₪ David Pescod's Late Edition December 11, 2007
DELPHI ENERGY (T-DEE) $1.67 +0.01
NATURAL GAS $7.123 +0.091
BANKERS PETROLEUM (T-BNK) $0.91 +0.02
It’s that time again—as Josef Schachter and I decide to go head to head on another stock picking contest and he tells us he is just back from a few weeks at Cabo San Lucas in Mexico.
“When the wife says it’s time for a vacation, it’s time for a vacation” he says.
“Work hard, play hard.”
Lots of sailing, swimming and the like while the rest of us were looking at screens that were no where near as sunny as Mexico must have been. We could say that when the going gets tough, the tough get going or something like that, but I guess we should instead be civil.
And while he says he was down their relaxing, we know different. He was down there studying all the oil and gas companies he could cover with all the experts he could talk to, just so he could wax our ass again in another stock picking contest. And he wants everyone to know that he is currently ahead of us, two to one in that little contest.
The rules are simple—pick one stock and the best performer over the next year until December 11th, 2008 is the winner. Long or short.
Schachter picks Delphi Energy and for those up to snuff, you’ll know that Delphi is a mainly gassy story in “Red Stelmach’s” Alberta and as the chart shows you, like most gassy stocks, it has not been a pretty chart. Schachter’s argument goes like this; “Delphi is a different company as their debt is down to about $98 million and cash flow is close to $69 million.” They look like they are a survivor as many juniors are just giving up and selling out (Exalta?).
Delphi is currently producing just above 5700 barrels a day and Schachter expects them to average about 6575 barrels a day next year, with 83% gas and 17% liquids.
Schachter points out that GLJ estimates a net asset value of $2.85 to give some folks a sense of comfort. But for those looking for pizzazz, Schachter points to their Red Rock play with a Canadian major that has recently been cased. There are those that hope this could be a monster well in a new area.
Schachter has a target of $3.50 on the stock, but is counting on higher commodity prices to help. A year from now he expects oil to be at $108 WTI with natural gas at $9.00 AECO and $9.50 NYMEX.
If he had to predict a surprise, it would be a weather related event that could move gas to $10.00 AECO or higher.
To update us on some of his other favorite stories, he notes that Sterling Resources has just spudded offshore Romania and he would expect some results their by the second week of January. And sometime soon they should also be able to announce that they have a rig for lots of work in the North Sea.
Oilexco, another of his picks that fared well up until the recent correction, should press release this week with updates (they haven’t put a lot of info into the market in the last four months) and production rates and also results for work at Shelley and Huntington. If the western area of Huntington works out, Schachter says he is looking for a $20.00 plus target.
As to the general market which has been tough, he points to several brokers and financial-types that are looking for hand holding—and when they are nervous he suggests, that’s a sign of a bottom.
As for our own hard-earned money, we’ll place it on Bankers Petroleum and hope Abby Badwi can do with Bankers what he did with Rally Energy. Too much stock out, but the plays in Albania are massive and their assets in the U.S. are suddenly looking quite good.
The bet is the usual bottle of wine, except the guy with bow-tie knows his wines a whole lot better than we do! |
