TNOG as an Investment -
One of our fellow posters raised the issue of "why" anyone would invest in TNOG. Here are the reasons I am a TNOG Long.
First, any balanced investment portfolio should include a small percent (1-3) of speculative investments which, if successful, could provide what Regis calls "life changing money." Since a million shares of TNOG will cost you less than $4,000 for an oil & gas play, then the company is worth investigating further.
Next, consider the price of gas and oil @ $63 & $5.80 on the NYMEX 9/30/06. Cold weather in the upper midwest should put upward pressure on the spot market price of natural gas. OPEC nations are talking about reducing production to keep oil prices at the current levels.
As for Titan Oil itself, the basic business model is sound, find oil fields that were shut in when oil was @ $10-$15 per barrel and rework them with current techniques while selling into markets which should stay in the $50-$60 per barrel range. The current management is short on PR but claims one success in finding natural gas. Their current plan of building a portfolio of leases and spreading risk by arranging Joint Ventures seems a prudent approach. I do not hold current management to any promises made prior to their arrival in April of this year.
In 2005 the Stanley well was reported in the formal TRRC records (verifiable) to have produced 1,000 barrels of oil in one month. If Titan can replicate that production in Wilson, Bastrop or any of their other JV projects, then the PPS will certainly rise to multiples of the current price.
Like most Oil Patch plays, this is high risk/high reward investing. By all means point any potential investor to any and all facts/sources of information. Due Diligence and personal risk assessment is critical for good decision-making, as is determing the line between fact and opinion.
These are the reasons that I have taken a stake in TNOG, do your own research and Good Luck in the Oil Patch.
