₪ David Pescod's Late Edition September 24, 2007
CGX ENERGY (V-OYL.U) $2.06 -0.28
It’s been fun following the CGX Energy story, but now we figure the easy money has been made. They got what they were after which was the border dispute solved between Suriname and Guyana and they got most of the land they wanted, including potentially two of the biggest oil targets one can find anywhere on the globe.
Now Sully and team have to do the hard work of doing deals to invite in majors as partners, finding rigs, shooting seismic and all this sort of stuff that is routine in the oil and gas business that usually takes time and a lot of money. Once people find out how long it will be before drilling, things might cool down a bit.
But for those looking for something else to be excited about on this story, take a look at the map. Where are some of the biggest natural gas discovered being made these days? Well, you probably guessed it...it’s offshore Venezuela and in the Caribbean area around Trinidad which is just a hoot and holler away from where CGX has more land holdings right at the Venezuelan border.
Stay tuned and for those going to the COPIC Conference, this should be your number one question after when does Eagle and Wishbone get drilled...when does the areas close to the Deltana Platform get drilled?
NORONT RESOURCES (V-NOT) $3.60 -0.77
It’s been amazing how Noront Resources has taken the market by storm at a time when most junior explorers are just recovering from one heck of a crash and now it’s reached a point where Noront has actually evolved into an area play.
It’s hard for us to get past the fact that they still have only one good hole, albeit the fact that it’s a beauty, and has attained a market cap at one point recently that approached $600 million. You can buy an awful lot with $600 million and our tendency is to want to short this story.
Unfortunately, there are no analysts that currently cover this story, so in many ways you are on your own. We do touch base though with a fellow who doesn’t want his name used who built one gold company up and sold it for a nice profit and hopefully is doing the same thing again.
He suggests you take a look at Noront’s website and take a look at the core. “It’s beautiful” he says and it reminds him of what he saw when he was working years ago up at Thompson. “Same kind of stuff” he suggests, but he reminds us about nickel. “How many big nickel plays in the world are there?” he asks and you probably know by now that there are only a handful, but the handful that are out there are enormous.
He reminds us that he was slow getting into Voisey Bay when they made its discovery, but there had been enough drilling out so that at $10.00, he decided to get on board and there was still a lot left as the stock did an awful lot of growing beyond that point.
As far as Noront, he warns us that while the world has only a handful of huge nickel plays, the world also has a large number of small nickel pods that never develop past the test of commerciality. “Wait for additional drilling results” he says and “if they’ve got the goods, you still have time to get in”. If not, our original tendency to want to short the stock, remains.
PRIMEWEST ENERGY TRUST (T-PWI.UN) $26.30 +6.36
Little doubt what the story was on Canadian markets as the Abu Dhabi National Energy Company also referred to as TAQA makes an offer to buy out Primewest Energy Trust for $4 billion, which when the debts are included, makes it a $5 billion deal.
Abu Dhabi is like a lot of other small countries in an area of the world that used to be lousy with oil and short on money that these days is seeing oil production drop off precipitously, but suddenly they are lousy with cash. And suddenly they are investing it offshore and a huge chunk of it is going to Canada.
On August 23rd, TAQA agreed to buy Pioneer Natural Resources assets in Canada for $540 million and earlier completed a $2 billion acquisition for Pogo’s Canadian Unit, Northrock Resources.
The short chart on Primewest shows you what many of the Trust Companies have gone through over the last while since taxes on the trusts were changed, so I suspect there are a lot of happy shareholders today.
Meanwhile, with so much money in the Gulf, looking for safe areas in the world to invest and Canada looking awfully safe, the question is who next? There were more than a few oily companies that today bounced on thoughts/hopes that they might be next, including companies as diverse as Talisman and Connacher. |
