₪ David Pescod's Late Edition May 20, 2008
COASTAL ENERGY (V-CEN) $4.85 +0.05
PAN ORIENT ENERGY (V-POE) $12.91 +0.64
We’ve mentioned Coastal Energy a couple of times over the last few months for the simple reason that Pan Orient had such huge success last year in Thailand, maybe Coastal could echo the same success in the coming months. Up to date, Coastal has had more than its share of success already.
We corner CEO Randy Bartley and CFO William Phelps last Friday and the first question is, how does an America-based Company exploring in Thailand, get listed in on a Canadian exchange? The duo responds quite simply that in the United States it’s mainly domestic stories that seem to attract the attention on their own market and they find many of their investors are European or Canadian. While they are also listed in Europe, much of their liquidity and their following seems to be on the Canadian exchange.
While we are used to nothing ever seeming to happen on time in the oil or gas business these days as everyone is so busy, they suggest that it looks like their rig will probably pull out of Singapore by June 7th, meaning it should be on site and operational by the end of June.
What we’ve liked about this whole story is their Oilexco-like move in tying up their offshore drilling equipment for the entirety of the next year, plus an option on the next year. None of this stuff like the North Sea where it seems you have to wait six months for the next drill results and then another eight months and sooner or later, you just get bored with the story. And we have high hopes for this story.
The Texans tells us that they expect to have a new update on their drill sequence on their website sometime later this week. It is going to be a very active next year with plans to drill somewhere between 16 and 20 wells, much of them this year to be mainly development wells with only one or two exploration wells.
What Bartley and Phelps like about work in Thailand so far is that it seems everywhere they found a trap, they found oil filling it. But while many analysts have targets for the Company of as little as $7.00 to as much as $10.00, they still have potential for the barn-burner that could change a person’s lifestyle.
That was our phrase, but when we ask Bartley and Phelps for when they will be drilling something that actually could change a shareholders lifestyle, they say, one of those types of plays will probably be drilled in November. (Could be a nice Christmas present?)
As far as work in Thailand, they suggest that it is a very oil and gas-friendly regime so far with a basic tax royalty which was recently raised (you don’t hear of anyone ever lowering it these days, do you?) and of their many projects (and they do have a boat-load folks) on the southern regime that they are emphasizing work on, they point to ongoing pleasant surprises on their G5/43 where they have found eight additional intervals. That’s the kind of stuff that gets people ever-hopeful.
As far as the price of oil which has been just rocketing lately, both of them suggested they would never have predicted oil at these levels. They suggest anyone at OPEC is probably pumping all they can and selling every barrel they could and by Christmas would be quite pleased just to see oil anywhere near current prices.
As far as what next for the company, while they have been and hope to continue to be very successful in Thailand, they suggest that it’s never good to put all your eggs in one basket, so they are looking for opportunities in other areas of the world.
When we get around to our favorite question, what oil and gas stock would you buy other than your own with no conflicts of interest, they mention the very successful Pan Orient as a story that’s probably got more traveling left in it.
Josef Schachter sends us an interview with T. Boone Pickens from last weeks Milken Global Conference in L.A. and suggests that the interview is more than little long, but definitely worth a person’s time.
It looks back at some of the big events in Pickens’ life, some of the big deals he was involved with over the years through different booms and busts in the oil and gas patch and what it is he is expecting to see next.
Once again, this is rather long, but there is lots of humor and lots of information. Go to:
paul.kedrosky.com (under search: type: t boone pickens)
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