₪ David Pescod's Late Edition April 28, 2008
ITHACA ENERGY (V-IAE) $2.10 -0.15
OILEXCO INC. (T-OIL) $15.08 +0.03
ANTRIM ENERGY (T-AEN) $3.97 -0.13
Last week on April 23rd, Ithaca Energy provided an operational update regarding its Athena and Jacky prospects and it wasn’t good. The latest appraisal well at Athena as Canaccord’s Fred Kozak writes, “has not confirmed an extension of the field’s oil accumulation.” In other words, a dry hole.
Kozak still has a target of $4.50 on Ithaca. He writes, “based on a sum-of-the-parts valuation for Ithaca” and he gives an estimate of the Company of a $C3.70 basic share price. He also points out that the Company “will have updated reserves and values in the next several weeks” which is something to look forward to...maybe.
Meanwhile, is it just me or is the North Sea losing an awful lot of its luster. Take a look at the chart on Ithaca and it shows you that anyone who has been in it for the history of its existence, has probably lost money on it. Over the last while on Antrim Energy, there is a good chance you’ve lost a swack of money.
Little Gulf Shores and International Frontier Resources both going zero for four in the North Sea has shown you that when people say some of these wells are a one in ten chance of success, they are not kidding. Everything in the North Sea seems to take longer than expected, be more expensive than assumed and take two or three times as long to get built and on-stream as you would think justifiable.
Maybe you only need one stock if you are going to play the North Sea and that’s the guy who has all the equipment they need to do exactly what they want, when they want and that’s Oilexco, already looking at huge production increase near year-end, but also with a large supply of targets that should they hit, will give you ample reward.
Maybe even over time, Oilexco will take advantage of some of the beaten down share prices on these stories and put some of these sad sacks out of their misery?
Having said that of course, we look at the target size for Sterling’s plays coming up over the course of the year (unfortunately much later in the year than expected) and the potential size of Bridge Resources Piper play and we admit that yes there still is a little greed left.
For a background look at Ithaca and Fred Kozak’s report, e-mail Debbie at debbie_lewis@canaccord.com.
SYNENCO ENERGY (T-SYN) $8.97 +1.18
SOUTHN. PAC. RES. (V-STP) $0.92 +0.17
UTS ENERGY (T-UTS) $5.40 +0.18
CONNACHER OIL (T-CLL) $4.12 +0.12
OILSANDS QUEST (US:BQI) $4.82 +0.10
The good news today is that French oil company Total SA has decided to expand its presence in the Canadian oilsands, according to one news release with a $478 million bid for Synenco Energy. Which is the good news for Synenco shareholders. The bad news is relatively evident on a two-year stock chart as the Company is trading for a small fraction of what it used to.
A higher Canadian dollar, costs on the oilsands going through the roof, have hit many of the junior oilsands players. The Northern Lights projects now which had an original target of production of 2011 according to the one analyst, now suggests start up is probably closer 2014.
The takeover does give a small bump to several stocks in the same field.
GLOBESTAR MINING (V-GMI) $1.85 +0.02
Copper prices remain buoyant, but many mining stocks over the last few months have had anything but buoyancy as Globestar Mining and its Cerro De Maimon project in the Dominican nears production.
Analyst Wendell Zerb of Canaccord has decided to do something we haven’t seen a lot of lately...up his target to $3.00.
He writes, “Initial annualized payable Cu production is expected to be about 31 million lbs at C1 cash costs of about US$0.43/lb Cu….”
For a detailed look at the project, simply email Debbie at debbie_lewis@canaccord.com.
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