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KCL.V - Potash One "Lotto Ticket"
I loaded up as the price dipped after the P.P. This stock is going to take off due to the strength of fertilizer stocks. The big story of 2008 is going to be FOOD. The combination of 30 year low grain inventories, added B.R.I.C. demand for higher protein diets, biofuels, and high grain prices will drive fertilizer prices through the roof! Look at Mosaic and Potash Corp of Sask. market caps, both approx $40 BILLION. KCL has a market cap of $75 MILLION.
The 43-101 reserve of 360 million tons at $400/ton is $144,000,000,000???? Is that right? $144 Billion??? I read that there was an estimated 10,000 recoverable tons per acre on the 97,000 acre concession. That figure would be 970,000,000 tons, yes 970 MILLION TONS. The company is using part of the $10 million raised in the P.P. to drill the property and prove the numbers in the report.
Here is a link to the 108 page 43-101 report - http://www.isxresources.com/i/pdf/TechnicalReport20070208.pdf
These numbers are just too big for me to figure so let's just use the Mosaic Belle Plain Mine that is located directly south, adjacent to the KCL property. Here is the map http://www.isxresources.com/s/LegacyProject.asp
Belle Plain produces 2.8 million tons of potash per year through a "solution" mining process. The revenue at $400/ton is $1,120,000,000. *They are currently expanding Belle Plain to increase production by an additional 400k tons per year. The same mineralization being mined by Mosaic extends north to KCL's property.
My feeling is that one of these scenarios plays out:
1. Mosaic buys KCL to prevent them from competing with them AND increasing their proven reserves.
2 KCL gets bought out by a large fertilizer company using their recently inflated stock as currency to do a stock deal.
3. A Sovereign Fund from China or some other country buys KCL.
4. KCL raises the funds to build a mine.
The word of KCL is getting out, look at this recommendation from last week:
http://www.dailybuyselladviser.com/news/blank/249-1.html?type=pf
Mad about potash
Mr. Paquette tells us that as he was writing the latest issue of his advisory, three spirits appeared to him. Well, in a manner of speaking.
Business channel CNBC flickered in the background as he wrote. On came commentator Dennis Gartman. He was asked about his favourite thing right now — “and the first two words out of his mouth were ‘fertilizer’ and ‘potash’.”
Next, it was the turn of Mad Money’s Jim Cramer who, in his inimitable way, came on screen with a pile of dirt, potatoes and corn cobs, hoe in hand, and declared that he was keen on the “AG’s” — agricultural stocks. The first firm that sprung to his lips was U.S. fertilizer giant Mosaic Company (NYSE-MOS), which has a market cap of $35 billion and a big property in Esterhazy, Saskatchewan.
As a rule, says the editor, this kind of consensus comes before a market top, but fundamentals for an agricultural bull market remain in place. Wheat carryovers are holding at low levels and demand still outweighs supply.
Then, as if to seal the deal, up popped well-known Canadian adviser Donald Coxe, and he was singing the praises of potash as well.
The Russian sinkhole and a new name in potash
This sent the Vancouver editor to his charts. “The technicals for the intermediate and longer term potash chart are extremely positive.” Although prices have more than doubled in four years, that doesn’t necessarily mean that a bull market in potash has run its course.
“Meantime, in an already tight market, prices are being goosed by reports of a large sinkhole at a Russian mine that could threaten 10% of the world’s supplies.” Major producers are raising prices.
Which brings Mr. Paquette to a stock that may be ready to ride that trend. You would not have found PotashOne (TSX/V-KCL) listed as recently as the beginning of this month. It was called ISX Resources. Emerging Growth Stocks had already recommended it in October 2006 and seen its price grow from $0.25 to $1.00 by August of this year.
On November 26, the company held its annual general meeting, changed its name and appointed a new President and CEO, Mr. Paul Matesyk, the co-founder of Energy Metals Corp., which was recently bought out by Uranium One. On December 6, PotashOne began trading under its new name, “just in time to catch the wave of investor interest in the ‘AG’ stocks.”
No ceiling on the price
Now it can move forward in a big way. “Given the amount of interest in this sector and the fact they already have a resource of hundreds of millions of tons of the stuff as opposed to looking for it, I don’t think we can put a ceiling on the price until we can estimate what kind of cash flow it could generate and how many shares it might take to get production,” says Mr. Paquette.
There’s a tempting bit of geography surrounding this stock, too. “Mad” Jim Cramer’s fertilizer pick, Mosaic, has its big Saskatchewan property right next door to PotashOne’s. That could spell takeover.
“The ultimate route they take will depend on what the shares do,” explains the editor. “If interest in Potash stays white hot and the stock price continues rising, they could become a threat to other producers and get taken out. Give me more time to come up with a target price,” he asks his readers. The stock closed yesterday at $2.85.
KCL.V - Potash One "Lotto Ticket"
(I have summarized much of what has been said here over the past few weeks)
I loaded up as the price dipped after the P.P. This stock is going to take off due to the strength of fertilizer stocks. The big story of 2008 is going to be FOOD. The combination of 30 year low grain inventories, added B.R.I.C. demand for higher protein diets, biofuels, and high grain prices will drive fertilizer prices through the roof! Look at Mosaic and Potash Corp of Sask. market caps, both approx $40 BILLION. KCL has a market cap of $75 MILLION.
The 43-101 reserve of 360 million tons at $400/ton is $144,000,000,000???? Is that right? $144 Billion??? I read that there was an estimated 10,000 recoverable tons per acre on the 97,000 acre concession. That figure would be 970,000,000 tons, yes 970 MILLION TONS. The company is using part of the $10 million raised in the P.P. to drill the property and prove the numbers in the report.
Here is a link to the 108 page 43-101 report - http://www.isxresources.com/i/pdf/TechnicalReport20070208.pdf
These numbers are just too big for me to figure so let's just use the Mosaic Belle Plain Mine that is located directly south, adjacent to the KCL property. Here is the map http://www.isxresources.com/s/LegacyProject.asp
Belle Plain produces 2.8 million tons of potash per year through a "solution" mining process. The revenue at $400/ton is $1,120,000,000. *They are currently expanding Belle Plain to increase production by an additional 400k tons per year. The same mineralization being mined by Mosaic extends north to KCL's property.
My feeling is that one of these scenarios plays out:
1. Mosaic buys KCL to prevent them from competing with them AND increasing their proven reserves.
2 KCL gets bought out by a large fertilizer company using their recently inflated stock as currency to do a stock deal.
3. A Sovereign Fund from China or some other country buys KCL.
4. KCL raises the funds to build a mine.
The word of KCL is getting out, look at this recommendation from last week:
http://www.dailybuyselladviser.com/news/blank/249-1.html?type=pf
Mad about potash
Mr. Paquette tells us that as he was writing the latest issue of his advisory, three spirits appeared to him. Well, in a manner of speaking.
Business channel CNBC flickered in the background as he wrote. On came commentator Dennis Gartman. He was asked about his favourite thing right now — “and the first two words out of his mouth were ‘fertilizer’ and ‘potash’.”
Next, it was the turn of Mad Money’s Jim Cramer who, in his inimitable way, came on screen with a pile of dirt, potatoes and corn cobs, hoe in hand, and declared that he was keen on the “AG’s” — agricultural stocks. The first firm that sprung to his lips was U.S. fertilizer giant Mosaic Company (NYSE-MOS), which has a market cap of $35 billion and a big property in Esterhazy, Saskatchewan.
As a rule, says the editor, this kind of consensus comes before a market top, but fundamentals for an agricultural bull market remain in place. Wheat carryovers are holding at low levels and demand still outweighs supply.
Then, as if to seal the deal, up popped well-known Canadian adviser Donald Coxe, and he was singing the praises of potash as well.
The Russian sinkhole and a new name in potash
This sent the Vancouver editor to his charts. “The technicals for the intermediate and longer term potash chart are extremely positive.” Although prices have more than doubled in four years, that doesn’t necessarily mean that a bull market in potash has run its course.
“Meantime, in an already tight market, prices are being goosed by reports of a large sinkhole at a Russian mine that could threaten 10% of the world’s supplies.” Major producers are raising prices.
Which brings Mr. Paquette to a stock that may be ready to ride that trend. You would not have found PotashOne (TSX/V-KCL) listed as recently as the beginning of this month. It was called ISX Resources. Emerging Growth Stocks had already recommended it in October 2006 and seen its price grow from $0.25 to $1.00 by August of this year.
On November 26, the company held its annual general meeting, changed its name and appointed a new President and CEO, Mr. Paul Matesyk, the co-founder of Energy Metals Corp., which was recently bought out by Uranium One. On December 6, PotashOne began trading under its new name, “just in time to catch the wave of investor interest in the ‘AG’ stocks.”
No ceiling on the price
Now it can move forward in a big way. “Given the amount of interest in this sector and the fact they already have a resource of hundreds of millions of tons of the stuff as opposed to looking for it, I don’t think we can put a ceiling on the price until we can estimate what kind of cash flow it could generate and how many shares it might take to get production,” says Mr. Paquette.
There’s a tempting bit of geography surrounding this stock, too. “Mad” Jim Cramer’s fertilizer pick, Mosaic, has its big Saskatchewan property right next door to PotashOne’s. That could spell takeover.
“The ultimate route they take will depend on what the shares do,” explains the editor. “If interest in Potash stays white hot and the stock price continues rising, they could become a threat to other producers and get taken out. Give me more time to come up with a target price,” he asks his readers. The stock closed yesterday at $2.85.
NAKED SHORT SELLING in JR'S
Listen to the 3rd hour of this weeks broadcast. I was shocked at what is going on with the abuses in naked short selling and what could be going on with our Jr's.
http://www.financialsense.com/fsn/main.html
There is also a link to the entire Bloomberg vidio on naked short selling.
Kipp
NAKED SHORT SELLING in JR'S
Listen to the 3rd hour of this weeks broadcast. I was shocked at what is going on with the abuses in naked short selling and what could be going on with our Jr's.
http://www.financialsense.com/fsn/main.html
There is also a link to the entire Bloomberg vidio on naked short selling.
