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Gold/Mining/Energy : Big Dog's Boom Boom Room

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From: energyplay	11/27/2006 3:57:26 PM
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I am looking at Gasco GSX. Used to be GASE long ago. They a re basically an assets play, get acerage, drill a few wells to prove the acreage, use the cash flow to drill more wells and buy more acreage and run more seismic. Also they borrow money against the proved acerage to buy nad drill more. Exit will most likely be a sale to a larger company. I believe the founder of the compnay have done this before. Their unit prodcution is up about 90% over last year. because of lower prices, they are still losing money, but keep drilling more wells each year. So GSX is very sensitve to NG prices, very physically levered, and a little bit financial levered also. The stock has been in a LONG down trend, and is now at $2.24. This can still go lower, but I am starting to nibble - meaning about 1/8 my usual position size. I hope to buy more on the way up. This stock will need some cold weather to push up the NG price - if not, I expect they could drop under $2.00.

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