LOL,BREX-OIL?->"As a result, the OTC Journal is now ramping up its 2002 price target to the $8 to
$10 range."
Subj: Energy Power in the News- Successful Drilling Programs Disclosed
Date: 12/15/01 5:28:24 PM Eastern Standard Time
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[Image]December 15, 2001[Image] [Image]Volume IV, Issue 107[Image]
Email : info@otcjournal.com
URL : otcjournal.com
To OTC Journal Members:
[Image]Upcoming Events[Image]
It has been the policy of the OTC Journal to publish a year end review of each of
its featured companies as the year comes to a close. We generally include a recap
of the year's accomplishments and disappointments, followed by our thoughts on
the future.
Based on our comments, investors may wish to add to promising positions or eject
losers just before year's end when small stocks tend to drift down due to lack of
interest and year end tax selling.
Today we are reviewing Energy Power Systems as it was our best idea in 2001, and
yesterday's news puts this stock squarely in the spotlight for the first half of
2002.
Mid week we will cover Astralis (OTC BB: ASTR), a company which had blockbuster
news earlier this week which went virtually unnoticed by investors if price
action is any indication. Next weekend's edition will focus on Envoy
Communications (NASDAQ: ECGI). Shareholders are reminded Envoy will announce year
end earnings on Tuesday. Call 800-213-1352 at 4:30 Eastern Time on Tuesday for
the post news release conference call. Cross Media (AMEX: XMM) and MedGrup (OTC
BB: CODX) will be covered the following week.
[Image] Energy Power Systems (OTC BB: EYPSF) Year End Recap
[Image] Energy Power Systems was by far our most successful investment idea in
2001. In a year when nearly every major index lost ground including the
oil and gas sector, Energy Power was the one stock you all should have made money
on.
Energy Power enhanced the solid foundation of its 30 year old Engineering and
Offshore division by launching an ambitious expansion program through its Oil and
Gas Exploration division.
Throughout the year the company announced several exciting new drilling and
exploration programs in Western Canada, an area considered by geologists to still
contain North America's best reserves of oil and gas.
At the same time, the Engineering and Offshore division landed several new
contracts, which helped keep momentum in the stock price. We launched our profile
on February 10th, 2001 at $2.95. The stock has since seen a closing high of $5.69
for a solid 93% gain. Friday's closing price had the stock at $4.90, up 66% from
our starting point. This performance is particularly outstanding when one
considers we were mired in a horrendous bear market for most of the year.
When we released our original profile on February 10th our price target was
$5.60. The stock hit that level on November 12th, thereby allowing our members
who followed our advice and accumulated a position in this stock an opportunity
to take a substantial profit.
A quick glance at the chart provided compliments of Yahoo! reveals a solid
uptrend. The stock is currently trading sideways on decreasing volume, parked
solidly above both its 50 and 200 day moving average. The next volume surge could
easily take this stock to a new high.
Moreover, yesterday towards the end of the trading day, Energy Power announced
preliminary results of some of its current drilling programs in Alberta and
Ontario.
The press release is extremely long and difficult to interpret if you are not an
industry expert. Boiled down, the press release tells us the company has
discovered either natural gas or oil at about 80% of the sites it is currently
exploring. The more prolific sites will lead to further drilling in adjacent
areas.
It is too early to make assessment of ongoing production levels and cash flow.
However, yesterday's news was very exciting for shareholders. It demonstrates the
company has been highly successful in launching an ambitious oil and gas
exploration program. Improved corporate performance should follow in the first
two calendar quarters of 2002.
As a result, the OTC Journal is now ramping up its 2002 price target to the $8 to
$10 range. The company only has a $44 million market capitalization at current
levels. If management continues moving the company forward at this rate, a $100
million market cap in 2002 is possible particularly if the exploration program
yields a major find.
For an updated profile on the company, click here for our October 19th edition on
Energy Power.
Here is the complete text of yesterday's news release for your review:
Friday December 14, 1:21 pm Eastern Time
Press Release
SOURCE: Energy Power Systems Limited
Energy Power Reports On Multi-Well Drill Program
TORONTO--(BUSINESS WIRE)--Dec. 14, 2001--Energy Power Systems Limited (OTC BB:
EYPSF & Frankfurt EPW) (www.epsx.com; ``Energy Power'' or the ``Company'')
announces preliminary results of its multi-well drilling program.
In October of 2001 the Company commenced a drilling and exploration program
focused on prospective properties located in proven productive areas of Alberta,
Canada. The multi well program involves partnering and farm-in alliances with
other oil and gas companies to share risk and diversify opportunities. The
program initially targeted 8 exploration prospects which could lead to further
development opportunities. 6 of the 8 wells have hit target depth. Based on the
available information 1 well is drilled and abandoned, 2 wells produced oil, 2
wells produced gas, and 1 well had log indicated oil and gas pay from one
formation and gas in another formation.
