₪ David Pescod's Late Edition May 11, 2007
ITHACA ENERGY (V-IAE) $2.40 n/c
ANTRIM ENERGY (T-AEN) $5.60 -0.03
PACIFIC ENERGY RES. (T-PFE) $3.25 +0.25
PETROLIFERA PETROLEUM (T-PDP) $18.49 +0.23
One thing about traveling a bit to see some of the oil and gas plays out there are the people, the brokers and the analysts one meets on those trails. Usually, some of them are interesting and some more interesting than most.
On our recent trip to California, we were glad to meet Thom Garvin, the Branch Manager for Octagon Capital in Calgary and the oil and gas analyst that he positively gushes over, Warren Verbonac. Thom gives a long list of oil and gas stocks that Warren has recommended that have done so well at a time when some oil and gas stocks (particularly gas) have not had a lot of fun. Names such as Antrim Energy (AEN), Calvalley Petroleum (CVI.A), Petrolifera (PDP) etc.
Verbonac gives us his list of four favorites now. Names such as Calvalley Petroleum (CVI.A) and in no particular order… Petrolifera Petroleum (PDP), Antrim Energy (AEN), Pacific Energy (PFE) and Ithaca Energy (IAE) and we would give you his potential target for Petrolifera Petroleum, but that would appeal to your sense of greed. Actually, it might be an understatement, but that’s depending on whether Petrolifera hits in Peru or not. It’s the main reason we did the interview with President Gary Wine of Petrolifera the other day, was to get up-to-date on their ongoing Argentina, Peru/Columbia story.
For those who follow Verbonac, a recent research report he did dated February 22nd, but still very much current was a look at the North Sea. Called “A Primer on the North Sea” and it’s his look at the opportunities in the area and he calls the feature, “Impressive Growth Opportunities for Junior Companies”.
In the introduction to the report he writes, In the North Sea, the United Kingdom Continental Shelf (UKCS) offers one of the most promising exploration and development opportunities of any area in the world. The original discoveries are maturing, and the majors’ interest is declining, offering outstanding opportunities for junior companies. The geological potential is complemented by one of the most favorable regulatory environments in the world.”
Verbonac continues, “Over the past 40 years, some 4,400 wells have been drilled on the UKCS resulting in over 315 producing fields and over 160 significant discoveries.”
“Exploration peaked in 1990, but activity resumed in 2005 as oil and gas prices strengthened.”
He gives a little bit of a history of the area, “North Sea oil was first discovered in the early 1960’s, with the first production occurring in 1975. However, production has peaked, falling by 10% in 2004 and an additional 12.8% in 2005. This was the largest decrease of any oil-exploring nation in the world, and had led the U.K. to become a net importer of crude for the first time in decades. By 2020, production is expected to fall to one-third of its peak. As major oil companies shift their focus elsewhere, many smaller opportunities are becoming available to smaller companies, and the well-developed infrastructure facilitates the development of small fields ideally suited to junior companies.”
Verbonac suggests, “North Sea gas discoveries also commenced in the 1960’s in both the U.K. and Dutch sectors. The North Sea has become the second-largest supplier of natural gas to continental Europe after Russia, but with recent political developments in Russia and Eastern Europe, the North Sea is becoming increasingly strategic for future gas supply. U.K. gas production has been declining by about 2% annually, and last winter, looming shortages caused spot gas prices to peak at over $20.00/mcf. Until recently, most gas prices were contract-based, but a spot market is developing, and may play a greater role in the future.”
He continues later, “Canadian oil and gas companies are amongst the most active participants in the renewal of the North Sea, and the growth potential is most evident in the smaller companies. Canada also has one of the most active capital markets in the world for financing juniors, and just as junior companies have revitalized the industry in western Canada, they have also initiated a renewal of exploration and production in the North Sea, offering outstanding investment opportunities in earlystage companies.”
His report takes a very good look at Antrim Energy, Bow Valley (BVX), Ithaca Energy (IAE) (one of his favorites) and Sterling Resources (SLG), one of Josef Schachter’s favorite stories, amongst others...
Verbonac has been generous and anyone who would like to take a look at the report and we suggest you do, just contact Debbie at debbie_lewis@canaccord.com.
If you would like to receive the Late Edition, email Debbie at debbie_lewis@canaccord.com |
