Replies to post #1660 on Apex Resources Inc (SLMLF)

[regulator2006]

IMHO I think this one will be lucky if it is still trading in a few months. With all the potential why are they being sued and not doing their filings on time? Sounds like they are cash poor and potential rich. I saw a movie a few weeks ago called Tucker. He had some great ideas about changes to a car and I bet you cannot find a dealer to sell you a new one today.

[regulator2006]

The risks
While oil sands production appears to be poised for future growth, investing in this area does carry some risks. Because oil sands require much higher production costs than conventional reserves, profits will fall fast for these folks if oil prices plummet. OPEC or Russia could increase production to lower oil prices and make investments in non-conventional oil sources unprofitable. Alternately, high prices could lead to a worldwide reduction in demand. Either scenario would need to be quite extreme to bring oil prices below $30 a barrel.

Environmental concerns pose a greater risk; producing oil sands requires more energy than conventional hydrocarbons. This has created some difficulties for the Canadian government, as they are signatories to the Kyoto Protocol. Increasing oil sands production has increased their carbon dioxide (CO2) emissions. For now, it appears that Canada has arranged its carbon credits to balance Kyoto and continued development, but investors in this area should pay attention to any revisions to current agreements.

Given political problems in other oil-producing areas and weather concerns offshore, risks in the oil sands are moderate. In fact, with much of the currently mined bitumen deposits near the surface, "drilling risk" is basically eliminated -- the companies know the oil is there. Furthermore, Canada can ship syncrude via pipeline directly into the largest market on earth (the U.S.), reducing the total cost of bringing the product to market. All things considered, it appears that oil sands production will increase for many decades into the future.

Investments aside, I worry about the politically destabilizing impact this will have on the United States. How are proud Americans going to respond when we start hearing jokes like, "You eat that belly bacon, eh?" Worse yet, what if the Canadians start calling the United States "the 11th Province?"


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