Kipp
Oilexco Closes Balmoral Acquisition and Updates Operations
Friday December 21, 7:00 am ET
CALGARY, ALBERTA--(Marketwire - Dec. 21, 2007) - Oilexco Incorporated and its wholly owned subsidiary Oilexco North Sea Limited ("Oilexco" or the "Company") (TSX:OIL - News; LSE:OIL - News) is pleased to announce that the acquisition of additional interests in the Balmoral, Glamis, and Sterling oil fields, as well as the Balmoral FPV has closed and that operatorship of the Fields and the Balmoral FPV has been transferred to Oilexco.
Arthur Millholland, President and Chief Executive Officer, commented "This is a milestone for our Company as we now are a UK North Sea facilities operator. We will now focus on optimizing our production from the Balmoral core area. This will allow Oilexco to grow is production in the near term, and flatten our declines in the long term."
The Company has also successfully commissioned its multi-phase pump at Brenda. Production from the Brenda and Nicol Fields has increased from previous levels, and will continue to do so as the Brenda subsea production system is further optimized. These operations will continue over the next few weeks.
Drilling operations at the Morro/Coronado (72.7% WI) exploratory well have been completed. Two long reach well bores from a central drilling location were drilled targeting oil in the Paleocene Forties sand at Coronado and Morro respectively. The results the well bores are under evaluation. Wireline testing was unable to be undertaken due to the highly deviated nature of the well bores. The drilling location is currently being abandoned. Once these operations are completed, the semi-submersible Ocean Guardian will move the Company's Bugle project located in Block 15/23d to appraise the 1997 15/23d-13 Upper Jurassic discovery which tested 7,400 Bbl/d of 44 degrees API sweet crude oil. This re-entry well bore will attempt to target the oil- water contact which is currently undefined.
About the Company
Oilexco is an oil and gas exploration and production company active in the United Kingdom. Oilexco's producing properties, exploration and development activities are located in the UK Central North Sea, specifically in the Outer Moray Firth and Central Graben areas. Oilexco operates in the United Kingdom through its wholly owned subsidiary, Oilexco North Sea, a company registered under the laws of England and Wales. Oilexco shares are listed for trading on the London Stock Exchange (LSE) and the Toronto Stock Exchange (TSX) under the symbol "OIL".
Forward Looking Statements
This disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond Oilexco's control, including: the impact of general economic conditions in the areas in which Oilexco operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with oil and gas operations, therefore Oilexco's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, which Oilexco will derive therefrom. All statements included in this press release that address activities, events or developments that Oilexco expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include future production rates, completion and production timetables and costs to complete wells, and production facilities. These statements are based on assumptions made by Oilexco based on its experience perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.
Contact:
Arthur S. Millholland
Oilexco Incorporated
President
(403) 262-5441
Brian L. Ward
Oilexco Incorporated
Chief Financial Officer
(403) 262-5441
Rob Elgie
Oilexco Incorporated
Manager Investor Relations
(403) 262-5441
Website: www.oilexco.com
James Henderson
Pelham PR
Managing Director
44 (20) 7743 6673
Alisdair Haythornthwaite
Pelham PR
Associate Director
44 (20) 7743 6676
Clayton Bush
Canaccord Adams Limited
Vice-President
44 (20) 7050 6500
Andrew Osborne
Merrill Lynch International
Managing Director
44 (20) 7996 1000
--------------------------------------------------------------------------------
Source: OILEXCO INCORPORATED
Fertilizer Stocks On Fire
Can anyone open this link and see my yahoo fertilizer stock portfolio performance:
http://finance.yahoo.com/p?v&k=pf_73
May need a password???
Kipp
Fertilizer Stocks On Fire
Can anyone open this link and see my yahoo fertilizer stock portfolio performance:
http://finance.yahoo.com/p?v&k=pf_73
Kipp
timhyma - Here is a link to the CBOT. Corn is double what it was 2 years ago. This is what happens when we decide to burn our food. It will be interesting to see how the public reacts to high gas prices AND high food prices.
http://www.cbot.com/cbot/pub/page/0,3181,1213,00.html
Kipp
OK Bobwins I have a job for you!
Get Petrobank on the phone and broker a TXCO deal for them to j/v the San Miguel and apply THAI. Should be worth a few billion $ for TXCO and unlock the value of the 7 billion barrels of heavy oil. Petrobank can add it to reserves.
I will even pay for your plane ticket if you decide a face to face would get it done faster.
Kipp
Kudos and Amen kozuh
To infinity and beyond!
Watch the Thai election Dec. 23rd.
Bobwins - POE guesstimation
Thanks for the comments, I will look at it again and make some changes. The number I think I kept under the gravitational forces was my 2000bopd monthly addition to production. Figuring 1,000bopd per new well drilled I feel is very conservative.
Here are the last 5 wells drilled and what the test rates were-
L44H-D1 - 3940bopd (**Largest onshore well ever drilled in Thailand. Choked down due to inability to haul it!)
N52-D1 - 1921bopd
N58-D1 - 1480bopd
L44-H - 1265bopd
N56-D1A - 615bopd (They stated this one would be lower)
So the average is 1844bopd.
I also cut the new wells drilled in 2008 from POE's 28 to 24 wells in my projection.
I am staying conservative and even if I cut the forecast in half we have a great shot at the multi-bagger in a tough market.
Thanks for all of your help Bob!
Kipp
SST - I hope they wait until right after the holidays. I think some Canadian tax loss sellers will be kickin' themselves.
Kipp
nsomniyak - Exchange rates are listed at this Yahoo link. It is actually a good feed so pretty darn accurate and handy to read:
http://finance.yahoo.com/currency
Typing your handle reminded me of how little sleep I got reading about the Thailand elections coming this weekend. I determined Thailand is a huge oil importer and they are rolling out the red carpet for Big Oil to come a drilling. Expanding refineries and keeping the 6.5% royalty in tact.
POE will serve us all well in the new year!
Good Luck,
Kipp
Added a little UC to my underwater purchase before it got haulted. Here is the update:
http://biz.yahoo.com/iw/071219/0342161.html
Kipp
Getting Ready for POE Oil!
Thai Oil completes $218 mln capacity expansion
Wed Dec 19, 2007 3:32am EST
BANGKOK, Dec 19 (Reuters) - Thai Oil TOP.BK, the country's top refiner, said on Wednesday it had completed a $218 million expansion of its nameplate capacity by 22 percent to 275,000 barrels per day a week ahead of schedule.
Thai Oil, which shut its crude distillation unit 3 (CDU-3) refinery for maintenance on Oct. 6, was in the process of running tests of the CDU unit, which can produce at up to 300,000 bpd, it said in a statement.
Its Thai Paraxylene (TPX) subsidiary was on track to raise its annual capacity to 900,000 tonnes of aromatic products from 420,000 tonnes in the first quarter of 2008, it said.
At 0820 GMT, Thai Oil shares were down 1.2 percent at 82 baht, while the overall Thai stock market index .SETI was 1.18 percent lower. ($1 = 33.68 Baht) (Reporting by Khettiya Jittapong, editing by Michael Battye)
Don Coxe - Basic Points Recommendations
INVESTMENT RECOMMENDATIONS
1. Remain heavily underweight banks, particularly investment banks that
have displayed monumental stupidity. Do not assume that a change at the
top will automatically convert them into temples of wisdom, (unless it is
accompanied by demands for the departing to repay bonuses based on bets
that turned out disastrously). Better to assume that, like subprime-based
CDOs, there are layers of rot that can make the entire product dangerous
to your financial health.
2. Remain overweight Emerging Markets, emphasizing those that are oil, gas,
and/or food exporters.
3. Soaring food costs threaten stability for some Third World economies. We
have been ardently endorsing India since we returned from our leave of
absence a year ago. We are now more cautious, because a weak monsoon
could be politically and economically destabilizing at a time of $4 corn
and $10 wheat.
4. Remain heavily overweight gold—both stocks and the ETF. Gold is almost
as good a protection against banking problems as SKF—the UltraShort
Financials ETF—a security which may not be a suitable investment in
some portfolios.
5. We continue to believe that the Agricultural stocks are the pre-eminent
investment class of our time. Farm incomes are rising rapidly, and, in the
US, farms and farm land are the real estate assets that are rising in value
and are virtually immune to foreclosures. That means the leading Ag
companies have great pricing power and minimal credit problems. We
now hear suggestions that because food inflation has finally made it to
the cover of The Economist, it is time to start moving toward the exits. Not
so: We think that fine cover story could be the atonement—At Last!—for
the magazine’s famous 1999 cover: $5 Oil.
6. Remain overweight oil and gas producers, including the Alberta oil sands
producing companies. As disappointed as we are with the new royalty
schemes in that province, Alberta certainly remains more attractive than
Nigeria or Angola—and much more attractive than Russia, Kazakhstan,
or Venezuela.
7. We think it is time to begin accumulating the refiners that are equipped
to handle heavy high-sulfur crude. The collapse of the crack spread has
savaged refiners’ earnings, but that will eventually rebound. The Saudis
have virtually turned out the Light, and less and less of the oil that the
Gulf states will be lifting will be of the most desirable grades.
8. Retain the base metals stocks that have long-life unhedged reserves in
secure areas. Even if there is a global recession caused by global collapses
of subprime paper and LBO loans, it will not be deep enough to drive
base metal prices back to 2004 levels—but would be worrisome enough
to push further mine development even farther into the future.
9. When borrowing, borrow where possible in dollars. When investing, invest
where possible in other currencies.
10. Stagflation is a bad backdrop for bonds—and for non-commodity stocks.
The central bankers could have headed it off had Wall Street behaved
with a modicum of morality, but the Fed and its brethren are forced into
sustained reflation because of the global solvency crisis. Corporate earnings
for most sectors will not meet current optimistic Street forecasts, and rising
inflation will reduce the market’s P/E.
