₪ David Pescod's Late Edition November 6, 2007
PAN ORIENT ENERGY (V-POE) $10.70 -0.17
STERLING RESOURCES (V-SLG) $2.45 -0.20
PETROLIFERA PETROLEUM (T-PDP) $16.80 -0.20
Not a bad pick, that Pan Orient, don’t you think? We have to give kudos, pats on the back and all sorts of other praise to Octagon oil and gas analyst Warren Verbonac, one of the very first analysts to get onto the Pan Orient story and widely calling it one of his “top picks” when it was almost a third of current price.
When we caught up with Warren today, he’s suggesting they have up to 30 additional locations on their exploration program in Thailand and he wouldn’t be surprised to see them sell some of their heavy oil assets in Canada and move most of their operations over to Thailand.
Needless to say, if those potential 30 additional locations come in anywhere near what the last few wells have done (they’re shallow, they’re cheap to drill and are doing over a thousand barrels a day) Pan Orient has an awful lot more traveling to do. Stay tuned.
(Today, when we were talking to Peter Hodson of the Sprott Asset Management, he answers the question—if he could only buy one oil and gas stock today, would it be the selection of Pan Orient? Yes, it’s his number one pick and he suggests just because the stock has doubled or tripled over the last while, is not an excuse not to buy the story. He also has huge hopes for what this little company can be producing down the road).
When we ask Warren what would be the story of the day at least for the next few weeks, he suggests that Sterling Resources will be front and center. He comments that within two weeks they should know how their Breagh well is shaping up and if it does, it sets up a whole new era for gas development in the area.
As far as for picking a stock that could change a person’s lifestyle, he picks Petrolifera Petroleum for its exploration in Peru that now doesn’t look like it will be drilled until mid next year.
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Looking for something to worry about...if it’s not enough — all the concerns about the asset-backed paper in the U.S. and now around the world and terrorists potentially getting control of nukes in Pakistan? Well, maybe this asset-backed paper debacle could get worse if you listen to Goldman Sachs out of New York. They published a little report on October 21 suggesting that California home prices are over-valued by 35% to 40%, suggesting that the medium house price in California is $589,000, but suggesting that economic conditions support prices between $350K-$380K. Needless to say, if that happens, financial markets are in for more interesting times ahead.
AURORA ENERGY RES. (T-AXU) $16.60 +0.11
BRILLIANT MINING (V-BMC) $1.69 -0.01
The question is, wouldn’t you just love to know when insiders of a company are buying and selling their stock? Obviously they are in the best position to know what’s going on in the company, although even they have trouble from time to time judging what the markets are going to throw to them next…but as far as insiders in companies, when they buy and sell they have to report it to the regulatory agencies and those filings eventually become public.
Canaccord works with INK Research to watch for some of the bigger signs that something may/or may not be happening within a company. Remember that in the junior mining sector, a lot of the people who run these companies don’t exactly get rich doing so, it’s the dream of the big discovery or the big hit that could make everybody happy and rich that drives many of them forward. But still, from time to time you see some numbers that make you ask a question.
You still have to remember that these people who don’t draw the big salaries still have kids that might need University educations or summer trips to Europe, heck why not a winter vacation in Mexico? So sometimes you can understand insider sales, but once again, every once in awhile you see some much bigger numbers.
For instance Aurora Energy Resources. According to INK Spot, in the past 12 months, insiders have purchased a mere $1.765 million in equity but have sold 8.5 million dollars worth of equity in Aurora Energy Resources. Obviously they’re not hanging around for Canaccord analyst and uranium specialist Toni Wallis’ target of $21.00 - they seem to be quite happy with what’s going on.
Another story attracting some earnest selling seems to be Brilliant Mining, which over the last few months has been gaining a little bit and the stock reflects what’s happened to nickel over the last while. A huge run up earlier in the year followed by a dramatic correction. Now nickel is doing better but as far as insiders in the company, well in the last 12 months insiders have purchased $5.4 million in equity but have managed to sell $11.6 million in equity.
DELTA PETROLEUM (US:DPTR) $15.78 -0.51
You knew when the headline was “a gusher of woe could erupt if investors don’t see encouraging signs on drilling projects when Delta Petroleum reports results Thursday” that the article was going to be , oh lets say a little bit bearish, and it is. Barron's writes “Delta Petroleum is one of the small fry but it’s unlikely to become the gusher of gains that many of its fans expect,” they continue “when the company reports third quarter results Thursday, shareholders probably will focus more on the Denver companies most important drilling programs than on the quarterly numbers.
In particular “they look for good news on projects the company has touted as potentially big natural-gas plays.” Barron's continues, “given Delta’s funding needs, tepid cash-flow growth and history of overpromising and underperforming on gas production, any disappointment could batter the stock.” The stock has already been battered, courtesy of the Barron’s article.
“Analysts generally expect Delta to bleed red ink this year and maybe next,” the story goes “This year shares, of this $1 billion dollar marketvalue producer of mostly natural gas have reached reflected excitement over a couple of bally-hooed US gas fields especially in the Columbia River Basin straddling the Washington and Oregon border, and in Utah. For much of 2006 and ’07 the CRB was front and center in investor’s minds, speculation ran high beginning in 2006 about a possible jackpot there.” The Barron's article continues; “in the past Delta has been disappointed at other fields including DJ Basin Field in Colorado and the Howard ranch Wyoming project.” “At another site, the promising Paradox Basin in Utah, Delta Petroleum has run into mechanical problems”…well you get the drift.
The article had suggests that it was bad news that the stock could be down 20% or more , well that already happened, because of the article. Thursday’s news is still obviously going to affect the company and yes we have copies of the article for those who are interested.
Meanwhile do the Sprott folks who previously owned 3 million shares still have them, and high hopes?
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