₪ David Pescod's Late Edition February 20, 2008
COASTAL ENERGY (V-CEN) $4.40 -0.10
STERLING RESOURCES (V-SLG) $2.65 -0.04
Fred Kozak of Canaccord has been having a great time over the past two years with his favorite pick of Oilexco and also on his top picks list are two companies—Coastal Energy and Sterling Resources. He makes comments on those two companies today so why don’t we reprint his thoughts?
“Coastal Energy, Speculative Buy, C$6.00 target price. Our target price for Coastal Energy is based on the company’s net asset value, using the Proven plus Probable reserves as determined by the company’s reserves engineers.”
We should point out that Coastal Energy is also one of the favorites of high-profile, BNN commentator and money manager with Sprott, Peter Hodson. We would prefer his stock price though, as he is leaning more towards an $8.00 to $10.00 target and a lot of people are aware of the fact that Pan Orient operates in that area of the world in Thailand and was one of the big success stories in the oil and gas market last year.
“Sterling Resources, (Speculative Buy, $C5.15 target price) released an independent resource assessment of Breagh and the Doina complex. This is the first time that a third-party assessment has been completed on any of Sterling's assets. For the Western Breagh Structure the Best Estimate (P50) gas in place is 330 Bcf. For the undrilled Eastern Breagh structure area, the Best Estimate is 467 Bcf of unrisked, undiscovered gas in-place. In the offshore Romanian Black Sea, a Best Estimate gas in place of 173 Bcf is assigned to Doina Sister, which was discovered and tested by the recent well. The previously drilled Doina discovery has gas in place of 103 Bcf for the P50 case.
Our target price is based on the estimate of contingent asset value.”
We should also point out here that Sterling has consistently been one of the top three picks from time to time for Josef Schachter, the high-profile man with Maison Placements and frequently can be seen on BNN.
Once again, that target of $5.15 would be tasty and we suspect Schachter’s would be even better.
BRIDGE RESOURCES (V-BUK) $1.34 +0.10
One of the more intriguing plays just developing in the North Sea over the next year or years is that of Bridge Resources. For those who have been following some of the more intriguing stories in the North Sea such as Oilexco (OIL), Ithaca Energy (IAE), Antrim Energy (AEN) or the like, this could be a story that should be on the top of your list.
There is one analyst report out that is probably must reading both for Bridge Resources and for that matter, the entire North Sea as the 40-page report gives you information in abundance.
Martin Pelletier is the author for Blackmont Capital and he writes, “Bridge’s primary focus at this time is to establish a reserve, production, and cash flow base from its first development project at its 100%-interest Durango play in the Southern North Sea. A US$30 million horizontal well is scheduled to be spudded by the end of February, with first production targeted by the end of the year at anticipated rates of 30 mmcf/d of natural gas and 1,000 bbls/d of condensate. Should this prove successful, Bridge plans to use Durango as the springboard to prove up the extensive resource potential of its remaining prospects on 20 blocks.”
Pelletier is a little more sedate in talking about the Piper prospect than some analysts, as some folks just get carried away with the potential of Piper’s 400-500 million barrel potential, but this is must-reading. He points out that Bridge over the next few years expects to be drilling three significant wells a year and once again, this is must reading.
If you would like a look-see at Blackmont and Pelletier’s work, just e-mail Debbie at debbie_lewis@canaccord.com.
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