Don Coxe - Basic Points Recommendations
INVESTMENT RECOMMENDATIONS
1. Remain heavily underweight banks, particularly investment banks that
have displayed monumental stupidity. Do not assume that a change at the
top will automatically convert them into temples of wisdom, (unless it is
accompanied by demands for the departing to repay bonuses based on bets
that turned out disastrously). Better to assume that, like subprime-based
CDOs, there are layers of rot that can make the entire product dangerous
to your financial health.
2. Remain overweight Emerging Markets, emphasizing those that are oil, gas,
and/or food exporters.
3. Soaring food costs threaten stability for some Third World economies. We
have been ardently endorsing India since we returned from our leave of
absence a year ago. We are now more cautious, because a weak monsoon
could be politically and economically destabilizing at a time of $4 corn
and $10 wheat.
4. Remain heavily overweight gold—both stocks and the ETF. Gold is almost
as good a protection against banking problems as SKF—the UltraShort
Financials ETF—a security which may not be a suitable investment in
some portfolios.
5. We continue to believe that the Agricultural stocks are the pre-eminent
investment class of our time. Farm incomes are rising rapidly, and, in the
US, farms and farm land are the real estate assets that are rising in value
and are virtually immune to foreclosures. That means the leading Ag
companies have great pricing power and minimal credit problems. We
now hear suggestions that because food inflation has finally made it to
the cover of The Economist, it is time to start moving toward the exits. Not
so: We think that fine cover story could be the atonement—At Last!—for
the magazine’s famous 1999 cover: $5 Oil.
6. Remain overweight oil and gas producers, including the Alberta oil sands
producing companies. As disappointed as we are with the new royalty
schemes in that province, Alberta certainly remains more attractive than
Nigeria or Angola—and much more attractive than Russia, Kazakhstan,
or Venezuela.
7. We think it is time to begin accumulating the refiners that are equipped
to handle heavy high-sulfur crude. The collapse of the crack spread has
savaged refiners’ earnings, but that will eventually rebound. The Saudis
have virtually turned out the Light, and less and less of the oil that the
Gulf states will be lifting will be of the most desirable grades.
8. Retain the base metals stocks that have long-life unhedged reserves in
secure areas. Even if there is a global recession caused by global collapses
of subprime paper and LBO loans, it will not be deep enough to drive
base metal prices back to 2004 levels—but would be worrisome enough
to push further mine development even farther into the future.
9. When borrowing, borrow where possible in dollars. When investing, invest
where possible in other currencies.
10. Stagflation is a bad backdrop for bonds—and for non-commodity stocks.
The central bankers could have headed it off had Wall Street behaved
with a modicum of morality, but the Fed and its brethren are forced into
sustained reflation because of the global solvency crisis. Corporate earnings
for most sectors will not meet current optimistic Street forecasts, and rising
inflation will reduce the market’s P/E.
Don Coxe - Basic Points Recommendations
INVESTMENT RECOMMENDATIONS
1. Remain heavily underweight banks, particularly investment banks that
have displayed monumental stupidity. Do not assume that a change at the
top will automatically convert them into temples of wisdom, (unless it is
accompanied by demands for the departing to repay bonuses based on bets
that turned out disastrously). Better to assume that, like subprime-based
CDOs, there are layers of rot that can make the entire product dangerous
to your financial health.
2. Remain overweight Emerging Markets, emphasizing those that are oil, gas,
and/or food exporters.
3. Soaring food costs threaten stability for some Third World economies. We
have been ardently endorsing India since we returned from our leave of
absence a year ago. We are now more cautious, because a weak monsoon
could be politically and economically destabilizing at a time of $4 corn
and $10 wheat.
4. Remain heavily overweight gold—both stocks and the ETF. Gold is almost
as good a protection against banking problems as SKF—the UltraShort
Financials ETF—a security which may not be a suitable investment in
some portfolios.
5. We continue to believe that the Agricultural stocks are the pre-eminent
investment class of our time. Farm incomes are rising rapidly, and, in the
US, farms and farm land are the real estate assets that are rising in value
and are virtually immune to foreclosures. That means the leading Ag
companies have great pricing power and minimal credit problems. We
now hear suggestions that because food inflation has finally made it to
the cover of The Economist, it is time to start moving toward the exits. Not
so: We think that fine cover story could be the atonement—At Last!—for
the magazine’s famous 1999 cover: $5 Oil.
6. Remain overweight oil and gas producers, including the Alberta oil sands
producing companies. As disappointed as we are with the new royalty
schemes in that province, Alberta certainly remains more attractive than
Nigeria or Angola—and much more attractive than Russia, Kazakhstan,
or Venezuela.
7. We think it is time to begin accumulating the refiners that are equipped
to handle heavy high-sulfur crude. The collapse of the crack spread has
savaged refiners’ earnings, but that will eventually rebound. The Saudis
have virtually turned out the Light, and less and less of the oil that the
Gulf states will be lifting will be of the most desirable grades.
8. Retain the base metals stocks that have long-life unhedged reserves in
secure areas. Even if there is a global recession caused by global collapses
of subprime paper and LBO loans, it will not be deep enough to drive
base metal prices back to 2004 levels—but would be worrisome enough
to push further mine development even farther into the future.
9. When borrowing, borrow where possible in dollars. When investing, invest
where possible in other currencies.
10. Stagflation is a bad backdrop for bonds—and for non-commodity stocks.
The central bankers could have headed it off had Wall Street behaved
with a modicum of morality, but the Fed and its brethren are forced into
sustained reflation because of the global solvency crisis. Corporate earnings
for most sectors will not meet current optimistic Street forecasts, and rising
inflation will reduce the market’s P/E.
Don Coxe - Basic Points Recommendations
INVESTMENT RECOMMENDATIONS
1. Remain heavily underweight banks, particularly investment banks that
have displayed monumental stupidity. Do not assume that a change at the
top will automatically convert them into temples of wisdom, (unless it is
accompanied by demands for the departing to repay bonuses based on bets
that turned out disastrously). Better to assume that, like subprime-based
CDOs, there are layers of rot that can make the entire product dangerous
to your financial health.
2. Remain overweight Emerging Markets, emphasizing those that are oil, gas,
and/or food exporters.
3. Soaring food costs threaten stability for some Third World economies. We
have been ardently endorsing India since we returned from our leave of
absence a year ago. We are now more cautious, because a weak monsoon
could be politically and economically destabilizing at a time of $4 corn
and $10 wheat.
4. Remain heavily overweight gold—both stocks and the ETF. Gold is almost
as good a protection against banking problems as SKF—the UltraShort
Financials ETF—a security which may not be a suitable investment in
some portfolios.
5. We continue to believe that the Agricultural stocks are the pre-eminent
investment class of our time. Farm incomes are rising rapidly, and, in the
US, farms and farm land are the real estate assets that are rising in value
and are virtually immune to foreclosures. That means the leading Ag
companies have great pricing power and minimal credit problems. We
now hear suggestions that because food inflation has finally made it to
the cover of The Economist, it is time to start moving toward the exits. Not
so: We think that fine cover story could be the atonement—At Last!—for
the magazine’s famous 1999 cover: $5 Oil.
6. Remain overweight oil and gas producers, including the Alberta oil sands
producing companies. As disappointed as we are with the new royalty
schemes in that province, Alberta certainly remains more attractive than
Nigeria or Angola—and much more attractive than Russia, Kazakhstan,
or Venezuela.
7. We think it is time to begin accumulating the refiners that are equipped
to handle heavy high-sulfur crude. The collapse of the crack spread has
savaged refiners’ earnings, but that will eventually rebound. The Saudis
have virtually turned out the Light, and less and less of the oil that the
Gulf states will be lifting will be of the most desirable grades.
8. Retain the base metals stocks that have long-life unhedged reserves in
secure areas. Even if there is a global recession caused by global collapses
of subprime paper and LBO loans, it will not be deep enough to drive
base metal prices back to 2004 levels—but would be worrisome enough
to push further mine development even farther into the future.
9. When borrowing, borrow where possible in dollars. When investing, invest
where possible in other currencies.
10. Stagflation is a bad backdrop for bonds—and for non-commodity stocks.
The central bankers could have headed it off had Wall Street behaved
with a modicum of morality, but the Fed and its brethren are forced into
sustained reflation because of the global solvency crisis. Corporate earnings
for most sectors will not meet current optimistic Street forecasts, and rising
inflation will reduce the market’s P/E.
Bobwins POE -
Do you see the x.6 part of my calculation? That is where I took the 40% deduction for the partner, partner. So my starting number is off by 4,000bopd. I will knock that down and re-do it IF POE doesn't hit another gusher by the first week of January and then I don't need to. I also added the royalty in my 10$/bbl cost of production.
Hmmm, maybe a C+ or B-.
This fertilizer salesman would be happy with that on the first draft.
Kipp
Bobwins POE - How's about I just increase the average well production from 1,000 to 1,500bopd. That should cover it!
OK, seriously, I will go back to the drawing board and see if I can pass your watchful eye with at least a passing grade! Can I get extra points for effort?
Ahhhhrgggg!
Kipp
POE.V (POEFF) Zipcode Changing D.D.
POE.V (POEFF) Pan Oriental Energy
The stock is trading at CAD $12.73. I am going to build a case for a stock price after Q1 2008 of CAD $40.64/shr. I am also going to project a year end 2008 stock price of $CAD $106.40/shr
December 18, 2007 share price CAD: $12.73
Shares Outstanding: 40,134,842 Fully diluted: 45,589,992
Market Cap CAD: $510,916,531
Pan Oriental is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand and in Western Canada. Pan Oriental just reported their first profitable quarter ever in Q3 2007 at $.08/share. The production rate in October 2007 was reported to be 1500bopd. THE CURRENT PRODUCTION RATE IS 10,300bopd! This quantum jump is due to multiple “gusher” wells being completed and brought on line.
