₪ David Pescod's Late Edition June 4, 2007
BOW VALLEY ENERGY (T-BVX) $6.50 +0.27
STERLING RESOURCES (V-SLG) $2.17 +0.36
DELPHI ENERGY (T-DEE) $1.96 +0.06
You can tell by the action on the markets today, that when the guy with the bow tie and the almost encyclopedic knowledge of Canadian oil and gas stocks was speaking, the markets were almost instantly paying attention.
Oilexco was down on the day until Josef Schachter started speaking about it and suddenly it’s up (Oilexco’s Huntington currently being tested, looks like it may be a lot bigger than had been expected and meanwhile Ptarmigan, which many suggest is one of their North Sea plays that looks closer to a gimme than most, will be drilled shortly) and we wonder when Josef’s report on Oilexco hits the street, if his target isn’t raised.
But the interesting part of the show (and to get the show go to www.rob.com—watch past videos at 12:00 PM ET) is always his three picks. While his last three picks saw two of them perform not that well, Oilexco probably more than made up for it and one should always pay attention to his new ones.
Bow Valley Energy is drilling in the YK/North Sea which features a good royalty regime, Schachter points out and we should point out it’s also a relatively safe area of the world to operate in. He suggests that down the road, they will simply be taking bigger and bigger slices of the action in the North Sea and he gives Bow Valley a target of $9.25.
A second pick of his was Delphi Energy and in the past, if you wanted to start a fight in an oil and gas bar, just mention Delphi.
The good news is it’s a rather prolific producer of natural gas...the bad news is, it’s got enormous debt, but Josef suggests it’s a survivor and with some new oil production coming on stream, he figures some of the former prices we saw on Delphi, might be revisited again.
A third pick was Sterling Resources, a name that has been mentioned by Schachter several times and today he mentions the company over the next four quarters will be exposed to almost $15.00 of upside potential and they only need to hit on a few.
If you had any doubt that people were watching and listening, the action on Sterling’s stock by the time the show was over, tells you that people were watching...and cared.
Interesting that Schachter suggested we may be hitting a short term peak in oil and gas stocks expecting a sell off down the road, but what seems to get him excited is where oil and gas prices and oil and gas stocks might be this coming winter. If you have a few minutes, make sure you take in the show!
PAN ORIENT ENERGY (V-POE) $4.85 +0.55
Is he the “Andy” of the West? Lots of people have kind words to say about Octagon oil and gas analyst Warren Verbonac and we are starting to learn why. One of his top picks has been Ithaca Energy (IAE) which has been going the right way for the last few weeks and hitting new highs today.
So far their drilling in the North Sea which is traditionally called high risk, Ithaca has gone two for two and now we will see one project develop in 2008 and the other in 2009 and excitement is starting be contagious as they should be drilling another project in the North Sea in August.
Meanwhile, another of Verbonac’s top four has a good day today as Pan Orient Energy hit on their play in Thailand. For people used to seeing results from huge depths, this one has a nice pay of 780 bbl/d from a mere 950 meters of depth. In today’s news announcement, Pan Orient CEO Jeff Chisholm stated, “NS-4 is the best well we have drilled in the L44 concession to date, and the production rates announced are exceptional for a shallow onshore well drilled and completed with a “slim hole” design. We have evaluated only one of the five potential volcanic zones within the NA Sanun structural closure and have yet to start appraisal drilling on the NA Sanun East discovery made earlier this year. 2007 is an active year with a remaining 25 well drilling program just underway…”
Obviously, this play is starting to get interesting and gosh, by darn, with that many kinds of locations, Verbonac just might have to raise target prices...
TG WORLD ENERGY (T-TGE) $0.60 -0.13
Every player in the market once in a while experiences that “month from hell” where some of their favorite stories don’t work out, they get hit with something out of left field...or worse.
One of our favorite analysts over the last decade has been Clive Stockdale and one of the stories he had picked, TG World Energy gave everyone a chance for a double or even better for a long time.
But on Friday they announced yet another miss on their high profile exploration in Niger with the Chinese National Oil Company and that’s not good.
We hope to have our interview with Stockdale, sometime in the next few weeks.
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