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Pastimes : Crazy Fools LightHouse -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (1236)	7/11/2006 10:36:34 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition July 7, 2006 ANTRIM ENERGY (T-AEN) $2.35 +0.07 The next week to ten days is going to be more than a little interesting for shareholders of Antrim Energy as by then, one should know whether their Causeway project in England’s North Sea is a hit...or not. Either way, Antrim has had an interesting past six months as they’ve come up with some very successful results drilling on their 12-well program in Tierra del Fuego, Argentina. Just like Petrolifera (PDP), Argentina has suddenly become one of the places that has been very rewarding. Of the wells drilled, three tested 15—20 mcf a day; another three tested 1-3 mcf a day plus condensate and natural gas liquids. (Their interest in the play is 25.78%) Only one well was dry. Needless to say, these are some huge numbers, but if one is considering Antrim, one should realize that the price one gets for natural gas around the world are locally set and prices in Argentina are much lower than you would think. Antrim now has fully-diluted almost 84 million shares outstanding, so their success or lack thereof at Causeway might not give it the oomph that one might have hoped for before. Of the three firms covering Antrim, Research Capital has a target price of $3.08; Octagon has just moved their target down from $6.00 to $4.00 and Tristone Capital has a target of $2.75. If you are looking for more information on the company, they have a relatively new presentation on their website that could bring you up to snuff quickly. UTS ENERGY (T-UTS) $5.34 -0.11 WESTERN OIL SANDS (V-WTO) $26.90 -0.40 If you’ve picked up any financial paper over the last two days, you’ve noticed what the major story is...the huge and increasingly perplexing cost overruns involved in building some of the billion dollar heavy oil plants near Fort McMurray. Yesterday, Western Oil Sands (WTO) announced that the cost of their 100 MBbl/d expansion at the Athabasca Oil Sands project may be 50% higher than just last years estimates. Not only that, but it looks like that the project could take an extra year to get built as well. Needless to say, this has big implications should these oil projects go ahead and get built at these much higher costs and oil prices suddenly decide to dive. The good folks at Genuity Capital Markets just two days ago suggested that because of capital cost assumptions, they were concerned about the potential and because of all this bad news, they’ve made some changes in who they like and why. They are now kind of fond of some of the companies that have finished building some of their projects and aren’t facing the high costs and asking questions about those that have yet to be built. For these reasons, they’ve raised the rating on Canadian oil Sands because of its recently completed expansion and its potential benefit from strong oil prices. They maintain their buy on OPTI. But at the same time, Western Oil Sands is now a hold and lowering UTS Energy to a hold as well. They write; “UTS provides a greater risk, as it will need to spend in a high cost environment without current production.” NATURAL GAS: $5.52 -0.141 We probably shouldn’t dwell on this thing between oil and natural gas like we have, it’s just that this is a significant, almost historical event to see the disconnect between prices of natural gas and oil be so divergent. Today, we get inventory numbers out showing another increase in inventory and now in the U.S.A. inventory is 2615 bcf, 591 bcf higher than the five year average. There is lots of gas. The end result is that many of the “oily” stocks are hitting new highs, yet many of the “gassy” stocks are down 50% and some even having a more brutal time. So, what to do about this? It definitely is worth your while to give a little thought to it and one idea that seems to be getting more and more coverage is the idea of taking your profits on the oily stocks while they are so high and picking up the gassy stocks while they are so low. Makes sense, but then remember, a bet on natural gas is almost like a bet on weather, hoping for a hot summer (air conditioning use) and a cold winter (heating use). Natural Gas Prices