Most recent investor presentation:
http://www.panorient.ca/2007PPupdated-Oct-22.pdf
This presentation should be viewed in order to understand the size of the drilling concessions and the potential for further growth. Here are some highlights:
Canada Heavy Oil Assets (Sawn Lake)
• Interest held through a 53% ownership in Andora
• 240MM+ 3P Recoverable Reserves
• 2 well pair SAG-D pilot scheduled for Q3 2008
POE Operated Thailand Assets:
•3 Operated Concessions – 8,000 km2 (4,800 miles2)
•1,500 bopd net production (October 2007) & 4.469MM bbls 2P reserves
•2 rigs operating through 2007-2008
•1 3D seismic crew active
•Significant oil discovery under appraisal
•Aggressive Q42007/2008 exploration/appraisal drilling program
28 new wells are planned for drilling in 2008.
THESE 2 WELLS NEARLY DOUBLED PRODUCTION! Here is the recent announcement of the last wells drilled:
“L44H-D1 (60% WI & Operator)
Deviated well L44H-D1 is flowing at a sustained, stabilized rate of approximately 3,940 barrels per day of 35.5 degree API oil with a water cut of 0.05%. The well is free flowing through casing and tubing with restricted choke setting of 38/64" and 26/64" respectively. Flowing wellhead pressures on casing and tubing remain high at 280-285 psi. Load out of oil tankers from the well location is the determining factor in not taking production higher at this stage.
Pan Orient has been informed by the Thailand Department of Mineral Fuels that this is the highest flow rate ever achieved by any oil well drilled onshore Thailand.
L44H-D1 reached a total measured depth ("MD") of 1,217 meters, 866 meters true vertical depth ("TVD"), at a subsurface location approximately 700 meters north of the oil producing L44-H well location within the central fault compartment of the NSE field. The top of the main volcanic was penetrated at a depth of approximately 1,016 meters MD (755 meters TVD) with over 200 meters measured thickness (111 meters true thickness) of the target volcanic reservoir penetrated. The drill bit was still within the main target volcanic reservoir when the decision was made to call total depth on the well. L44H-D1 is the structurally highest volcanic reservoir penetration within the NSE field encountered to date. Total drilling fluid losses of 9,385 bbls at rates of 100 to 260 bbls/hr were observed while drilling through the main target. Wiper trips at 1,155 meters MD and 1,217 meters MD had resulted in oil to surface. This was the third well drilled into NSE's central fault compartment.
These test results at L44H-D1 confirm an oil column at Na Sanun East ("NSE") of a minimum of 150 meters.
Looking forward, the implications of this well on NSE field development are significant. L44H-D1 was a highly deviated well (approximately 51 degrees) at the time it intersected the top of the main volcanic objective. Based on these results, consideration is being given to full NSE field development utilizing up to 12 horizontal wells, the potential advantages being: 1) maximum reservoir thickness penetration 2) improved access to the extensive fracture network 3) less drawdown at higher rates, and 4) greater distance between the well bore and the oil/water contact, likely reducing the time to water breakthrough.
NS6-D1A Sidetrack (60% WI & Operator)
Sidetracked well, NS6-D1A is free flowing 35.5 API oil at a stabilized pre-cleanup rate of 615 bopd with choke setting of 18/64" on both casing and tubing. Flowing wellhead pressures are between 150 and 120 psi and water cut is approximately 0.05%.
NS6-D1A is located within the south fault compartment of the NSE structural closure approximately 400 meters north of the original POE-9 discovery well. The well penetrated approximately 23 meters of the main volcanic target with mud losses at rates of 20 bbl/hr. This was the fifth well drilled into NSE's southern fault compartment.
WICHIAN BURI-1 "DEEP" (60% WI & Operator)
The Aztec #14 rig is drilling ahead at a depth of 900 meters after setting 9 5/8" casing at 362 meters. Drilling is anticipated to take approximately 8 days to reach total depth.
WB-1 (Deep) is targeting an approximately 220 meter thick volcanic at a depth of 1,503 meters. This interval was penetrated by the original WB-1 well in 1988, resulting in severe lost circulation with approximately 20,000 bbls of drilling fluid losses that were associated with very high mud gas readings while drilling through the potential volcanic reservoir. Subsequent sidewall cores taken over this interval indicated oil staining. This deeper volcanic zone was never properly evaluated by the earlier operator as the shallower, conventional F sandstone reservoir tested oil at 500 bopd.
Outlook
Current field production capacity is now greater than 10,000 bopd gross (6,000 bopd net to Pan Orient) with average deliveries to the refinery of between 5,500-6,000 bopd gross (3,300-3,600 bopd net), limited by the capacity of the tanker fleet. Delivery is anticipated to increase to 7,000 bopd gross (4,200 bopd net) in late December 2007. The use of a new loading bay at the existing refinery has been negotiated, bringing the refinery capacity up to approximately 10,000 bopd gross. Upon approval of the NSE production license by the Thailand Department of Mineral Fuels, a second refinery contract is anticipated to be signed, bringing the total refinery unloading capacity to over 20,000 bopd gross.
Pan Orient Thailand management continue working on a number of options to reduce the trucking capacity choke point as quickly as possible. This is a short term issue caused by well deliverabilities far in excess of initial expectations.”
Here is my simple back of the envelope calculation.
Assumptions:
28 wells will be drilled in calendar 2008. I am reducing this number to 24 in case of dry holes/equipment problems. So figure 2 wells per month.
Each well will cost $1,000,000 to drill. (The company says the average cost has been $800,000 per well.)
I am using an average price of $80/bbl, again another WAG.
Once the wells are completed I am subtracting $10/bbl for lifting, transportation and royalty costs.
$80 - $10 = $70 net selling price for the oil per barrel.
I am figuring a production rate of 1,000bopd for each new well. This is the big WAG…..the big well to date was 3,900bopd, the small ones are around 600bopd. POE seems to be getting better and better results as they tweak each new well based on knowledge gained from previous wells. They also have their own 3D seismic crew working round the clock. I feel 1,000 may be too conservative, if so we will be pleasantly surprised. The 1,000bopd will also take care of depletion of existing wells.
2 wells per month @ 100bopd = 2,000bopd additional production.
I am using an exit rate for 2007 of 10,000bopd and ramping up the 2008 projection from there.
*POE HAS A PARTNER THAT GETS 40% OF THE NET. I am going to make this adjustment in the calculations below.
Here is what the 12 months revenues looks like:
M1–12k bopd x $70 = $910,000 x .6 = $504,000 net POE x 30= $15,120,000
M2–14k bopd x $70 = $980,000 x .6 = $588,000 net POE x 30= $17,640,000
M3–16k bopd x $70 = $1,120,000 x .6 = $672,000 net POE x 30= $20,160,000
Q1 - $52,920,000 / 45,500,000shrs = $1.16/shr x 4 = $4.64 x 10P/E = $40.64
M4–18k bopd x $70 = $1,260,000 x .6 = $756,000 net POE x 30 = $22,680,000
M5–20k bopd x $70 = $1,400,000 x .6 = $840,000 net POE x 30 = $25,200,000
M6–22k bopd x $70 = $1,540,000 x .6 = $924,000 net POE x 30 = $27,720,000
Q2- $75,600,000 / 45,500,000shrs = $1.66/shr x 4 = $6.64 x 10P/E = $66.40
M7–24k bopd x $70 = $1,680,000 x .6 = $1,008,000 net POE x 30 = $30,240,000
M8–26k bopd x $70 = $1,820,000 x .6 = $1,092,000 net POE x 30 =$32,760,000
M9–28k bopd x $70 = $1,960,000 x .6 = $1,176,000 net POE x 30=$35,280,000
Q3- $98,280,000 / 45,500,000shrs = $2.16/shr x 4 = $8.64 x 10P/E = $86.40
M10–30k bopd x $70 = $2,100,000 x .6 = $1,260,000 net POE x 30 = $37,800,000
M11–32k bopd x $70 = $2,240,000 x .6 = $1,344,000 net POE x 30 = $40,320,000
M12–34k bopd x $70 = $2,380,000 x .6 = $1,428,000 net POE x 30 = $42,840,000
Q4- $120,960,000 / 45,500,000shrs = $2.66/shr x 4 = $10.64 x 10P/E = $106.40
***NO PROVISION FOR TAXES WERE MADE.
I expect a stock split and a move from the TSX Venture to the Toronto big board during 2008. This stock is still under the radar and will steadily move higher as the new wells are put in production. A limiting factor may be getting the oil to the refinery AND getting it refined.
I will update these estimates after each quarter is reported.
Kipp
POE.V POEFF D.D.
POE.V (POEFF) Pan Oriental Energy
The stock is trading at CAD $12.73. I am going to build a case for a stock price after Q1 2008 of CAD $40.64/shr. I am also going to project a year end 2008 stock price of $CAD $106.40/shr
December 18, 2007 share price CAD: $12.73
Shares Outstanding: 40,134,842 Fully diluted: 45,589,992
Market Cap CAD: $510,916,531
Pan Oriental is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand and in Western Canada. Pan Oriental just reported their first profitable quarter ever in Q3 2007 at $.08/share. The production rate in October 2007 was reported to be 1500bopd. THE CURRENT PRODUCTION RATE IS 10,300bopd! This quantum jump is due to multiple “gusher” wells being completed and brought on line.
Most recent investor presentation:
http://www.panorient.ca/2007PPupdated-Oct-22.pdf
This presentation should be viewed in order to understand the size of the drilling concessions and the potential for further growth. Here are some highlights:
Canada Heavy Oil Assets (Sawn Lake)
• Interest held through a 53% ownership in Andora
• 240MM+ 3P Recoverable Reserves
• 2 well pair SAG-D pilot scheduled for Q3 2008
POE Operated Thailand Assets:
•3 Operated Concessions – 8,000 km2 (4,800 miles2)
•1,500 bopd net production (October 2007) & 4.469MM bbls 2P reserves
•2 rigs operating through 2007-2008
•1 3D seismic crew active
•Significant oil discovery under appraisal
•Aggressive Q42007/2008 exploration/appraisal drilling program
28 new wells are planned for drilling in 2008.
