₪ David Pescod's Late Edition March 20, 2008
MARCH RESOURCES (V-MCF) $0.90 -0.17
March Resources is looking for natural gas in energy hungry
Chile where the economy is booming, but what they
are short of, big time, is energy. They are short water for
their hydro-electric power plants and they are short natural
gas because of problems with Bolivia and Argentina that
deliver it. You find gas here and you’ve got a government
that would welcome you.
They have been drilling on their Pica fields for several
weeks now and they have encountered trouble with the drilling.
Dave Antony suggests that in the last few days, they
have been making as little as a meter an hour and as much
lately as 4 1/2 metres an hour. He suspects they will be at
target depth sometime this weekend, meaning early next
week, there will be some results announced and this stock
could be a lot higher...or a lot lower.
It’s a sizeable field, 12k by 4k, so if the gas is there, it
could be significant. The downside is that because natural
gas pipeline facilities are up to 300k away, they have to
come up with something sizeable to justify it.
Antony tells us that the interest is there, as he is fielding
as many as 200 calls a day and early next week we would
expect results as they are scheduled to hit total depth this
weekend. We expect to do a Q&A with Antony at that time.
GOLD $910.70 -34.60
CRUDE OIL $101.84 -0.70
NATURAL GAS $9.15 +0.043
The headlines in the Financial Post now are all about the
same. How the commodity bubble has burst and gold has
taken its biggest licking in history, silver is down, everything
from zinc to nickel is getting clobbered and even the much
talked about grains in the last while are getting beaten up.
(Gas is one of the few commodities up today as 85 BCF was
withdrawn from storage last week—more than expected and
that means storage is currently 215 BCF less than last year
and gas is one of the few commodities up on the day courtesy
of the cold winter most in North American experienced)
Meanwhile, we should point out that many of the people in
the press and elsewhere are pointing out that the commodity
boom is over, never predicted the boom in the first place as
we go back to those who did predict such as Don Coxe. If
you listen to his conference call today, he suggests that down
the road, you are going to be better off with real stuff and
there is going to come another opportunity.
Another person that predicted the boom in China and
big demand for commodities was Jim Rogers who is livid
about some of the actions of the Feds suggesting that it’s
almost socialism for millionaires and billionaires the way
banks and brokers are being bailed out.
He is still aggressive in the commodities-sphere and is
suggesting that the commodity boom is only half way
through.
Meanwhile, one of our favorite analysts ever has been
Jeff Rubin who is currently Chief Economist and Chief
Strategist with CIBC World Markets. We started following
him almost two decades ago when he made an absolutely
outrageous claim—predicting that Toronto real estate
would drop 20%. Needless to say, that’s not the kind of
stuff that makes a person friends and he received all sorts
of threats. And he was right!
He is one of those that had expected this commodity
boom and he’s not backing away from it at all and energy
remains one of his favorite sectors. He has currently produced
a portfolio of slides called “Gimme Shelter” that for
anyone who has hopes for energy, should take a look at.
While he does look at the U.S. housing downturn, the
rising negative equity in many houses and rising delinquencies,
the slides slow he is a believer that the developing
world will drive the global economy and with it, commodity
prices.
Meanwhile, for those looking for a little more hand holding,
Nick Majendie of Canaccord fame who runs some of
our funds and used to be the boss man at Majendie Securities,
is now suggesting the markets are a great place to be
and expecting very good performance over the coming
year...except for financials.
I suspect if you listened in to Don Coxe’s weekly call
today, you are not going to be looking to buy any American
bank stocks anytime soon anyway. We are also frankly
counting on Jeff Rubin being right with his bullish stance
on oil and in particular, natural gas.
Who would have thought six months ago that oil would
be terrible at $101.00 or gold having a frightful time at $920
an ounce? Truly very interesting times and the question
remains, where will we be six and 12 months from now?
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