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To: ms.smartest.person who wrote (1431)	9/22/2006 11:03:20 AM
From: ms.smartest.person	Read Replies (2) \| Respond to of 3198

&#8362 David Pescod's Late Edition September 21, 2006 CRUDE OIL $61.65 +0.91 GOLD $584.30 +5.20 It’s not too often that we suggest there is a “must-see” debate on economics or the stock market, but this really is a must-see. Clement Gignac of National Bank Financial argues the bearish case for the market and the economy, and Jeff Rubin of CIBC World Markets, a personal hero of ours argues the bullish case for both oil and certain other commodities. Like we say, it is must-see, mainly because some of the arguments that Jeff Rubin makes on American real estate where some people suggest a disaster is about to happen, or oil where some people now suggest the crash will continue to $40.00. Rubin has made a career of making absolutely outrageous predictions, most of which come true. The most recent was about six months ago when he suggested we would see oil at close $80.00. He missed by about $1.50. His biggest and most outrageous call of course, was many years ago in 1989 when he suggested real estate centered in Toronto would drop 25%. That call got him national coverage and needless to say, there were more than a few real estate agents and the like, calling him names that you only hear in a bar. And of course, he was right! Just go to www.robtv.com. Watch past videos. Wednesday 12:30 PM ET—Market Call with Jim O’Connell. “The Big Picture: Bull vs. Bear. A point to note in this debate that we found particularly interesting was Rubin’s take on what next for American real estate. Once again, the headlines that we’re talking about the huge speculative growth in real estate prices in the States, now keys on how there’s an imminent crash coming. Those who are predicting disaster suggest that’s what’s going to happen. Rubin has an argument why that won’t happen that people should probably pay attention to. While it has given us some comfort to hear his positive take on things such as oil, uranium and gold, his brief comments on natural gas tells you that his shifting in the energy industry should probably be taken seriously. The other point is that there’s probably an economics professor that taught Rubin some time ago that might be turning in his grave because it’s not often you hear a person aggressive on commodities and at the same time, expecting an economy to weaken and suggesting bonds! An absolute must-see debate and we don’t mean to gush, but once again, Rubin has predicted so many things, particularly so many outrageous things so well, this is a must-see! Which gets us to Phil Collins...not the singer….. CORK EXPLORATION (T-CRK) $3.62 -0.13 NATURAL GAS $4.78 -0.15 “We’re coming to a fork in the road” Philip Collins of Cork Exploration tells us and “the implications are going to be big for some of those natural gas stocks out there.” Collins says that fork in the road is dependant upon weather and how it will affect the natural gas business. A normal winter (something we haven’t had in a while) to cold winter should move gasses up to reasonable prices of $6.00 plus which would make things a little bit happier in the gas patch. On the other hand, if we have another warm winter there will be blood in the street. That, he suggests, “is because we would be in for a longer time of weaker gas prices, which would mean lots of mergers and acquisitions would occur as companies with weaker or destroyed balance sheets would simply have to find a way to survive” and all of this probably starts about November 1st, which is the traditional starting day for people to start paying attention to the important quarter for natural gas companies. He does suggest that a warm winter which would make things really ugly for the short term, could be excellent for natural gas in the longer term. He suggests that “the weak prices would simply mean an enormous cut back in drilling by virtually everyone over this coming winter and one winter’s lost drilling would take 2 1/2 normal years to make up for it.” Needless to say, if everyone stopped drilling, production would definitely decline sooner or later, particularly with the enormous decline rates on wells these days. Meanwhile, Collins points to some other tidbits in the natural gas business that we aren’t always aware of. And a lot of that has to do with the huge oil sands developments that one assumes will go ahead even with the big correction in recent oil prices. “Currently Canada produces 17 billion cubic feet a day” Collins suggests “and seven billion cubic feet of that is used for the domestic market. The other 10 billion cubic feet is exported to the United States.” But what’s going to make a big difference over the coming years is the oil sands and their absolutely enormous need for natural gas in their different processes. He figures that “we could see yearly increases in that consumption of almost .6 billion cubic feet a year to a point that down the road, 6 billion cubic feet a day of gas could go just to serving the oil sands business.” Cork Exploration For a great presentation on Cork, just visit their website. www.corkexploration.com We are talking to Philip Collins who is now the President, CEO and Director of Cork Exploration because Peter Linder yesterday had told us of his bullishness for natural gas and that Cork was one of his favorite picks for the coming year. Collins agrees with many of the figures Linder used that current production is roughly 1300 barrels a day equivalent (remember they virtually a 100% gas producer) and they hope to exit the year at close to 2600 barrels a day and some time next year, hit the 4000 barrel a day equivalent range. At least production appears to be going in the right way and none of this is high profile/high risk drilling, mainly just workmanlike, meat and potatoes-type stuff. What’s different about their gas though, is that it is liquid-rich, so Collins suggests they get up to a 20% premium for their product, meaning that they can make some decent money in the $4.00 to $6.00 an mcf range, that many people these days have trouble with high costs, suddenly making a buck at. Collins and much of his management crew worked together at Meridian and have a track record of making money for people, something that needless to say those who gotten aboard, hope doesn’t change, but gas prices could make things work a lot easier...or not. When we ask Collins to pick a stock that could double for us, he says he simply follows Meridian and doesn’t know of others that he would pick at this time. But he does make some predictions on commodities for us: Christmas 2006 Gas: $5.50 Oil: $65.00 Christmas 2007 Gas: $8.50 Oil: $72.00 We hope that gas prices are a tad better than that, but those oil predictions would certainly make (at least us) very happy! Natural Gas If you would like to receive the Late Edition, just e-mail Debbie at debbie_lewis@canaccord.com