₪ David Pescod's Late Edition January 25, 2008
BRIDGE RESOURCES (V-BUK) $1.30 +0.07
MARCH RESOURCES (V-MCF) $0.46 -0.04
SOLANA RESOURCES (V-SOR) $2.86 -0.04
OILEXCO INC. (T-OIL) $12.34 -0.07
CGX ENERGY (V-OYL.U) $3.94 +0.17
A few days ago Malcolm Shaw of Wellington West Securities had just published a research report entitled “Nine Stocks with Big Potential Catalyst for 2008” and had a list of some of big high risk/high reward plays coming up over the next year or so with names such as CGX Energy, Energulf Resources and the like, that had potential to change a person’s lifestyle. And big odds that some of them won’t.
It was happening at a time in the market that we were all fearful of thousand point drops in the market and as we commented, our own feelings swung every few seconds from fear to greed and the like.
But Shaw had a bit of a salesman in him and when we asked him if he could only buy one of the nine stocks that he featured, it would be Bridge Resources. So we ended up owning a few. Now that the market has had a pop and things look like they are stabilized, we are whining yet again that if Shaw had been a “decent salesman” at all, he would have talked us into owning a lot more Bridge Resources!
Of interest to us though was that in the conversation with Shaw, was the reminder that most of these plays all had big downside risks if some of their plays were not successful. When we ask him why Petrolifera Petroleum didn’t make his list, he said that Petrolifera is simply “too blue chip” and had all sorts of cash flow to protect it on the downside. Oh boy, that’s a reminder!
He also suggested that with Bridge Resources in particular, while it would be his top pick, they were lacking in promotional ability. Oh really?
Which gets us to Dave Antony who is Chairman of Bridge Resources and is supposed to handle some of those IR responsibilities for Bridge, so it’s about time we checked in with him, don’t you think?
As far as investor relations, Antony said that they’ve been more than a little bit busy getting their financing closed and that CEO and Director Ed Davies and VP Exploration Tom Stewart has spent an awful lot of time on the road over the last while, closing a $44 million financing. He also suggests that this is a pretty ugly time in the market to have to raise that chunk of change, but it is now closed.
As far as timelines on their different projects, he brings us up-to-date that the company now has 17 blocks in the North Sea of which they own 100% and 4 blocks where they own 50% comprising 21different prospects. They are going to be busy, very quickly as they will be drilling the Durango gas play in the second quarter of this year and it’s considered a development play. Antony tells us that they are going to be drilling it with a single horizontal well that they hope to have production on as soon as the fourth quarter of this year. All the equipment has been lined up and yes, they would be very disappointed if this is not a successful well right away. It’s an $80 million project.
For those looking for excitement though, that comes with the Piper. They own 100% of it and they are currently entertaining offers as they hope to reduce that interest, but it is a very significant play and the reason that it made Shaw’s Nine Stock List is because it could have as much as 400 to 500 million barrels. And if that play hits, that’s what could change a person’s lifestyle.
Sometime in the third quarter they will be drilling a second gas play—the Aspen. The bottom line Antony says is that they are going to be busy from early February until the end of the year with a steady flow of information.
As far as lack of investor relations (a point he chuckles about) he suggests that that issue will be taken care of shortly. Well, we’ll find out what he means by that because the irony is that Antony is currently involved with two different plays, both of which are going to be very timely and both of which have an incredible impact.
March Resources didn’t make Shaw’s Nine Stock List, but it certainly makes our big list. And it’s one of those plays that is a “one-trick pony.” March is currently drilling the Pica Project in Chile that was spudded on January 22. Antony reminds us that the target is somewhere between .8 TCF and 1.5 TCF, which folks, is enormous in natural gas starved Chile.
The project he points out, was previously owned by a private American company that actually has reports suggesting that targets could be as high as 4 to 5 TCF.
He also points out as many Bloomberg articles have done so, that Chile is currently starved for energy and has faced energy bills that have gone through the roof. They have to import most of their gas from Argentina and Peru and prices are going through the roof.
While most people can do the math involved with oil, natural gas is a little confusing as what the hey is an mcf and with so many zeros involved with natural gas, just what could the Pica play be worth? And remember, for March Resources, this is strictly a one-trick pony.
1.5 TCF times say, $1.50 in the ground, comes up with a number of zeros, divided by 100 million shares outstanding for March Resources, gives you some of the potential.
Meanwhile, the markets are improving a bit, but will people care about these plays? Antony says that the problem of investor relations is something that has to be taken care of and it will be done.
Meanwhile, back to Bridge Resources. It has a very interesting management team. Ed Davies is based out of Denver and has decades of experience in the North Sea with Conoco. Tom Stewart is an American, also out of Denver and also with international oil experience. Once again, this can get lost in the IR world, that a technically-Canadian company with financing and listings on a Canadian Exchange, based out of Denver with assets in the North Sea and a base in Aberdeen, Scotland! Gets a little confusing!
Kind of like March Resources, a Canadian company that’s finally got an American rig, drilling in Chile...yes, one could see how IR could be important in these plays.
As a last point we notice that Dave Antony has been a pretty good stock picker. Last time we had an interview with him, he did make a stock selection for us—Solana Resources and it’s done amazingly well. So the old question goes...okay, what have you done for us lately?
As far as picking stock picks right now, there are a couple of juniors that he’s looking at, but need financings, so for this issue he picks Oilexco, and says simply, “after what they’ve gone through like many others in the last while, the price is right!”
LATIN AMERICAN MINERALS (V-LAT) $1.00 n/c
Fresh from Joe Martin’s Cambridge House Mining show in Vancouver, where almost 12,000 delegates and exhibitors crowded the place, we asked one of the headline speakers and mining man Eric Coffin, if he could only buy one stock from the conference, what would it be?
Needless to say, no one likes coming up with only one name, particularly in a high risk environment, come up with a portfolio approach, but Eric was still obliging.
While Eric is still concerned about one more step down in the markets, Latin American Minerals is his pick and he says he really likes it for the potential size of their Paso Yobai project in Paraguay. He does warn people about the potential for both the negative and positive effects to it, and he points out that while zinc is definitely not in favor these days as are most base metals, Latin American’s first project was supposed to be their Tendal zinc project in Argentina, which many think should have a good chance of success. They start drilling in a few weeks.
For a comment and a sample from the Hard Rock Analyst which the Coffin Brothers put out on a timely basis, give Debbie an e-mail at debbie_lewis@canaccord.com and we’ll make sure you get their comments on Latin American, plus a sample of what subscribers usually see.
To receive the Late Edition and be on our daily circulation simply e-mail Debbie at Debbie_lewis@canaccord.com and give your address, phone number and e-mail and we’ll have you on the list tonight. |
