₪ David Pescod's Late Edition 7/14-7/15/08
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David Pescod's Late Edition July 14, 2008
DUVERNAY OIL CORP. (T-DDV) $82.00 +23.56
BIRCHCLIFF ENERGY (T-BIR) $15.19 +1.59
Today a very well-respected team of people at Duvernay Oil get their reward as the Company is bought out in an almost $6 billion deal as Shell has decided they want to own whatever it is, Duvernay’s got. A big chunk of what Duvernay’s has of course is in the Montney area of northeastern B.C.
This raises more than a few questions—the obvious one of which is why is Shell deciding to go into northeastern B.C. and shale gas and what’s in the area instead of potentially the billions they might have put into heavy oil?
The second question of course is who else suddenly owns land in this area that overnight has become quite hot?
One company that we have written about several times has been Birchcliff Energy for a very simple reason. Whenever a billionaire tends to put big chunks of dough into a play, one should at least, pay attention. Several times we had written how Seymour Schulich who has written a very interesting book called “Get Smarter” that we featured on January 10, 2008, has been buying ever-more shares of Birchcliff over the past year.
We’ve mentioned that several times, so how many shares of Birchcliff do we own? Well, obviously we should have paid attention to ourselves because Birchcliff has been one of the big winners over the last year and with today’s news, I suspect it’s going to attract even more attention.
Meanwhile, Canaccord a while ago, put out a report called “The Full Montney” on who the players are in this area of B.C. and some of the picks at the time had been Duvernay Oil, ARC Energy Trust, Birchcliff Energy, EnCana Corporation and Storm Exploration. It was an interesting report and obviously, mighty timely.
REECE ENERGY (V-RXR) $3.50 -0.20
There are a couple of areas in Canada that are hot, despite the fact one wonders if they shouldn’t be hotter. Remember six months ago when gold went through $1000 an ounce and only a handful of the big guys attracted the markets attention? It’s the same these days it seems as oil hits ever higher prices, and yet because of the state of a market that seems to be in full recession, no one cares or at least doesn’t care the way they should.
Reece Energy is one of those players involved in one of the hot areas of the country right now and that’s the Bakken in Saskatchewan... also creating excitement and notice the first piece on the shale area of northeastern B.C. and of course the potential for shale gas in Quebec that we will know a lot more about later this summer.
Reece Energy today did a corporate update and they are one of the little juniors that is involved with land holdings in the Bakken. The numbers they put out today shows they’ve drilled 12 wells in the last quarter to own 10.3 wells net and they’ve seen production rise nicely to 1300 b/d, becoming in no time, a nice little oil and gas company. That’s a 47% increase in their production and they’ve also had a nice boost in their capital budget for 2008.
Meanwhile in today’s news they do have a tidbit that is a little discouraging in that in a potentially significant play where data is ongoing and news important, they said, “Reece has decided not to release any further drilling, testing or production information concerning these exploratory wells until the end of the third quarter due to competitive land issues in the area. Once all three wells have been drilled and tested, Reece will evaluate them and determine how to best exploit the significant asset base in the area. A further seven (3.5 net) wells are scheduled to be drilled before the end of the year.
Obviously, there is stuff going on behind the scenes and so far their Bakken play hasn’t been the major part of their story...but I suspect down the road, it will become so.
INDYMAC BANCORP. (US:IMB) $0.15 Halted
In his most recent issue, Don Coxe wrote that “the
banking crisis is, at best, in the forth inning of a game in
which the home team is already down by 40 runs, the
beer has run out and the exit doors are sealed shut.”
That kind of tells you his thoughts on where we are
sitting in the banking crisis in the United States and on
Friday of last week, it was big news that IndyMac Bank,
one of the bigger players in the mortgage business in the
United States that helped fuel the housing boom “has
been seized by U.S. Federal Regulators” in one of the
largest bank failures in American history.
I guess it shows that Coxe might be right and that
there might be a lot more bad news to come in the banking
sector yet. And of course that's not good for concerns
about recessions, bear markets and the like.
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David Pescod's Late Edition July 15, 2008
Due to David Pescod traveling, there will be no Late Edition for the rest of the week.
Hope to be back on Monday, July 21st.
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