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To: ms.smartest.person who wrote (2709)	7/5/2007 10:05:15 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition July 5, 2007 VERO ENERGY (T-VRO) $7.32 +0.03 When we meet with oil and gas guy Doug Bartole, you would think he could be a little bit happier. After all, with all the analysts that cover his story suggesting he’s a buy (some with some pretty decent targets and some calling it a top pick) you would think it’s a perfect world, particularly since his Company is in the top quartile in virtually every parameter you can use for testing an oil and gas company. But Vero Energy has a huge problem...it’s natural gas and we all know the problems natural gas companies have been having these days...increasing costs, smaller pools quickly depleting and most importantly, low gas prices. We have also printed many times the big problem for natural gas companies as far as predicting what next, because they are so dependent on weather. A hot summer and a cold winter for North America could make a big difference for natural gas prices, but predicting those parameters is next to impossible and the weather people who have tried it, have seen many simply embarrass themselves over the last few years. Bartole also points to another factor that’s making a big difference this year on natural gas prices and that’s the import of so much LNG gas into North America, now approaching 2.5 BCF/day, he suggests. The reason for this, he believes, is the big difference between European and North American gas prices. Currently, Europe (after a very mild winter) has lots of inventory and natural gas there is selling for a modest $4.50. With North American prices at $6.50, suddenly it looks fairly decent. Bartole still isn’t all that bullish when we ask him to predict gas prices for this coming Christmas as he suggests a mere $7.00 to $8.00 an mcf. He does say that sometime in the next six to 18 months, “something is going to happen that’s going to spur natural gas prices and a person is going to want to be there.” Once again, he points to the usual...much less money being spent exploring for it in Canada, a topping out in rig usage in the United States, costs south of the border finally starting to go up, smaller pools being discovered and one factor that he thinks in the coming years is going to make a huge difference and that's the big usage of natural gas by the oil sands projects when they get up and running. But back to Vero...Doug points out that much of his staff of graduates is from the True Energy days. Much of their production (and there production is centered around a handful of key areas...Edson currently doing about 2600 barrels a day, Whitecourt 520 barrels of oil equivalent a day and Corbett almost 500 barrels a day) has ramped it up nicely which is probably why the analysts love it, graduating from under 1000 barrels a day the fourth quarter of 2005 to 1400 first quarter of 2006; 2300 second quarter of 2006 and expected to exit 2007 at 5200 barrels a day equivalent. Looking down the road, he suggests 6200 if he had to for 2008 and again, this is a team that is well thought-of in the oil patch. If you are looking for a little excitement down the road and who isn’t, they have a well coming up in the Ricinus area that offsets the Tay River discovery that is currently producing 78 MCF/d and needless to say, should it be successful… Meanwhile, there is a picture here beside this article showing one reason why many of the oil and gas explorers in Canada have had big problems...weather. Notice the lake surrounding some of their equipment in the Barrhead area. You don’t get a lot of work done with conditions like that and Doug suggests that the Edson area isn’t a lot better either. The volatility and excitement continues in commodity markets. Interesting to see that uranium has its first step back this week in years and yet some of the bigger uranium producers act as if uranium had dropped $30.00. Meanwhile, the one commodity acting like a missile recently is...you never would have guessed it...lead! How do you play lead? Well, there’s not a lot of pure ways of doing so. Haywood analyst Andrew Kaip points to mainly by-product from other mines and suggests two companies with good lead exposure - Bear Creek Mining (BCM) a company you usually think of as a potential silver producer and Aquiline Resources (AQI) also a precious metals producer, but both have big lead components. Canaccord’s Wendell Zerb suggests the same and mentions companies such as Lundin Mining (LUN) which has exposure to other metals but also a big lead component; Selwyn Resources (SWN) and Apex Capital (AAX.P). But he suggests the one with the most leverage is Ivernia Inc. (IVW) and that’s the Australian company that has currently ceased production because of health concerns.