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To: ms.smartest.person who wrote (1727)	11/14/2006 6:16:44 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition November 14, 2006 TUSK ENERGY (T-TSK) $2.64 -0.16 CDN. SUPERIOR ENERGY (T-SNG) $2.18 -0.02 Yesterday, Tusk Energy and Zenas Energy announced a merger— but with Tusk shares way down and Zenas shares way up, you ask yourself, merger or some sort of takeover? Probably the latter and I suspect we’ll see a lot more as the mature western Canadian sedimentary basin, home of high service costs, land costs, you name it, sees more ongoing rationalization now that the “sugar daddies” (the income trusts) are gone. Which gets us to Alex Squires. A fan of Tusk Energy and their Mega projects which is in the process of ramping up production. We went to him for his take in all of this, but so far he is not up to snuff yet. But it gets us to a related story! We recently did a piece on the “Big Plays” or big risk/big reward oil and gas plays that are out there and there is one company that Squires is on the board of, that we should have included in that story. Canadian Superior Energy. Squires is on the board, but ironically because of that, he said he would prefer not to comment on it. But we will—or perhaps, the associated maps will do all the talking we would need to. Canadian Superior run by mercurial Greg Noval, has a traditional home in Western Canada. But over the years, they had taken some expensive high risk shots offshore Nova Scotia. Big, expensive, high risk shots that so far have been disappointing. Now the company is just a few months away from drilling offshore an area that has been very fruitful—offshore Trinidad. While Venezuela and its possibly out-of-control leader Chavez gets a lot of press and attention and everyone knows about their huge heavy oil reserves and their role in OPEC. Trinidad’s populations is a mere 1.3 million and it’s off most people’s radar screens as far as it being an energy players. It shouldn’t be. There has been so much gas discovered around Trinidad that much of the fertilizer industry previously based in the Gulf, has moved there. And some of the discoveries are huge. It’s one of the largest natural gas basins in the world. For instance, 15 of the top 25 of BP’s producing wells worldwide, are located in Trinidad. Or taking of size, British Gas’ Dolphin field development has two wells...that are capable of making 300 million cubic feet a day. Or how about BP’s Cannonball development—three wells making over 700 million cubic feet a day. Another statistic to show how little Trinidad has become a player in energy markets—80% of North America’s LNG is supplied from Trinidad. The maps accompanying show you Venezuela, Trinidad and the neighborhood which is obviously a great area for the energy hunt which shortly Canadian Superior will be drilling. For a quick look, go to www.cansup.com and see the neighborhood on their website and it gives you a feel for just how exciting the area might be. The rig to drill the two wells offshore Trinidad for Canadian Superior is currently being refurbished and should start drilling sometime in early February. The target? Well, how about 4 Trillion Cubic Feet! Yes, that’s 4 Trillion Cubic Feet...it’s big. Deals in Trinidad tend to be a little bit wonky sometimes, so you might want to be sure you understand how their deals work. Meanwhile, we ask Squires (the fan of Tusk and director of Cdn. Superior) our favorite question...if you could only buy one stock today, what would it be? (As a director, he can’t pick it) and he goes with Oilexco. Production to start at month end he suggests and there have been many delays… For a look at Tusk Energy, Canaccord analysts yesterday put out a look at the business combination between Tusk and Zenas and if you would like to see a copy, just e-mail Sandra at sandra_ wicks@canaccord.com. For your spare time, go to the Canadian Superior website and discover just what’s going on in Trinidad and that area of the world. There are very few reports out on Canadian Superior, but there is one by Philip McPherson of C.K. Cooper & Co. and it is a little stale-dated, but it gives you the gist for the play. If you would like a copy, just e-mail Sandra. Disclosure: Tusk Energy and Zenas Energy: Canaccord has not rated these stocks. They are currently Under Review. Oilexco Inc: Canaccord Capital covers this stock and has a Speculative Buy rating on it. (Speculative buy: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the stock may result in material loss.) Canaccord has recently participated in a financing for Tusk Energy. Canaccord has recently led a financing for Oilexco Inc. If you would like to receive the Late Edition, just e-mail Debbie at debbie_lewis@canaccord.com