Bobby
Accumilated good position in Upton Resources early 1995 in price
range of $1.35 to $1.45. Reason I bought into the company was
very low cash flow to share price ratio and excellent acreage
position. Also, they were basically into oil, rather than gas. Reserve
life at time of investment was only 4 years and company recognized
they had to take moves directed at increasing reserves and also life
of reserves. They budgeted an aggressive drilling program for 1995
which a large portion was designated for exploration. Up until then,
they were basically a developement and exploation operation.
Another attraction to me were the number of shares outstanding.
Sold out entire position in $3.15 to 3.40 range in 4th quarter 1995.
Decided to take profits, no other reason. I have not seen their
annual report yet and have't seen 1996 budget. However, I'm sure
it will be another agressive year with follow up drilling on properties
where last year's exploration proved successful. Cash flow will be
substantially higher this year and an increase in land holdings should
result. They paid an awful high amount for a small property in the
later part of 1995 which they plan to explore with Maxx Petroleum,
another company I like a lot. I would of bought into this company
before Upton, but the amount of shares outstanding turned me off.
The company operations are led by talented management. Upton
has good management also. They are in transistion phase from
developement to exploration.
Key to investment in this company is timing. Company will definitely
be in growth mode. Put emphasis on cash flow ratio. Also, Upton
in the past has forecasted cash flow conservatively.
Upton Resources still is one of my favorites. My top favorite is
Newport Petroleum. They have excellent land position and are very
agressive in drilling with great results.
If your looking for smaller companies with great potential, you might
want to check out Venator Petroleum, Vermilion Resources, Truax
Resources, Lexxor Energy, Genesis Exploration and Lateral Vector.
Turnaround situations include Deep Basin Energy and Harbor
Petroleum. My "Major Company" favorite is Talisman Energy, a
company with super land holdings in North Sea, Indonesia and
Canada. I believe they are in early stage of earnings super growth
over next few years.
I don't follow Lynx but have some knowledge. Company I believe
is in supplies and service category. I believe they are a spinoff from
a major oil operatrion, maybe sometime in 1994.
I follow approximately 150 oil and gas exploration companies and
maintain an active file. If I can be of help, don't hesitate to contact
me.
Kerm
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