₪ David Pescod's Late Edition May 4, 2007
CDN. SUPERIOR ENERGY (T-SNG) $3.16 +0.22
CGX ENERGY (V-OYL.U) $1.07 +0.12
PACIFIC ENERGY RES. (T-PFE) $2.65 +0.20
This is the week of the COPIC Producers Conference in Toronto where the oil and gas boys from Calgary go to strut their stuff in Toronto for some pretty big audiences.
Sometimes stories stand out there and can attract attention immediately in the market and once again, Canadian Superior Energy has obviously done that. Their President, Michael Coolen gave a very aggressive speech and of course, they’ve got a very significant play that the market has been waiting for some time, finally about to start.
It’s offshore Trinidad, an area of the world that’s lousy in gas, that has consistently come up with some huge discoveries and the next team with a crack at it, is Canadian Superior. Kerry Sully, the former boss at Ranchmen’s and now running CGX Energy was there and notes that in their presentation, Canadian Superior had suggested that they were probably the most leveraged company in Canada to what could happen down there. Of course, Sully disagreed and suggested it was his own crew at CGX Energy that might deserve that award.
Just when Superior finally spuds their play after many, many months of delays (with the one big problem these days anywhere in the offshore world...getting rigs) will be here shortly.
Kerry Sully at CGX has a wee-bit of another problem...a border dispute. This has gone on for almost seven years now, but the end is in sight as decisions are expected by August. CGX has a massive 9 million acre holding offshore Guyana and depending where the border line might finally end up, they could have anywhere between eight and eleven very, very significant targets to be drilled at a time that the world is looking for big oil plays.
(Sometimes you look who the shareholders are in a company to find out whether you think smart money is involved in a play or not...and in CGX, one might think there are some pretty smart people that have been awfully patient on the CGX story...it looks like the various Sprott Funds invested in this play, have close to 15 million shares that they hold…)
They probably won’t be drilled this year because there is better quality seismic that needs to done, and that old problem of finding a rig is the other big problem and of course, joint venture deals still have to be firmed up.
What probably may attract attention to this area of the world is 100 million dollars being spent on two wells offshore Suriname that I’m sure if one of them is successful, will have everyone paying attention to the neighborhood.
If you’re looking for a little excitement over the next while, take a look first hand at the presentation Sully gave at COPIC for a taste of what tiny CGX’s assets are in offshore Guyana.
Also at the same conference and in order they presented, Canadian Superior and CGX Energy along came Pacific Energy, currently one of Andy’s Gustajtis’s top pick.
If you have time, take in that presentation as well.
Go to:
newswire.ca
eventID=1814780
CORRIDOR RESOURCES (T-CDH) $11.23 +0.19
“Are you out of your mind…” “You’ve got to be kidding, there’s no natural gas in New Brunswick…” I’m sure that was us not too long ago as we tried to be flexible and accept oil and gas guy Andy Gustajtis’s view that there might actually be natural gas in New Brunswick.
I’m sure there are still people questioning the sanity of this whole idea, but after being down to New Brunswick not too long ago and seeing the wells and seeing the plants being built, you are a believer that there’s something going on there.
Today Corridor Resources issues even more news updating their developments on their McCully project in New Brunswick and obviously the stock is now starting to attract attention as it achieves new highs. Whether it’s worth this price is always open to debate, but Vice President Paul Hopkins did tell us just a few days ago they expect to be testing the Frederick Brooks formation as soon as six weeks from now while the really deep and really exciting play—the Dawson Settlement, may not be drilled until the fourth quarter of this year.
We are starting to hear more and more this mantra of “$8.00 or $80.00” what some people think is the scale you could see on the stock over the next while and the high end assumes a lot...like both the Frederick and the Dawson Settlement, both have to come in big to justify a number anywhere near that. And the $8.00, suggesting that if it isn’t there, there would definitely be disappointment amongst its followers.
But still, what a play and it’s now attracting attention!
It’s that time again...tax season! And I’m sure with a rather good market, more than a few people had some rather unpleasant surprises…
Which gets us to the topic of flow through shares and how popular this vehicle is becoming as people try any method possible to shelter themselves from ever bigger tax burdens. There are lots of funds out there these days, many doing a good job, but we should point out that many of the oil and gas deals are based on stocks being priced at quite a premium to what they are trading for in an effort to get some sort of tax benefit.
In the mining sector it is done a little differently, where there is no assurance at all that the speculative mining company you are taking a punt on, will ever deliver on finding a mine and the odds are a long way against it.
One Fund that we found that has done rather well over the last few years is the Cordilleran Fund and its probably done well for three different factors. First is a booming junior mining market that has benefited many stocks, even some that might not have deserved it.
Secondly, this fund is very small (of only $5 million at a time) so they only take seven or eight positions, positions that they should know real well.
A third reason of course is that they’ve done some pretty amazing stock picking in these funds so you not only have your tax benefit, but in many of their past issues, have actually doubled your money.
We suggest that some credit might go to the person that has actually advised the Fund on what situations to get into and we interview him for a piece we hope to publish next week. And he has this to say about the “Mystery Stock” which is his top pick for the coming six to twelve months.
THE MYSTERY STOCK…..
“They have drilled mostly on one side of the
mountain and they found a lead-zinc deposit
that plunged into the mountain and it got rather
deep and expensive to drill. They went around
to the far side of the mountain to see if it came
out the other side. __________ has done that
and they found the deposit came out the other
side of the mountain five kilometers away.
They found 20% lead-zinc there. So in 2006,
they raised $15 million and they are going to go
underground and they are going to follow the
strike length of this deposit. It has world-class
potential.” |
