₪ David Pescod's Late Edition March 14, 2008
CONNACHER OIL AND GAS (T-CLL) $3.36 -0.04
PETROLIFERA PETROLUEM (T-PDP) $10.92 n/c
It looks like they are changing some of the laws regarding
how oil and gas companies can report the size of the projects
that they are working on. It’s always a bit of an educated
guessing game when you are talking about potential size of
new discoveries or what it is you are actually chasing with
the drill bit and we don’t doubt in the past, this idea has been
abused.
In the meantime, it looks like regulators may be changing
just how a company can discuss what it is they think they
have, hope they have, or dream of having. Smells like more
jobs for lawyers, but in the meantime, you may be faced with
the prospect of the guy who runs your local oil and gas company
telling you, “Well, I think it’s really big, or it’s not so big,
or kinda big” as the target of the day. That somehow just
doesn’t explain what it is they are chasing, does it?
Knowing that those laws are changing, there are going to
be a couple of shareholder meetings coming up in May that
are going to become quite important. If you’ve got the time,
either visit Connacher’s annual general meeting on May 13th,
or Petrolifera’s, which is also in May (we will be on the road at
that time...otherwise).
Connacher owns about 30% of Petrolifera and Petrolifera,
a stock that has had a real roller coaster ride over the last
few months, will be participating in two high risk/high reward
plays shortly—one in Columbia and one that is kind of really,
really big in Peru (you guessed it, that’s the new technical
term).
Someone might want to go to these meetings to ask the
same question of just how big they think those targets might
be. We suggest they are both significant. (Like, really, really
big!
THE BEAR STEARNS COS: (US:BSC) $30.50 -26.50
The folks on Wall Street that generated the asset-backed
mess, have created big problems around the world, from
villages in northern Norway that have had to declare bankruptcy
to the Yukon Government in Canada, which has had
its finances now facing a problem to individuals everywhere
wondering what the stuff they own is worth. And of course
whatever they say on Wall Street, one now should doubt
greatly.
Going into the last quarter, Merrill Lynch was first saying
that they were facing a $2 billion loss, then it became $4
billion and by the time they got to the actual end of the quarter,
it became an $18.5 billion kiss.
Bear Stearns, one of the bigger American brokers after denying for days that their capital was at risk, today Bloomberg
writes, “Bear Stearns said today that its cash position had significantly deteriorated”. The New York Fed and JP Morgan
came to the brokerage houses’ rescue, but it’s future is now very much in doubt. One should ask, which brokerage
houses on Wall Street one should believe at all, given the history of the last six to twelve months.
While the markets has been brutal and some of our favorite junior oils and mines have lost up to 50% at one time or
another, that looks like outperforming compared to the stock of Bear Stearns.
BRIDGE RESOURCES (V-BUK) $1.36 -0.08
HERITAGE OILCORP. (T-HOC) $52.61 -0.23
GROUNDSTAR RES. (V-GSA) $1.40 -0.08
Yesterday, we did our take on some our favorite high
risk/high reward plays for the coming year, hoping that one
or so might actually hit and make a difference in a portfolio
given the current state of the markets.
In that article we had a bit of a slip. The target for Bridge
Resources on their North Piper project is 400-500 mmbbl, not
the smaller number we had used.
We had several favorites on this list, but for those looking
for a longer list of high risk/high profile plays, Malcolm
Shaw of Wellington West still has the authoritative report
as he lists nine of them and Shaw is without fear...his are
definitely high risk/high reward plays.
Not on our list was Heritage Oil which Fred Kozak of Canaccord
also likes and Shaw has a target of $150.00 as potential
down the road. Groundstar Resources has two blocks
in Egypt that he suggests might have multi-billion barrel
gross potential. And then of course there’s WesternZagros
Resources, which has some absolutely enormous targets...
which is the good news. The bad news is that they
happen to be a long distance away from pipelines and it’s
in a place you might have heard of...Iraq!
Shaw and Wellington West also host a conference that
features all the high risk/high reward plays and as Kerry
Sully of CGX Energy tells us, it was quite a show the last
time as most of them had never seen each other and were
scurrying around looking at everybody else’s data and getting
more than a little excited by some of the stories.
Shaw and Wellington West have been generous, so if
anyone wants a look at that brief report and hasn’t yet seen
it, just e-mail Debbie at debbie_lewis@canaccord.com.
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. |
