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To: ms.smartest.person who wrote (1319)	8/30/2006 4:22:37 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition August 28, 2006 WOLFDEN RESOURCES (T-WLF) $1.80 -0.07 Forget what the Alberta politicians may tell you—we do not have a diversified economy...it’s based on oil and gas and it seems over the years you notice a pattern. You have a couple of really good years, followed by a couple of decades where we pay for it. The boom that’s going on right now though, has to be described as absolutely unprecedented with the $50 to $100 billion in mega-projects scheduled over the coming years. The boom is affecting everybody. You’ve probably heard the stories that are rampant about the need for tradesman and how welders can get up to $75 a hour or if they have their own rig, just double that. Carpenters and other tradesmen it seems are worth their weight in gold, but it is affecting all the jobs in Alberta as boom times have hit. Turn on your radio in Edmonton and it’s not the coffee or donuts you’ll hear about at Tim Horton’s, it’s suddenly them advertising for employees and how they have flexible hours and “wages that are better than you might think”. We know of a national chain that specialized in making sandwiches and we know they are good, but the pay of $9.00 an hour, which would probably look good anywhere else, simply can’t attract the workers. We know this one group that’s trying to expand this chain and is having to recruit people from the Philippines. We’ve heard of gas stations that may simply close because they can’t find employees. And most fast food chains don’t have signs outside advertising their great hamburgers or pizza’s—but simply looking for employees. Some friends stopped at a well-known fast food chain the other day that specializes in speed and ended up waiting 20 minutes in the drive-through. When he went in to see what they delay was, he found that there was only one young person manning the counter and only one in the kitchen. The two teenagers couldn’t keep up with the demand and weren’t too happy to be working there. And of course in Fort McMurray, things are going bananas. There is the one well-known bar where all the highly paid guys go to spend some money and we hear of some waitresses making up to $2000 a week. We hear the tale of some road crews needing some flag people and all of a sudden, a local golf course loses their entire kitchen staff because instead of making $12 or $13 an hour in the kitchen, they can make $25 an hour as flag people. Around Edmonton, the license plates show the influx of workers and trades people from across the country, and for that matter around the world. The other side of this story unfortunately is that you need a place to stay. There are lots of tales of people in Fort McMurray having to stay out in campgrounds. Here in Edmonton where the University of Alberta is getting close to 40,000 students, many of those people who need a place to stay, simply can’t find it. Apartment vacancies at 1.5% - you know what’s left is...well, what’s left? When you travel the suburbs around Edmonton it looks like the construction scenes you see in China. And meanwhile, real estate prices which had been heading gently up over the last two to three years, in the last six months, it has simply gotten silly...it reminds you of the silly season that’s hit many areas of the U.S. recently. This competition for trades people equipment and for that matter capital, means that many projects in other areas of Canada are also going to face inflationary pressures, particularly in Canada’s North, where everything they do is competing with what’s going on in Alberta for trades people, equipment, materials, etc. One of the companies that’s being hurt is Wolfden Resources as their projects in the Arctic face ever higher construction costs and material costs. In the Northern Country, you really get a taste of what could happen if global warming continues. Many of the projects to be built in the Canadian Arctic depend on the winter ice roads to get supplies (particularly fuel) in over the 40 to 50 days the ice road is usually open. Thousands of trucks bring in equipment, much more cheaper than it would be by air. This last winter though, the ice road was only open a fraction of the usual 40 to 50 days and fuel costs in many places have soared. When one is looking these days at potential projects in the Canadian Arctic, one has to work in these additional huge increases in costs for anything in the Canadian North. CANDAX ENERGY (T-CAX) $0.68 -0.19 “SNAKE BIT!!!!” That’s the only word we can describe it. Candax Energy yet again, has trouble with their high profile Chaal-1 well in Tunisia. We’ve followed Candax from time to time because of their high profile management team which includes John Clarke, two years in a row considered Canada’s top oil and gas analyst. Today they announce more problems as “the well was being flowed back after an acid injectivity test on part of the DST-2 zone, a sudden loss of annulus pressure was observed, which on examination was clearly due to the development of a leak between the annulus and the tubing.” This means they need a rig and there is no rig available so Candax and its partners are going to review all options and decide on the best plan for the appraisal of the discovery, according to news put out today. It looks like their partners will get together and decide what to do next, but so far this well has attracted a large crowd and showed that there are lots of things that can go wrong in oil and gas exploration. TG WORLD ENERGY (V-TGE) $1.92 -0.06 Clive Stockdale of Canaccord fame is an oil and gas analyst who plied his trade at Loewen Ondaatje, Pemberton and Dominion and he is one of our favorite folks at finding the high risk/high reward plays that could make a big difference to one’s high risk portfolio. He was the guy who came up with Ultra Petroleum amongst others, remember? TG World Energy was one of his favorite picks back $0.75 and $0.80 and although we never thought it would take this long with all the delays they’ve had in getting their Niger play together, with current high oil prices and enormous successes in the rift basin of Niger, Clifford James and his crew obviously have a significant play, when it should spud in October. Stockdale had always predicted a $2.00 price target when they started work (just missed it the other days) and then of course it depends on results. For those that were in early and patient, it’s better than a double and close to a triple for some. As we say, what next depends on drilling results. We are publishing an interview with President James tomorrow that I think everyone will find interesting! If you would like to receive the Late Edition, just e-mail Debbie at debbie_lewis@canaccord.com