THESE 2 WELLS NEARLY DOUBLED PRODUCTION! Here is the recent announcement of the last wells drilled:
“L44H-D1 (60% WI & Operator)
Deviated well L44H-D1 is flowing at a sustained, stabilized rate of approximately 3,940 barrels per day of 35.5 degree API oil with a water cut of 0.05%. The well is free flowing through casing and tubing with restricted choke setting of 38/64" and 26/64" respectively. Flowing wellhead pressures on casing and tubing remain high at 280-285 psi. Load out of oil tankers from the well location is the determining factor in not taking production higher at this stage.
Pan Orient has been informed by the Thailand Department of Mineral Fuels that this is the highest flow rate ever achieved by any oil well drilled onshore Thailand.
L44H-D1 reached a total measured depth ("MD") of 1,217 meters, 866 meters true vertical depth ("TVD"), at a subsurface location approximately 700 meters north of the oil producing L44-H well location within the central fault compartment of the NSE field. The top of the main volcanic was penetrated at a depth of approximately 1,016 meters MD (755 meters TVD) with over 200 meters measured thickness (111 meters true thickness) of the target volcanic reservoir penetrated. The drill bit was still within the main target volcanic reservoir when the decision was made to call total depth on the well. L44H-D1 is the structurally highest volcanic reservoir penetration within the NSE field encountered to date. Total drilling fluid losses of 9,385 bbls at rates of 100 to 260 bbls/hr were observed while drilling through the main target. Wiper trips at 1,155 meters MD and 1,217 meters MD had resulted in oil to surface. This was the third well drilled into NSE's central fault compartment.
These test results at L44H-D1 confirm an oil column at Na Sanun East ("NSE") of a minimum of 150 meters.
Looking forward, the implications of this well on NSE field development are significant. L44H-D1 was a highly deviated well (approximately 51 degrees) at the time it intersected the top of the main volcanic objective. Based on these results, consideration is being given to full NSE field development utilizing up to 12 horizontal wells, the potential advantages being: 1) maximum reservoir thickness penetration 2) improved access to the extensive fracture network 3) less drawdown at higher rates, and 4) greater distance between the well bore and the oil/water contact, likely reducing the time to water breakthrough.
NS6-D1A Sidetrack (60% WI & Operator)
Sidetracked well, NS6-D1A is free flowing 35.5 API oil at a stabilized pre-cleanup rate of 615 bopd with choke setting of 18/64" on both casing and tubing. Flowing wellhead pressures are between 150 and 120 psi and water cut is approximately 0.05%.
NS6-D1A is located within the south fault compartment of the NSE structural closure approximately 400 meters north of the original POE-9 discovery well. The well penetrated approximately 23 meters of the main volcanic target with mud losses at rates of 20 bbl/hr. This was the fifth well drilled into NSE's southern fault compartment.
WICHIAN BURI-1 "DEEP" (60% WI & Operator)
The Aztec #14 rig is drilling ahead at a depth of 900 meters after setting 9 5/8" casing at 362 meters. Drilling is anticipated to take approximately 8 days to reach total depth.
WB-1 (Deep) is targeting an approximately 220 meter thick volcanic at a depth of 1,503 meters. This interval was penetrated by the original WB-1 well in 1988, resulting in severe lost circulation with approximately 20,000 bbls of drilling fluid losses that were associated with very high mud gas readings while drilling through the potential volcanic reservoir. Subsequent sidewall cores taken over this interval indicated oil staining. This deeper volcanic zone was never properly evaluated by the earlier operator as the shallower, conventional F sandstone reservoir tested oil at 500 bopd.
Outlook
Current field production capacity is now greater than 10,000 bopd gross (6,000 bopd net to Pan Orient) with average deliveries to the refinery of between 5,500-6,000 bopd gross (3,300-3,600 bopd net), limited by the capacity of the tanker fleet. Delivery is anticipated to increase to 7,000 bopd gross (4,200 bopd net) in late December 2007. The use of a new loading bay at the existing refinery has been negotiated, bringing the refinery capacity up to approximately 10,000 bopd gross. Upon approval of the NSE production license by the Thailand Department of Mineral Fuels, a second refinery contract is anticipated to be signed, bringing the total refinery unloading capacity to over 20,000 bopd gross.
Pan Orient Thailand management continue working on a number of options to reduce the trucking capacity choke point as quickly as possible. This is a short term issue caused by well deliverabilities far in excess of initial expectations.”
Here is my simple back of the envelope calculation.
Assumptions:
28 wells will be drilled in calendar 2008. I am reducing this number to 24 in case of dry holes/equipment problems. So figure 2 wells per month.
Each well will cost $1,000,000 to drill. (The company says the average cost has been $800,000 per well.)
I am using an average price of $80/bbl, again another WAG.
Once the wells are completed I am subtracting $10/bbl for lifting, transportation and royalty costs.
$80 - $10 = $70 net selling price for the oil per barrel.
I am figuring a production rate of 1,000bopd for each new well. This is the big WAG…..the big well to date was 3,900bopd, the small ones are around 600bopd. POE seems to be getting better and better results as they tweak each new well based on knowledge gained from previous wells. They also have their own 3D seismic crew working round the clock. I feel 1,000 may be too conservative, if so we will be pleasantly surprised. The 1,000bopd will also take care of depletion of existing wells.
2 wells per month @ 100bopd = 2,000bopd additional production.
I am using an exit rate for 2007 of 10,000bopd and ramping up the 2008 projection from there.
*POE HAS A PARTNER THAT GETS 40% OF THE NET. I am going to make this adjustment in the calculations below.
Here is what the 12 months revenues looks like:
M1–12k bopd x $70 = $910,000 x .6 = $504,000 net POE x 30= $15,120,000
M2–14k bopd x $70 = $980,000 x .6 = $588,000 net POE x 30= $17,640,000
M3–16k bopd x $70 = $1,120,000 x .6 = $672,000 net POE x 30= $20,160,000
Q1 - $52,920,000 / 45,500,000shrs = $1.16/shr x 4 = $4.64 x 10P/E = $40.64
M4–18k bopd x $70 = $1,260,000 x .6 = $756,000 net POE x 30 = $22,680,000
M5–20k bopd x $70 = $1,400,000 x .6 = $840,000 net POE x 30 = $25,200,000
M6–22k bopd x $70 = $1,540,000 x .6 = $924,000 net POE x 30 = $27,720,000
Q2- $75,600,000 / 45,500,000shrs = $1.66/shr x 4 = $6.64 x 10P/E = $66.40
M7–24k bopd x $70 = $1,680,000 x .6 = $1,008,000 net POE x 30 = $30,240,000
M8–26k bopd x $70 = $1,820,000 x .6 = $1,092,000 net POE x 30 =$32,760,000
M9–28k bopd x $70 = $1,960,000 x .6 = $1,176,000 net POE x 30=$35,280,000
Q3- $98,280,000 / 45,500,000shrs = $2.16/shr x 4 = $8.64 x 10P/E = $86.40
M10–30k bopd x $70 = $2,100,000 x .6 = $1,260,000 net POE x 30 = $37,800,000
M11–32k bopd x $70 = $2,240,000 x .6 = $1,344,000 net POE x 30 = $40,320,000
M12–34k bopd x $70 = $2,380,000 x .6 = $1,428,000 net POE x 30 = $42,840,000
Q4- $120,960,000 / 45,500,000shrs = $2.66/shr x 4 = $10.64 x 10P/E = $106.40
***NO PROVISION FOR TAXES WERE MADE.
I expect a stock split and a move from the TSX Venture to the Toronto big board during 2008. This stock is still under the radar and will steadily move higher as the new wells are put in production. A limiting factor may be getting the oil to the refinery AND getting it refined.
I will update these estimates after each quarter is reported.
Kipp
POE.V POEFF Table Pounder D.D.
POE.V (POEFF) Pan Oriental Energy
The stock is trading at CAD $12.73. I am going to build a case for a stock price after Q1 2008 of CAD $40.64/shr. I am also going to project a year end 2008 stock price of $CAD $106.40/shr
December 18, 2007 share price CAD: $12.73
Shares Outstanding: 40,134,842 Fully diluted: 45,589,992
Market Cap CAD: $510,916,531
Pan Oriental is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand and in Western Canada. Pan Oriental just reported their first profitable quarter ever in Q3 2007 at $.08/share. The production rate in October 2007 was reported to be 1500bopd. THE CURRENT PRODUCTION RATE IS 10,300bopd! This quantum jump is due to multiple “gusher” wells being completed and brought on line.
Most recent investor presentation:
http://www.panorient.ca/2007PPupdated-Oct-22.pdf
This presentation should be viewed in order to understand the size of the drilling concessions and the potential for further growth. Here are some highlights:
Canada Heavy Oil Assets (Sawn Lake)
• Interest held through a 53% ownership in Andora
• 240MM+ 3P Recoverable Reserves
• 2 well pair SAG-D pilot scheduled for Q3 2008
POE Operated Thailand Assets:
•3 Operated Concessions – 8,000 km2 (4,800 miles2)
•1,500 bopd net production (October 2007) & 4.469MM bbls 2P reserves
•2 rigs operating through 2007-2008
•1 3D seismic crew active
•Significant oil discovery under appraisal
•Aggressive Q42007/2008 exploration/appraisal drilling program
28 new wells are planned for drilling in 2008.
THESE 2 WELLS NEARLY DOUBLED PRODUCTION! Here is the recent announcement of the last wells drilled:
“L44H-D1 (60% WI & Operator)
Deviated well L44H-D1 is flowing at a sustained, stabilized rate of approximately 3,940 barrels per day of 35.5 degree API oil with a water cut of 0.05%. The well is free flowing through casing and tubing with restricted choke setting of 38/64" and 26/64" respectively. Flowing wellhead pressures on casing and tubing remain high at 280-285 psi. Load out of oil tankers from the well location is the determining factor in not taking production higher at this stage.
Pan Orient has been informed by the Thailand Department of Mineral Fuels that this is the highest flow rate ever achieved by any oil well drilled onshore Thailand.
