₪ David Pescod's Late Edition May 21, 2008
BANKERS PETROLEUM (T-BNK) $2.00 -0.02
CONNACHER OIL & GAS (T-CLL) $4.99 +0.03
OILEXCO INC. (T-OIL) $16.29 +0.30
While we are off to Thailand and southeast Asia for a
couple of weeks for R and R...still recovering from a correction
in the market the likes of which we haven’t seen in
a while...and then going right into an oil and gas market,
because of oil and gas prices we would of thought impossible
just a few months ago.
We are long and strong the oil sector and even using
margin, we are aggressive. Oilexco, remains a key holding
for ramps up in cash flow, and production at year end.
Connacher is also a key holding, and we expect another
bounce on the day they finally get EUB approval for their
second pod.
Bankers Petroleum, and Abby Badwi have done extremely
well, and when they split the company up we hope
for yet another bump.
Corridor Resources cash flow with these gas prices is
going the right way, and if when they attempt their first
horizontal shale gas well this fall, another potential big
upside might be added.
The basin in Thailand has been awfully generous to the
few explorers in the area, over the last while, and still is
much unknown by the investing public.
But Coastal Energy, ramping up their exploration starting
the end of June, we have expectations for them. Those
are some of our core holdings, and we have expectations.
For the speculative side of the portfolio you can`t ignore
both the upside and down side of the Quebec shale
play. We are going with Junex and Gastem. The benefits of
this play is that the shale play is probably shallower and
possibly much more economic than the Barnett shale if it
works, and it is much closer than Texas to the high price
markets in Boston and New York. Once again if it works.
Everyone is talking Bakken out west, and maybe just
maybe Ryland Oil has a huge bunch of it. Too many
shares out, no real production yet, and a very generous
market cap, but is this the Oilexco of the Bakken?
BNP Resources is being played for the Jensen. This pool
on the Alberta side of the Montana border, which has seen
some very significant pools producing for 40 and 50 years
will shortly get six wells to test if the Jensen is there, and
they are either there...or they are not.
Can Ray Smith and his team do with Madalena Ventures
what he has accomplished with Corsair and Meridian.
They are in Argentina and Tunisia. He did extremely well
with the past two. Can he repeat it? Looks like Argentina
with its vast basins is becoming a very attractive place for
many Canadian operations, one likes the size potential,
although the politics is definitely scary.
Looks like cheapie Argenta, has found some interesting
stuff in Argentina, although it has cost them dearly finding
it. Yes, we are averaging down.
What could go wrong! We are so over due for a correction
in oil prices, one is going to happen sooner or later,
witness a correction in rice, a commodity that just a few
weeks ago everyone was terrified of an impending shortage,
and wheat that a few months ago was going through
the roof ,and is now down almost 40 per cent.
Our own plan though is to hold our core holdings until
year end and the specs, like always are on a day to day
basis.
Meanwhile, in the beaten up mining sector, we expect
the latter part of this year might finally be get some respect,
particularly with uranium looking like its putting in a
bottom, and zinc doing a little better because of problems
in China. We look at Globestar Mining, and with production
starting and cash flow eminent, why can`t it perform like a
Capstone over the last while. We would not be surprised
if Globestar is merged into something bigger, or bought
out.
S&P/TSV VENTURE COMPOSITE INDEX:
While markets around the world have had an ugly time
of late, the TSX Venture Index, where most of the junior
mines hang out has been amongst the hardest hit sectors
we can find anywhere. Have things finally changed, as
suddenly we note the uranium stocks are bouncing back
and even some of the near-dead zinc stocks look like they
may yet come back to life.
The Coffin Brothers of the Hard Rock Analyst have
called a few things right over the last year including GXS
and in the May 16th edition of the HRA Dispatch, write,
“Since sticking our neck out and calling a bottom just
over a week ago, we’ve been watching for the Venture
Index to break 2600, which it did today in convincing fashion.
We were pleased with the 2611 close accompanied by
strong trading volume and good market breadth.
We’re not relaxing yet, but it does appear our market
bottom call was right. If the index can manage to clear its
200 day moving average, currently at 2718 and falling, we
think that could signal a significant up leg. Obviously,
we’re hoping that will carry the market through the summer
doldrums into the fall when such long rallies usually
begin.”
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