Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: ms.smartest.person who wrote (1792)	11/21/2006 4:52:23 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition November 21, 2006 TRANSGLOBE ENERGY (T-TGL) $5.82 -0.11 It was a while ago that we were writing on more than one occasion that Bill Powers, then the editor of “Canadian Energy Review” suggested frequently that if he could only buy one oil and gas stock, it would be TransGlobe Energy. He also had some very lofty goals at the time. Now running a hedge fund, we haven’t heard that much about TransGlobe over the last many quarters, but suddenly it may be back in the news. With the takeover of Centurion Energy by Mid-East interests, the question arises, does the Mid-East (with its financial companies purportedly awash in cash these days, because of high oil prices) could they not be looking at potential other takeouts of Canadian-based oil and gas companies operating in the Mid-East? Names that come to mind include Rally Energy (RAL) and Candax Energy (CAX)—who now has the new players out of the Mid-East as their partners with Centurion (CUX) being bought out) and it was time to visit Ross Clarkson of TransGlobe Energy. It was back on November 17th that they announced a new discovery on Block S-1 in Yemen. The well, Osaylan #2, flowed 1300 barrels a day of 42.1 degrees API oil plus some gas. They have a 25% working interest. When we talked to Clarkson, he suggested that while “production may have stalled over the last few quarters, it was mainly because they’ve had to build some production facilities, pipelines and the like to increase production and at this points” he suggests “they’ve got 6600 barrels of production capacity total, some of it behind pipe.” While some of the exploration has been a little quieter the last few quarters, now that changes dramatically as they have six wildcat plays over the next six months. And of course, each hit is significant. For instance, the West Osaylan discovery means somewhere between six and 12 development wells, Clarkson tells us. While the bulk of their work is Yemen its their exploration play in Egypt that should be spudded in February that is probably going to attract a little attention. Two wells are expected to spud in the Nuqra Block in Egypt and its an absolutely enormous chunk of land and I am sure people have noticed over the last while that Egypt has been a very fertile ground for exploration. They have roughly 7 million acres of land to take a look at, so I suspect when that play spuds more attention might be paid. Plus in the background there is always the wonder about whether they are a potential takeover target… Meanwhile, analysts are starting to pay attention to the company as well, Haywood Securities analyst Fred Kozak gives the company low political risk, moderate to high valuation risk and gives it a $8.50 target. RBC is giving it a $7.00 target and Fraser Mackenzie calls it a strong buy with a 12 month target of $7.00. Octagon Capital is looking for the most aggressive target of $9.50. Meanwhile, Clarkson has in the past picked a few stocks for us and we note that some of them were quite successful so we ask him to focus again and remind him that we are looking for doubles, because we are fearless here at Stocktalk. He suggests that he is up to the task and picks Culane Energy (CLN). A company with a relatively small market cap that has already been on a run. Management and insiders own almost 60% of the float, he suggests, and its an oil play…not natural gas. His target is a double. PLATINUM PLATINUM GROUP METALS (T-PTM) $2.29 +0.27 It’s been interesting to see so many commodities experiencing a run and then a correction, sometimes painful, and then have a new commodity take its place as “Star of the Day”… Gold and silver everyone watched go on a rampage then saw one heck of a correction six months ago and for that matter even nickel, zinc (heck even lead) have had huge moves…and then corrections. In the last few days, the commodity of choice seems to be platinum. Thirty percent of platinum’s use is in Jewelry where its admired for its color, strength, hardness and resistance to tarnish, but it’s also used as an autocatalyst and for the production of hard disk drive coatings. It’s used in the production of fertilizers and explosives and it’s even used in glass making equipment! And there’s not a particularly big market for it, so with the demand going up suddenly, we’ve seen a price spike. Also the suggestion that there might be an ETF formed to play platinum, considering the already severe shortage of the commodity has moved the commodity to near-record highs. But how to play it is a good question. With the buyout of AfriOre (AFO), which had been going straight up, you are looking at several plays in South Africa, but maybe the Platinum Group might be worth a look as well. Today, it’s up almost 10%. The Stocktalk Beer and Pizza Gathering has been cancelled for this Friday.