L44H-D1 reached a total measured depth ("MD") of 1,217 meters, 866 meters true vertical depth ("TVD"), at a subsurface location approximately 700 meters north of the oil producing L44-H well location within the central fault compartment of the NSE field. The top of the main volcanic was penetrated at a depth of approximately 1,016 meters MD (755 meters TVD) with over 200 meters measured thickness (111 meters true thickness) of the target volcanic reservoir penetrated. The drill bit was still within the main target volcanic reservoir when the decision was made to call total depth on the well. L44H-D1 is the structurally highest volcanic reservoir penetration within the NSE field encountered to date. Total drilling fluid losses of 9,385 bbls at rates of 100 to 260 bbls/hr were observed while drilling through the main target. Wiper trips at 1,155 meters MD and 1,217 meters MD had resulted in oil to surface. This was the third well drilled into NSE's central fault compartment.
These test results at L44H-D1 confirm an oil column at Na Sanun East ("NSE") of a minimum of 150 meters.
Looking forward, the implications of this well on NSE field development are significant. L44H-D1 was a highly deviated well (approximately 51 degrees) at the time it intersected the top of the main volcanic objective. Based on these results, consideration is being given to full NSE field development utilizing up to 12 horizontal wells, the potential advantages being: 1) maximum reservoir thickness penetration 2) improved access to the extensive fracture network 3) less drawdown at higher rates, and 4) greater distance between the well bore and the oil/water contact, likely reducing the time to water breakthrough.
NS6-D1A Sidetrack (60% WI & Operator)
Sidetracked well, NS6-D1A is free flowing 35.5 API oil at a stabilized pre-cleanup rate of 615 bopd with choke setting of 18/64" on both casing and tubing. Flowing wellhead pressures are between 150 and 120 psi and water cut is approximately 0.05%.
NS6-D1A is located within the south fault compartment of the NSE structural closure approximately 400 meters north of the original POE-9 discovery well. The well penetrated approximately 23 meters of the main volcanic target with mud losses at rates of 20 bbl/hr. This was the fifth well drilled into NSE's southern fault compartment.
WICHIAN BURI-1 "DEEP" (60% WI & Operator)
The Aztec #14 rig is drilling ahead at a depth of 900 meters after setting 9 5/8" casing at 362 meters. Drilling is anticipated to take approximately 8 days to reach total depth.
WB-1 (Deep) is targeting an approximately 220 meter thick volcanic at a depth of 1,503 meters. This interval was penetrated by the original WB-1 well in 1988, resulting in severe lost circulation with approximately 20,000 bbls of drilling fluid losses that were associated with very high mud gas readings while drilling through the potential volcanic reservoir. Subsequent sidewall cores taken over this interval indicated oil staining. This deeper volcanic zone was never properly evaluated by the earlier operator as the shallower, conventional F sandstone reservoir tested oil at 500 bopd.
Outlook
Current field production capacity is now greater than 10,000 bopd gross (6,000 bopd net to Pan Orient) with average deliveries to the refinery of between 5,500-6,000 bopd gross (3,300-3,600 bopd net), limited by the capacity of the tanker fleet. Delivery is anticipated to increase to 7,000 bopd gross (4,200 bopd net) in late December 2007. The use of a new loading bay at the existing refinery has been negotiated, bringing the refinery capacity up to approximately 10,000 bopd gross. Upon approval of the NSE production license by the Thailand Department of Mineral Fuels, a second refinery contract is anticipated to be signed, bringing the total refinery unloading capacity to over 20,000 bopd gross.
Pan Orient Thailand management continue working on a number of options to reduce the trucking capacity choke point as quickly as possible. This is a short term issue caused by well deliverabilities far in excess of initial expectations.”
Here is my simple back of the envelope calculation.
Assumptions:
28 wells will be drilled in calendar 2008. I am reducing this number to 24 in case of dry holes/equipment problems. So figure 2 wells per month.
Each well will cost $1,000,000 to drill. (The company says the average cost has been $800,000 per well.)
I am using an average price of $80/bbl, again another WAG.
Once the wells are completed I am subtracting $10/bbl for lifting, transportation and royalty costs.
$80 - $10 = $70 net selling price for the oil per barrel.
I am figuring a production rate of 1,000bopd for each new well. This is the big WAG…..the big well to date was 3,900bopd, the small ones are around 600bopd. POE seems to be getting better and better results as they tweak each new well based on knowledge gained from previous wells. They also have their own 3D seismic crew working round the clock. I feel 1,000 may be too conservative, if so we will be pleasantly surprised. The 1,000bopd will also take care of depletion of existing wells.
2 wells per month @ 100bopd = 2,000bopd additional production.
I am using an exit rate for 2007 of 10,000bopd and ramping up the 2008 projection from there.
*POE HAS A PARTNER THAT GETS 40% OF THE NET. I am going to make this adjustment in the calculations below.
Here is what the 12 months revenues looks like:
M1–12k bopd x $70 = $910,000 x .6 = $504,000 net POE x 30= $15,120,000
M2–14k bopd x $70 = $980,000 x .6 = $588,000 net POE x 30= $17,640,000
M3–16k bopd x $70 = $1,120,000 x .6 = $672,000 net POE x 30= $20,160,000
Q1 - $52,920,000 / 45,500,000shrs = $1.16/shr x 4 = $4.64 x 10P/E = $40.64
M4–18k bopd x $70 = $1,260,000 x .6 = $756,000 net POE x 30 = $22,680,000
M5–20k bopd x $70 = $1,400,000 x .6 = $840,000 net POE x 30 = $25,200,000
M6–22k bopd x $70 = $1,540,000 x .6 = $924,000 net POE x 30 = $27,720,000
Q2- $75,600,000 / 45,500,000shrs = $1.66/shr x 4 = $6.64 x 10P/E = $66.40
M7–24k bopd x $70 = $1,680,000 x .6 = $1,008,000 net POE x 30 = $30,240,000
M8–26k bopd x $70 = $1,820,000 x .6 = $1,092,000 net POE x 30 =$32,760,000
M9–28k bopd x $70 = $1,960,000 x .6 = $1,176,000 net POE x 30=$35,280,000
Q3- $98,280,000 / 45,500,000shrs = $2.16/shr x 4 = $8.64 x 10P/E = $86.40
M10–30k bopd x $70 = $2,100,000 x .6 = $1,260,000 net POE x 30 = $37,800,000
M11–32k bopd x $70 = $2,240,000 x .6 = $1,344,000 net POE x 30 = $40,320,000
M12–34k bopd x $70 = $2,380,000 x .6 = $1,428,000 net POE x 30 = $42,840,000
Q4- $120,960,000 / 45,500,000shrs = $2.66/shr x 4 = $10.64 x 10P/E = $106.40
***NO PROVISION FOR TAXES WERE MADE.
I expect a stock split and a move from the TSX Venture to the Toronto big board during 2008. This stock is still under the radar and will steadily move higher as the new wells are put in production. A limiting factor may be getting the oil to the refinery AND getting it refined.
I will update these estimates after each quarter is reported.
Kipp
POE.V POEFF D.D.
POE.V (POEFF) Pan Oriental Energy
The stock is trading at CAD $12.73. I am going to build a case for a stock price after Q1 2008 of CAD $40.64/shr. I am also going to project a year end 2008 stock price of $CAD $106.40/shr
December 18, 2007 share price CAD: $12.73
Shares Outstanding: 40,134,842 Fully diluted: 45,589,992
Market Cap CAD: $510,916,531
Pan Oriental is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand and in Western Canada. Pan Oriental just reported their first profitable quarter ever in Q3 2007 at $.08/share. The production rate in October 2007 was reported to be 1500bopd. THE CURRENT PRODUCTION RATE IS 10,300bopd! This quantum jump is due to multiple “gusher” wells being completed and brought on line.
Most recent investor presentation:
http://www.panorient.ca/2007PPupdated-Oct-22.pdf
This presentation should be viewed in order to understand the size of the drilling concessions and the potential for further growth. Here are some highlights:
Canada Heavy Oil Assets (Sawn Lake)
• Interest held through a 53% ownership in Andora
• 240MM+ 3P Recoverable Reserves
• 2 well pair SAG-D pilot scheduled for Q3 2008
POE Operated Thailand Assets:
•3 Operated Concessions – 8,000 km2 (4,800 miles2)
•1,500 bopd net production (October 2007) & 4.469MM bbls 2P reserves
•2 rigs operating through 2007-2008
•1 3D seismic crew active
•Significant oil discovery under appraisal
•Aggressive Q42007/2008 exploration/appraisal drilling program
28 new wells are planned for drilling in 2008.
THESE 2 WELLS NEARLY DOUBLED PRODUCTION! Here is the recent announcement of the last wells drilled:
“L44H-D1 (60% WI & Operator)
Deviated well L44H-D1 is flowing at a sustained, stabilized rate of approximately 3,940 barrels per day of 35.5 degree API oil with a water cut of 0.05%. The well is free flowing through casing and tubing with restricted choke setting of 38/64" and 26/64" respectively. Flowing wellhead pressures on casing and tubing remain high at 280-285 psi. Load out of oil tankers from the well location is the determining factor in not taking production higher at this stage.
Pan Orient has been informed by the Thailand Department of Mineral Fuels that this is the highest flow rate ever achieved by any oil well drilled onshore Thailand.
L44H-D1 reached a total measured depth ("MD") of 1,217 meters, 866 meters true vertical depth ("TVD"), at a subsurface location approximately 700 meters north of the oil producing L44-H well location within the central fault compartment of the NSE field. The top of the main volcanic was penetrated at a depth of approximately 1,016 meters MD (755 meters TVD) with over 200 meters measured thickness (111 meters true thickness) of the target volcanic reservoir penetrated. The drill bit was still within the main target volcanic reservoir when the decision was made to call total depth on the well. L44H-D1 is the structurally highest volcanic reservoir penetration within the NSE field encountered to date. Total drilling fluid losses of 9,385 bbls at rates of 100 to 260 bbls/hr were observed while drilling through the main target. Wiper trips at 1,155 meters MD and 1,217 meters MD had resulted in oil to surface. This was the third well drilled into NSE's central fault compartment.
These test results at L44H-D1 confirm an oil column at Na Sanun East ("NSE") of a minimum of 150 meters.
