the middle of October.” “We’ll
have some disclosures by the company on November 9th”
he tells us, after the company’s board meeting. This is all
about their big discovery, the Dixonville pool, which is
probably one of the biggest oil discoveries in Alberta in decades,
but it’s not the most obliging pool of oil out there. We
suspect sometime in the last while, they’ve started a water
flood to see if they can’t increase production and water
floods have a high percentage ability to increase production...
the only problem is, you don’t know whether it will be
a small increase or a big increase. Over the next three
months, one will get an idea of how good those new production
numbers will be and needless to say, those numbers
will be important.
DELTA PETROLEUM (US:DPTR) $26.00 -0.14
We got interested in Delta Petroleum ever since we interviewed
Eric Sprott, a high profile Canadian investment manager with
Sprott Asset Management, and one who is very much in the
“bullish-camp” on commodities these days. One of his favorite
stories was Delta Petroleum and we have been following it ever
since! It seems like every week there are additional analysts,
down south of the border, that start following it and many of
them have some pretty ambitious targets…….that’s if any of
their three very high profile plays work out and there is probably
nothing with a higher profile then the Columbia River Basin.
It’s been drilled over the decades, but only with recent technology
might they recover just what might be down there. It’s
hard to believe, but they have already spent two years drilling
this play and we still don’t know what may or may not be down
there. When we talked to the company the other day, the suggestion
was that because it is such a big intercept and there
will have to be so much testing done, we may not know what
they have or don’t have until closer to Christmas. Delta’s partners
in the play are big names like EnCana and Shell and needless
to say some have some lofty expectations. One thing we
have noticed lately, is that every day it seems to hit a new high! |
