NATURAL GAS
$4.02 -0.134
TRILOGY ENERGY TRUST
(T-TET)
$8.50 +0.25
SOURCE EXPLORATION
(V-SOP)
$0.20 +0.005
To say that natural gas is in the tank is an understate-
ment...it’s ugly and the scary part is that at this time of the
year, there is probably room for it to get even worse. Last
we saw on the New York Futures Exchange, natural gas
was yours for a paltry $3.97 and in Calgary, we are seeing
trades being done at $3.60 an mcf. By the time you take
out tolls for transporting natural gas, plus all the other
costs associated with it, most producers right now are
losing a whole bunch of money. And it’s affecting the
whole patch. There will be some companies in trouble.
There’s been all sorts of excitement about the Cardium
and Bakken players over the last couple of months, but
most of the same players that are doing well in those sec-
tors, are companies that still might have 40%, 50% or 60%
of their assets tied up in natural gas production. This is
certainly going to put a top on just how far most of the oil
and gas companies can go for a while, until we see just
when and if natural gas can ever recover.
The scary part of course is in the United States where
so much gas has been discovered over the last while, one
just shakes one’s head and wonder when will the Yanks
ever realize that if they started using natural gas in cars,
trucks, busses and you-name-it, that would create hun-
dreds of thousands of jobs in the United States, building
the infrastructure and the new technologies and leaving
them so less dependent on foreign sources.
Which gets us to Darryl Cardey. One of the Howe
Street financiers and guy behind the scenes on several
mining companies, he is one of the people that was be-
hind the success of Underworld Resources (UW) which
was the Yukon gold play recently taken out for a nice
profit. Ironically, Cardey tells us, that at the time the ne-
gotiations started, as a director of the company, he was
involved at the same time his family was down at Disney-
land. There’s nothing like trying to herd a young tribe
through Splash Mountain at the same time you are taking
cell calls on the future of Underworld. It would all be a
little confusing.
But when we ask him for a few ideas on the market, he
comes up with two very interesting thoughts.
TRANSGLOBE ENERGY
(T-TGL)
$5.58 +0.56
Ross Clarkson of TransGlobe Energy and “PR Guy to the
Stars” Scott Koyich recently hosted an analyst trip to
Egypt to see some of TransGlobe’s operations...and to-
day they come up with an update on latest developments
in Egypt and so far it looks pretty exciting.
They tell us today that, “Three wells were frac’d in the
Arta field, following on the successful frac of Arta #9 in
early February. All three have seen ten-fold production
increases similar to the Arta #9 well.” This is a field that
they admit they had not paid a lot of attention to, but now
they have higher expectations.
Meanwhile, their Hoshia #8 well which discovered the
Nukhul reservoir has only been perforated and is produc-
ing 80 barrels a day. They are hoping that fracing could
move that number to 300 to 400 barrels a day.
The Hana #21 well has extended the Hana field in a
northern direction which hit an up-dip structural location.
They expect production at the end of next week at 300 to
500 barrels a day and Koyich points out that the Hana
field, “just keeps bigger and the water-flood of the field
has already contributed seven million barrels in reserve
adds in 2009.”
Meanwhile, Safwa #1, TransGlobe’s first western De-
sert oil discovery tested 300 barrels per day.
So all the numbers are great and suddenly Canac-
cord’s Fred Kozak who has been following the story for a
while with an aggressive $7.00 target, suddenly doesn’t
look all that outrageous with that target price.
Kozak writes today, “With the company’s active Egyp-
tian-drilling program, TransGlobe’s production guidance
of 10,000-10,500 bbl/d may be conservative…”
Posts