Looking forward, the implications of this well on NSE field development are significant. L44H-D1 was a highly deviated well (approximately 51 degrees) at the time it intersected the top of the main volcanic objective. Based on these results, consideration is being given to full NSE field development utilizing up to 12 horizontal wells, the potential advantages being: 1) maximum reservoir thickness penetration 2) improved access to the extensive fracture network 3) less drawdown at higher rates, and 4) greater distance between the well bore and the oil/water contact, likely reducing the time to water breakthrough.
NS6-D1A Sidetrack (60% WI & Operator)
Sidetracked well, NS6-D1A is free flowing 35.5 API oil at a stabilized pre-cleanup rate of 615 bopd with choke setting of 18/64" on both casing and tubing. Flowing wellhead pressures are between 150 and 120 psi and water cut is approximately 0.05%.
NS6-D1A is located within the south fault compartment of the NSE structural closure approximately 400 meters north of the original POE-9 discovery well. The well penetrated approximately 23 meters of the main volcanic target with mud losses at rates of 20 bbl/hr. This was the fifth well drilled into NSE's southern fault compartment.
WICHIAN BURI-1 "DEEP" (60% WI & Operator)
The Aztec #14 rig is drilling ahead at a depth of 900 meters after setting 9 5/8" casing at 362 meters. Drilling is anticipated to take approximately 8 days to reach total depth.
WB-1 (Deep) is targeting an approximately 220 meter thick volcanic at a depth of 1,503 meters. This interval was penetrated by the original WB-1 well in 1988, resulting in severe lost circulation with approximately 20,000 bbls of drilling fluid losses that were associated with very high mud gas readings while drilling through the potential volcanic reservoir. Subsequent sidewall cores taken over this interval indicated oil staining. This deeper volcanic zone was never properly evaluated by the earlier operator as the shallower, conventional F sandstone reservoir tested oil at 500 bopd.
Outlook
Current field production capacity is now greater than 10,000 bopd gross (6,000 bopd net to Pan Orient) with average deliveries to the refinery of between 5,500-6,000 bopd gross (3,300-3,600 bopd net), limited by the capacity of the tanker fleet. Delivery is anticipated to increase to 7,000 bopd gross (4,200 bopd net) in late December 2007. The use of a new loading bay at the existing refinery has been negotiated, bringing the refinery capacity up to approximately 10,000 bopd gross. Upon approval of the NSE production license by the Thailand Department of Mineral Fuels, a second refinery contract is anticipated to be signed, bringing the total refinery unloading capacity to over 20,000 bopd gross.
Pan Orient Thailand management continue working on a number of options to reduce the trucking capacity choke point as quickly as possible. This is a short term issue caused by well deliverabilities far in excess of initial expectations.”
Here is my simple back of the envelope calculation.
Assumptions:
28 wells will be drilled in calendar 2008. I am reducing this number to 24 in case of dry holes/equipment problems. So figure 2 wells per month.
Each well will cost $1,000,000 to drill. (The company says the average cost has been $800,000 per well.)
I am using an average price of $80/bbl, again another WAG.
Once the wells are completed I am subtracting $10/bbl for lifting, transportation and royalty costs.
$80 - $10 = $70 net selling price for the oil per barrel.
I am figuring a production rate of 1,000bopd for each new well. This is the big WAG…..the big well to date was 3,900bopd, the small ones are around 600bopd. POE seems to be getting better and better results as they tweak each new well based on knowledge gained from previous wells. They also have their own 3D seismic crew working round the clock. I feel 1,000 may be too conservative, if so we will be pleasantly surprised. The 1,000bopd will also take care of depletion of existing wells.
2 wells per month @ 100bopd = 2,000bopd additional production.
I am using an exit rate for 2007 of 10,000bopd and ramping up the 2008 projection from there.
*POE HAS A PARTNER THAT GETS 40% OF THE NET. I am going to make this adjustment in the calculations below.
Here is what the 12 months revenues looks like:
M1–12k bopd x $70 = $910,000 x .6 = $504,000 net POE x 30= $15,120,000
M2–14k bopd x $70 = $980,000 x .6 = $588,000 net POE x 30= $17,640,000
M3–16k bopd x $70 = $1,120,000 x .6 = $672,000 net POE x 30= $20,160,000
Q1 - $52,920,000 / 45,500,000shrs = $1.16/shr x 4 = $4.64 x 10P/E = $40.64
M4–18k bopd x $70 = $1,260,000 x .6 = $756,000 net POE x 30 = $22,680,000
M5–20k bopd x $70 = $1,400,000 x .6 = $840,000 net POE x 30 = $25,200,000
M6–22k bopd x $70 = $1,540,000 x .6 = $924,000 net POE x 30 = $27,720,000
Q2- $75,600,000 / 45,500,000shrs = $1.66/shr x 4 = $6.64 x 10P/E = $66.40
M7–24k bopd x $70 = $1,680,000 x .6 = $1,008,000 net POE x 30 = $30,240,000
M8–26k bopd x $70 = $1,820,000 x .6 = $1,092,000 net POE x 30 =$32,760,000
M9–28k bopd x $70 = $1,960,000 x .6 = $1,176,000 net POE x 30=$35,280,000
Q3- $98,280,000 / 45,500,000shrs = $2.16/shr x 4 = $8.64 x 10P/E = $86.40
M10–30k bopd x $70 = $2,100,000 x .6 = $1,260,000 net POE x 30 = $37,800,000
M11–32k bopd x $70 = $2,240,000 x .6 = $1,344,000 net POE x 30 = $40,320,000
M12–34k bopd x $70 = $2,380,000 x .6 = $1,428,000 net POE x 30 = $42,840,000
Q4- $120,960,000 / 45,500,000shrs = $2.66/shr x 4 = $10.64 x 10P/E = $106.40
***NO PROVISION FOR TAXES WERE MADE.
I expect a stock split and a move from the TSX Venture to the Toronto big board during 2008. This stock is still under the radar and will steadily move higher as the new wells are put in production. A limiting factor may be getting the oil to the refinery AND getting it refined.
I will update these estimates after each quarter is reported.
Kipp
kozuh - Do us all a favor and PM your crap. It does nothing to promote the spirit of this board. If you have nothing decent to post please post nothing at all.
I think it is time that the moderators delete these types of posts.
Happy Holidays.
Kipp
Basic Points is late. Don Coxe must be getting in the holiday mode or getting ready to skewer the market??? Anyway, a lot of you guys on my distribution list have been asking and I will get it out when it shows up.
Kipp
EXN.V not going to escape tax loss selling. I have a bunch around $1.40. I need to remember Canadian's hate to pay taxes more than Americans, the selling in Canadian Jr's has bordered insanity in my opinion. I don't look for a P.P> in EXN until they recover from these levels, but I do expect one to finance the new mill. Mold is getting thicker!
Kipp
TXCO update - You have to open the link to see the table, I took it out of the previous post because it was unreadable:
http://biz.yahoo.com/bw/071219/20071219005741.html?.v=1&printer=1
TXCO is my second oil/gas pick behind POE. Here is capex and operational update:
http://biz.yahoo.com/bw/071219/20071219005741.html?.v=1&printer=1
TXCO Resources Announces Record 2008 CAPEX, Updates Current Operations
Wednesday December 19, 11:33 am ET
SAN ANTONIO--(BUSINESS WIRE)--TXCO Resources Inc. (Nasdaq:TXCO - News) today announced its board of directors has approved a record capital expenditure budget and drilling program for 2008. It also provided an update on current activity.
CAPEX
The Company’s initial CAPEX for next year has been set in a range of $100 million to $110 million, including 97 scheduled wells. TXCO expects to fund its capital program through proceeds from a recent private placement of preferred stock, internal cash flow and an existing bank credit facility. The budget may be revised, based on drilling plan changes by partners, rig availability, drilling results, operational developments, unanticipated transaction opportunities, market conditions or commodity price fluctuations.
The Glen Rose formation, including the Maverick Basin’s prolific Porosity oil play (50-100 percent working interest) will continue to receive the largest share of the budget – $40.7 million for 35 wells, including 10 re-entries. In the East Texas Fort Trinidad Field, $12.5 million has been set aside for 10 wells targeting TXCO’s new Glen Rose B shoal gas play (50% WI).
In the Maverick Basin, $10.0 million has been allocated for TXCO’s 50 percent share of expenses for drilling and steam generation equipment in the San Miguel tar sand project. Also, the CAPEX has $7.0 million for two wells targeting the Pearsall shale gas resource play (100% WI) and $1.3 million for a Jurassic well (25% WI). Some $10.0 million will go to expansion of the Pena Creek San Miguel waterflood.
In the Midcontinent (10-22% WI), the initial CAPEX includes $7.4 million for four wells in Oklahoma’s Anadarko Basin. In the West Texas Marfa Basin (50% WI), prospective for the Barnett and Woodford shales, the Company has allocated $1.5 million for exploration and development work.
Management Perspective
“TXCO begins 2008 with more potential than ever to appreciably increase production and reserves,” said CEO James E. Sigmon. “We will continue ramping up our CAPEX next year as we pursue the Company’s multiple growth opportunities, including the San Miguel tar sand, Pearsall resource play and Fort Trinidad shoals – while waiting for Schlumberger’s report before expanding our successful Glen Rose Porosity oil play. Coupled with our strong balance sheet, high oil price realizations and excellent cash flow, I believe 2008 will see an acceleration in our shareholder value growth.”
Current Operations
Through early December, TXCO had spudded or re-entered 85 wells this year, including eight wells currently drilling. In the Maverick Basin’s Pearsall gas play, the Glass Ranch B 1-77 (100% WI) has been initially completed vertically and is expected to go on production before year end. In its latest tests, the well flowed at a rate of 2,000 mcfd at 6,000 psi flowing tubing pressure for four days prior to being shut in pending construction of an 8.5-mile pipeline to produce the well. The Glass well is the first by TXCO to the Pearsall in the southern portion of the Maverick Basin.
