James Monroe Capital Corp (JMON)

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http://www.eurasiaequityreport.com/id2.html

Strat Petroleum, LTD. (OTC: SPRL.PK) While we don't normally recommend penny stocks, especially non reporting pink sheet stocks, this one recently caught our eye thanks to the suggestion of Sergi Blagov in Moscow, who is very familiar with Russian oil markets and events. While a company of this size may seem out of place with respect to the other two companies profiled, we are including it in this issue. Strat Petroleum has entered a little known but potentially very profitable niche: recovering usable oil from sludge ponds. We see this as an opportunity because there are very few companies involved in this line of business and sludge waste is a very big problem in Russia, particularly for the environment. In early 2006, Strat Petroleum set up a joint venture in Bashkorstan and named it Strat Nafta Ufa and registered it as an LLC in the Republic of Bashkorstan. They acquired 1,000,000 metric tons of sludge reservoirs with a market value of almost $88 million dollars. Blagov has seen these reservoirs and was very impressed with their size and potential for oil recovery that these ponds could generate according to calculations.

Based on current market prices in the Russian Federation, the total reserves Strat Petroleum acquired have the potential to generate over $165 million over the next three to five years. Strat has also received all government approvals for the building of processing plants at these sludge sites. Recently, senior management met with officials from Rosneft, the Russian oil giant, to discuss a potential partnership servicing oil fields. Although not confirmed yet, one of our researchers with close ties to Chinese business tells us that she has heard strong rumors that Strat Petroleum may have an agreement, coincidently, with a subsidiary of Sinopec. Again, believed but not confirmed.

Readers are cautioned to note that most of their past announced projects and joint ventures have not materialised. Due to the fact that they do not file with the SEC and information is difficult to assess, we interviewed Samuel Hyams, CEO, and we found that due to unforeseen circumstances in the Russian equity markets, in 2005 they had to overhaul their business model in order to maximise shareholder value. They entered the sludge market after careful review, and he believes that shareholders will be excited in the near future as he feels that the current stock price is "severely depressed" in relation to their actual progress. It is not a glamorous business, but could be highly profitable. Strat Petroleum now owns these sludge reservoirs and they are looking for more sludge pits to acquire without the need for joint ventures. He feels that they are poised for a very good year. Unfortunately, due to non disclosure agreements, Hyams stated that the company cannot release more information for investors at this time, but will when those agreements are no longer an issue.

Strat Petroleum recently completed a $1 million dollar financing agreement, as well as signing a letter of intent with a firm that owns a sludge remediation process that will enable fast, efficient oil recovery from these ponds. According to Hyams, Strat Petroleum is already bringing in revenues. He would not elaborate as to how much, but said that information will also be forthcoming.

We view an investment in Strat Petroleum as extremely speculative, especially since they do not file reports with the SEC so investors should proceed with the utmost of caution. However, it also has the opportunity to become a success story, as some but not many penny stocks do . They have approximately 300 million shares outstanding and a share price as of this writing of less than a penny. We feel that based on the assets alone that they say they have acquired, a fair market value would put it at .25 a share right now in our estimation. And with the potential for more assets to acquire and new sludge processors, it could trade much higher over the next 3 years. Website www.stratpetroleum.com