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To: ms.smartest.person who wrote (2269)	3/26/2007 7:39:19 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition March 23, 2007 OILEXCO INC. (T-OIL) $8.14 +0.40 CORRIDOR RESOURCES (T-CDH) $8.00 -0.14 Two of the companies that we have been following here rather closely over the last year and longer, have been Oilexco and Corridor Resources. With Oilexco expected to spud Laurel Valley this weekend, we finally get an update from the one analysts who has been following this and predicting what next better than anyone else—Fred Kozak, the former Haywood analyst, now with Canaccord who just published today his first thoughts on Oilexco and we are pretty happy with it so far. The target is $14.00 and for those looking for his work, contact Sandra Wicks at sandra_wicks@canaccord.com. Bottom line from Fred is that Canaccord is “reinstating coverage after coming off restriction due to the recent equity financing.” “With the closing of the 17.25 million share equity financing, Oilexco has additional strength on its balance sheet to fund an aggressive 2007 capital program.” As far as valuation on the stock to come up with this $14.00 target, he suggests, “it is based on a multiple of 4.4 times 2008 debt adjusted CFPS and does not include the potential impact of the company’s current exploration program.” He also writes in the introduction, “The next few months will see multiple catalysts including the start-up of production from Brenda/Nicol (likely in April), an exploration well about to be drilled at Laurel Valley as well as the next exploration well to be spudded after the Laurel Valley prospect at Huntington. In addition, the Ocean Guardian is expected to arrive in mid-April and is likely to first drill a well on the Ptarmigan prospect and then move to the 2007 discovery at Shelley for delineation.” Once again, he has an 8-page report for those who would like a copy of it. The other story that we follow closely because Andy Gustajtis has been so fond of it and it certainly has been a rewarding stock over the last year is Corridor Resources and there hasn’t been a lot of news out on it over the last while other than their historical run of unbelievably good luck. It seems wherever they drill, they find stuff. And to think they made their original discovery looking to drill a waterdisposal well and come up with gas! On an update today, they mention that “drilling operations have commenced at the P-76 well in the McCully natural gas field.” It’s the first to be drilled using the newly acquired triple drilling rig. “This well is designed to evaluate and test the Hiram Brook formation approximately 600 meters west of the M-66 well” and very interestingly “to penetrate and evaluate the top 550 meters of the Frederick Brook dolomitic shale formation.” This could be very important because if the Frederick Brook is as hopeful as some suggest, this story just gets more and more significant. Meanwhile, the Nabors #4 drilling rig has been moved to a surface location 2 kilometers from the McCully D-48 well and it also will be drilled to evaluate the gas potential of the Hiram Brook and the upper part of the Frederick Brook. Meanwhile, they mention some cost over-runs on the building of facilities and due to permitting and other problems, looks like their cash flow and finally our look at what their initial production is going to be, now probably won’t happen until early June. Needless to say, we’d love to have comments from Andy Gustajtis at this time, but as we’ve mentioned, he’s somewhere in deepest/darkest Costa Rica. RALLY ENERGY (T-RAL) $5.55 +0.07 CONNACHER OIL & GAS (T-CLL) $3.80 +0.05 It’s a question that we love to ask analysts, brokers and followers of individual stories from time to time... “If you could only buy one oil and gas stock right now, what would it be?” Of course, these are usually technical people and technical people like to be asked technical questions, such as is it natural gas you are after? Is it natural gas with leverage? Is it a particular play somewhere in the world? What is it you are after? No, we just want to ask this openended question. “If you could only buy one oil and gas stock today, what would it be?” As we said, most people hate getting that question, so now that we’ve been in Mexico for a while and with the assistance of a few margueritas, pina colada’s and pacificas, we’ve had to contemplate the question ourselves. Some of the answers appear obvious and anyone who has followed Rally Energy looks at chart and must admit this—you can’t find a better chart on any oil and gas company that looks better. Abby Badwi has done an amazing job with this company, particularly with the use of technology and he has an incredibly aggressive target of 25,000 barrels a day, which if he does achieve, this stock is going to be somewhat higher. But remember, their assets are in Egypt and Pakistan. If you could only buy one oil and gas stock, would this be it? Or how about Oilexco which also a pretty decent chart and some pretty good performance over the last two years. If you would like to receive the Late Edition, email Debbie at debbie_lewis@canaccord.com