Targeting the same formation, TXCO has completed drilling its first horizontal Pearsall well, the Cage 26-2H (50% WI), having placed five open-hole packers at various intervals in the lateral in preparation to fracture-stimulate the interval by the end of January 2008. Meanwhile, the Burr Estate 1-68ST1 (100% WI) was successfully re-entered horizontally in the Pearsall and is awaiting a fracture-stimulation completion.
In the tar sand pilot, the Company has successfully completed its initial, two-well cyclic steam pilot phase, having mobilized the oil and established a favorable WTI price differential from area refiners. Based on continuing reservoir simulation studies, TXCO has decided to convert this pilot to a Steam-Assisted Gravity Drainage (SAGD) process by the addition of two horizontal wells. TXCO currently is drilling the new horizontal wells with its recently purchased shallow drilling rig. The SAGD technique is used extensively in the Athabasca tar sands in Canada. This marks the first time that a SAGD pilot will be applied to the San Miguel tar sands.
The SAGD well pair is being drilled in between the existing cyclic steam wells, which will be converted to temperature-monitoring wells. Existing steam generation capacity will be doubled by the addition of a second 25 mmBtu steam generator, expected to be delivered in January.
TXCO also will utilize its new drilling rig to establish a second pilot during the first half of 2008, featuring 8-16 new horizontal/vertical wells utilizing modified Fracture-Assisted Steamflood Technology (FAST), a technique proven by Conoco in years past. The wells will be drilled on a schedule consistent with expected deliveries of two new 50 mmBtu steam generators in April and May 2008.
In the East Texas Fort Trinidad Field, intermediate casing has been set in the vertical portion of the Forrest 2H (50% WI), the first horizontal well to be drilled into the Glen Rose B shoal. TXCO expects to begin drilling the horizontal portion of the well within the next few days. The Company has identified 40 prospective locations in the B shoal, one of five gas-charged shoals located in the field, where it has 8,300 net acres under lease.
TXCO’s net Glen Rose Porosity oil sales early in the fourth quarter were averaging 2,440 bopd, an 8 percent increase from 2,253 bopd in the third quarter. Fourth-quarter sales levels are expected to be comparable to third-quarter results, consistent with the Company’s seasonal activity slowdown due to the annual hunting season drilling moratorium. Currently, only one drilling rig is active in drilling Porosity wells. Schlumberger is continuing its comprehensive reservoir optimization study of the Porosity, which is anticipated to be concluded about the end of February 2008.
About TXCO Resources
TXCO Resources, formerly The Exploration Company, is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western Oklahoma. It has a consistent record of long-term growth in its proved oil and gas reserves, leasehold acreage position, production and cash flow through its established exploration and development programs. TXCO’s business strategy is to build shareholder value by acquiring undeveloped mineral interests and internally developing a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. It accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on Nasdaq’s Global Select Market under the symbol “TXCO.”
Forward-Looking Statements
Statements in this press release that are not historical, including statements regarding TXCO's or management's intentions, hopes, beliefs, expectations, representations, projections, estimations, plans or predictions of the future, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include those relating to oil and gas prices, capital expenditures, production levels, well test results, drilling plans, including the timing, number and cost of wells to be drilled, projects and expected response, and establishment of reserves. It is important to note that actual results may differ materially from the results predicted in any such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the costs of exploring and developing new oil and natural gas reserves, the price for which such reserves can be sold, environmental concerns affecting the drilling of oil and natural gas wells, as well as general market conditions, competition and pricing. More information about potential factors that could affect the Company's operating and financial results is included in TXCO's annual report on Form 10-K for the year ended Dec. 31, 2006, and its Form 10-Q for the quarter ended Sept. 30, 2007. These and all previously filed documents are on file at the Securities and Exchange Commission and can be viewed on TXCO's Web site at www.txco.com. Copies are available without charge, upon request from the Company.
Contact:
TXCO Resources, San Antonio
Investors:
Roberto R. Thomae, 210-496-5300, ext. 214
bthomae@txco.com
or
Media:
Paul Hart, 210-496-5300 ext. 264
pdhart@txco.com
--------------------------------------------------------------------------------
Source: TXCO Resources
POE.V POEFF Table Pounder Behaving as Hoped.
I am working on a lengthy piece of DD for POE that I will post in the next 24 hours. This is also my stock fot the year in 2008.
Stay tuned!
Kipp
Bob - KCL
This is the news I was waiting for. I think the price will bleed down to the P.P. level and that is where I will consider adding to KCL. The market caps of the potash producers are in the 10's of $CAD BILLIONS, they could scoop up a huge reserve for a song at current valuation of $CAD 75 million!
This is my speculative play for 2008-2009.
Kipp
Applying the K.I.S.S. to MOSH
I am a value investor, just search my posts for the past few years. I haven't participated in many momo or .pk stocks. I have positioned myself here using the "Keep It Simple Stupid" approach. If there are 71 million + or - trust units out. If the settlement is a minimum of $100 million, if you subtract $10 million for legal expenses and C&A costs, you will get nearly a $1.28 per unit. I have an even 50,000 units at an average $.28. It seems like a high probability to me that there will be some sort of settlement. I will check in here from time to time and appreciate the work you founders have done. Thanks for posting it on the VMC zipcode changer board.
Good luck everyone and have a great holiday season!
Kipp
POE.V POEFF Table Pounder
I will get all of my ducks in a row and post them here soon.
Kipp
$500 BILLION USD BAILOUT
Convert the $348 billion euro loans to USD and you get $500 billion USD+-. I have been talking about a blizzard of paper money but this is over the top. This will fuel the commodity inflation I have been talking about. Kipp
ECB Lends $502 Billion to Ease Crunch
By JOELLEN PERRY
December 18, 2007 8:11 a.m.
FRANKFURT -- The European Central Bank found strong demand Tuesday for its offer to lend euro-zone banks extra money to get them through year-end, lending a whopping total of €348.6 billion ($501.7 billion) for two weeks in its bid to ease persistent money-market tensions.
Analysts had expected the sum at Tuesday's planned operation to be large, following the ECB's announcement late Monday that it would meet all bids at or above 4.21%. Prior to the operation, the ECB had estimated banks would need €180.5 billion for routine business.
The move appeared to ease some money-market tensions. Two-week interbank rates fell to between 4.25% and 4.3%, closer to the ECB's 4% policy rate. Last Friday, as banks scrambled for to have cash on hand when books close at year-end, two-week rates shot up above 4.9%.
But while the extra funds are likely to help smooth short-term tensions, analysts say the fundamental banking-sector problems could resurface in January. "This isn't solving the problem," said James Nixon, euro-zone economist with Societe Generale in London, noting many banks are still struggling to fund hard-to-sell assets such as asset-backed commercial paper. "It's just postponing it. At some point, you have to address the fact that for some of these assets, there are no buyers."
The ECB's Tuesday move comes on the heels of a coordinated global central-bank sweep last week aimed at coaxing banks to lend more readily at a time when fear has seized up world credit markets. The U.S. Federal Reserve, as part of its response, Monday began auctioning off the first of up to $40 billion in credit under a new credit window; results of that move will be discolosed Wednesday.
Central bankers are on high alert for potential turn-of-the-year tensions. Since August, banks have been reluctant to lend even to each other for more than a few days, with a need to have cash on hand to fund unanticipated commitments and a mistrust of each other's creditworthiness exacerbating a typical aversion to showing a shortage of cash at year-end.
With euro-zone banks increasingly jittery about having enough cash on hand at year-end, demand for Tuesday's two-week funds was strong, with 390 institutions submitting bids totaling over €377 billion.
Monday's move was the second time in its nine-year history that the ECB had pre-announced it would guarantee all bids at a fixed rate. The first was August 9, when fears about European banks' subprime exposure pushed up euro-zone overnight lending rates to a peak and prompted the ECB to pump in nearly €95 billion in overnight funds.
Despite the extraordinary steps and concerted central-bank action, euro-zone institutions remain wary of lending to one another for longer periods of time. Three-month inter-bank rates have edged lower, but at around 5%, remain higher than usual, given the ECB's target rate of 4% for overnight loans.
--Emese Bartha contributed
PXD Insider Sale - Why on earth would you sell that much stock when only a few more trading days would allow you to dodge the tax bill for 15 1/2 months?
Hmmmm.
Kipp
cl00l - I think they will have to do a P.P. soon to get the money to make the lease payment and do the drilling program. Is that the way you see it? I wonder if we called them and asked about it if we could get in on the P.P. I will add to my holdings when the P.P. comes out and shows us that they are proceeding. P.P. will be a good indication because "real" money will be on the line at that point.
What do you think????
Kipp
O Canada!
Our home and native land!
True patriot love in all thy sons command.
With glowing hearts we see thee rise,
The True North strong and free!
From far and wide, O Canada, we stand on guard for thee.
God keep our land glorious and free!
O Canada, we stand on guard for thee.
O Canada, we stand on guard for thee.
I am singing their national anthem in support of the loonie! It is up 1% today so at least that helps a little. Now if only we could get our brothers to the north to support their jr. miners we could get something cookin'!
Sing it with me!
Kipp
Excellon Receives Conditional Listing Acceptance From the Toronto Stock Exchange
Monday December 17, 8:52 am ET
TORONTO, ONTARIO--(Marketwire - Dec. 17, 2007) - Excellon Resources Inc. (TSX VENTURE:EXN - News) is pleased to announce that, on December 5, 2007, the Toronto Stock Exchange ("TSX") conditionally approved the listing of Company's common shares, subject to satisfying certain conditions set by the TSX and receipt of all required documentation, on or before March 4, 2008.
"Graduation to the TSX represents a significant milestone for Excellon, and was one of our corporate goals for 2007," said Richard W. Brissenden, Excellon's president and CEO. "We believe listing on the TSX will increase Excellon's profile, as we continue to expand our operation at Platosa in Mexico."
POT - Taking potash to $400/ton!
I just got off the phone with one of my UAP fertilizer buyers, he was in shock at an email from his boss. POT is taking potash to $400/ton delivered to the upper midwest. If there is any validity to KCL.V it will be the stock of the year for 2008. POT is also going to stay strong.
Kipp