Farrow, Alberta: The Company earned a 31.5% interest in a half section of land
(320 acres) by paying 75% of the costs of 4 square miles of 3D seismic data. The
well was drilled out then cased as an oil well and stimulated with a 40 tonne
frac which resulted in a productive response from the Glauconite formation. The
pump jack and battery facilities are in place and the well is currently
production testing and producing oil. Reservoir pressure was measured at 1100
psig and 95 barrels of oil was recovered in 20 hours. Stabilized rates and
reserve size are yet to be determined although a neighbouring well, producing
from the same Glauconite formation, has reported 55,000 barrels of oil
production in the past six years. Further development drilling could allow up to
an additional 7 wells on this half section of land.
Brazeau River Prospect, Alberta: The Company participated in developing and
exploring 2 sections of land (1280 gross acres) and has a 50% interest before
pay out and 25% interest after pay out in the test well and earned a 25%
interest in the earned section. The test well was drilled and completed as a
Rock Creek oil well and production tested at stabilized rates of 20 bbl/d oil
and 100,000 cubic feet/day gas. The well is currently shut in pending evaluation
of a single well battery.
Olds-Innisfail Prospect, Alberta: The Olds-Innisfail prospect encompasses 6
sections of land (3840 gross acres). The initial exploration consisted of 3
prospective drilling locations of 2 sections (1280 gross acres) each- a test
well and an earned section. The Company has a 25% before pay out and 12.5% after
pay out in each of the test wells and earns a 12.5% interest in an additional
section (640 acres) by drilling each test well. To date the Company has
participated in the drilling of 3 test wells and earned a 12.5% working interest
in 3 additional sections. One test well is a suspended Basal Quartz gas well
pending completion. One test well is a shut in Viking Gas well that flow tested
at a stabilized rate of 500,000 cubic feet/day and one test well was dry and
abandoned.
Caroline Property, Alberta: The Company is participating in developing 1 section
of land (640 gross acres) and has a 22.5% interest before payout and a 16.875%
interest after payout. The well was drilled to a depth of approximately 2,800
meters and is being cased as a Glauconite gas well and an Elkton oil and gas
well. It is anticipated that this well will be completed and on line early in
the new-year.
Prince Edward Island Property: The Company has acquired a 25% interest in a
property consisting of 6 exploration permits (525,000 gross acres) perspective
for both conventional and coalbed methane gas. The property is located within
central Prince Edward Island, Canada and is underlain by Carboniferous and
Permian sedimentary strata of the Maritimes Basin. An exploration program
focusing on geophysics has been ongoing with seismic sections and maps being
scanned and converted to digital format. Approximately 450 kilometers (280
miles) of seismic lines have been processed to date. Consulting geologist and
geophysicist are recommending the acquisition and or production of further
seismic data, among other sciences, to help in determining an anticipated multi
well drilling and primarily gas exploration program in 2002.
The 2 remaining locations of the initial 8 prospects in the multi-well drill
program are: a 30% interest in 1 section (640 gross acres) prospective for Belly
River gas in the area known as Cherhill, Alberta and a 10% interest in 3
sections (1920 acres) in a 3,200 meter Nisku test in an area known as Edson,
Alberta. The Edson prospect has recently been spudded and it is anticipated that
the Cherhill prospect will spud in later this month with results of both wells
expected in January 2002.
The Company is also acquiring additional acreage in Alberta for further drilling
prospects in 2002.
Energy Power also announces that holders of 400,000 Series II Preferred Shares
in the capital of the Company have recently exercised their conversion rights
and acquired 320,000 common shares and 320,000 common share purchase warrants.
The holders subsequently exercised the common share purchase warrants at $1.50
each for proceeds to the Company of CDN $480,000. Energy Power plans to apply
the proceeds of the exercised warrants in part to fund its ongoing oil and gas
exploration program and for general working capital purposes.
About Energy Power Systems Limited
Energy Power is an integrated energy source and service company operating as an
Engineering and Offshore Division and an Oil & Gas Division.
The Engineering and Offshore Division is currently working on a backlog of
contracts which should carry over to the next fiscal year and beyond. Further
development of Atlantic Canada's offshore infrastructure could feed additional
growth for the Engineering and Offshore Division. In addition the Oil and Gas
Division is adding positive cash flow to fund corporate operations and future
development and growth strategies. At present the Company is expanding its
exploration, drilling and development program to increase oil & gas reserves and
production.
There are approximately 8.8 million shares issued and outstanding in the capital
of the Company.
Certain of the statements contained in this news release are forward-looking
statements. While these statements reflect the Corporation's current beliefs,
they are subject to uncertainties and risks that could cause actual results to
differ materially. These factors include, but are not limited to, the demand for
the Corporation's products and services, economic and competitive conditions,
access to debt or equity capital on favorable terms, and other risks detailed in
the Corporation's Form 20-F and Annual Report.
--------------------------------------------------------------------------------
Contact:
Energy Power Systems Limited
Sandra J. Hall, 416/861-1484
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