CRUDE OIL
$66.62 -0.22
It wasn’t too long ago in the good ole days that every-
one seemed to be talking about peak oil. The world econ-
omy was humming along just beautifully, thank you very
much, and oil was in increasing demand just about every-
where...well, just about everywhere except North America.
Oh! The good ole days!
One of the biggest industries of the time was churning
out books that dwelled on the topic of peak oil and how
sooner or later the world would run out of this stuff and the
price would go to $150, $200, $250 a barrel. Take your pick.
Oh! The good ole days!
I don’t think too many people believe that anytime soon
now. Heck, we might have bought into that theory our-
selves, once upon a time, now I can’t see this peak oil be-
ing believable...even ten or twenty years out doesn’t seem
possible.
Maybe now a person has to play oil and gas
stocks for cycles, price range, seasonal moves, but more
importantly—discoveries.
Last week the New York Times did a feature article enti-
tled “Oil Industry Set the Brisk Pace of New Discoveries”
and points out that almost 10 billion barrels have been dis-
covered in the first six months of this year. The Times
writes, “The oil industry has been on a hot streak this year,
thanks to a series of major discoveries that have rekindled
the sense of excitement across the petroleum sector de-
spite falling prices in tough economies.
These discoveries
spanning five continents are the result of hefty investments
that began early in the decade when oil prices rose and of
new technologies that allow explorers to drill at greater
depths and break tougher rocks.”
The Times continues, “More than 200 discoveries have
been reported so far this year in dozens of countries in-
cluding Northern Iraq’s Kurdish region, Australia, Israel,
Iran, Brazil, Norway, Ghana and Russia. They have been
made by International giants like ExxonMobil, but also by
industry minnows like Tullow Oil.”
As far as their 10 billion barrel number, you could use
much bigger numbers if you consider discoveries made in
the last 12 months or so. The numbers are all over place
for the sub-salt discoveries offshore Brazil, but you could
use numbers as low as 10 billion barrels potential or as
much as 50 billion barrels. New discoveries in the Gulf of
Mexico made recently are in the two to five billion range.
They’ve just made one of the biggest ever natural gas dis-
coveries in Venezuela and projects planned in Venezuela
could add significantly to production.
Then of course there are areas like Kurdistan, where we
don’t doubt there is going to billions if not tens of billions of
new discoveries made over the coming time.
Given that it’s one of the most corrupt places in the
world, and politics are a big problem, one could question
who would ultimately own the prize, but we don’t doubt
discoveries will be made.
At the same time as all these oil discoveries are being
made and we must admit, some of them are going to take
at least $60 oil to see actual production, there have been
immense changes in technology from horizontal drilling to
fracing that is going to make the discovery and the pro-
duction of oil much more efficient and cost effective.
Then of course, there is the story of Wavefront Energy
which we’ve talked about many times in the last four or
five months and is one of our favourite stories. If their
technology works, it is simply going to revolutionize the
oil and gas business and if they can produce an extra 15%
to 20% of the oil out of old oil fields, with tens of billions of
barrels plus that could be found this way, is simply mind-
boggling.
Yes, there might be a peak oil some day, it’s just proba-
bly decades in the future.
Mind you, there are other opinions. Goldman Sachs,
who seems to change their bets on oil prices weekly, is
now suggesting $85 for the end of 2009 from $65 and $95
for the end of 2010.
We caught up with a very busy John Kaiser today and
he’s busy because he’s got one of the hottest hands in the
mining sector. He is the guy that was talking about rare
earths before people even knew what it was, and some of
his picks have absolutely flown.
When we caught up with him today, we were hoping to
get some information on Quest Uranium (QUC), one of his
previous picks was moving today, but he preferred not to
comment.
Meanwhile, for those following Peregrine Diamonds
(PGD) it would be very important to read his comments in
today’s Kaiser Bottom Fishing Report (just go to
info@kaiserbottomfish.com) and heaven forbid, anyone
would listen to a technical analyst for opinions on Pere-
grine rather than someone who knows fundamentals.
But when we ask Kaiser to pick one stock to buy today,
he goes for something right out of left field, a walk on the
wild side and picks International Enexco for their “hot pot”
project in Nevada which is expecting assays shortly, but so
far is coming up with all the rights poisons and work to
date suggests there might be something interesting com-
ing. Kaiser points out the little company has $8 million in
the bank.
Tuesday, September 29, 2009
Pescod Says...
Stockhouse Is A Slow Ad Invested POS
The Stockhouse boards are bloated ad infested boards.
cmt-t The Bids To Buy Are Huge - Ask Yourself why then Buy Compton Fast!
| Compton reduces debt level through the sale of overriding royalties |
| CALGARY, Sep. 28, 2009 (Canada NewsWire via COMTEX) -- Compton Petroleum Corporation (TSX - CMT, NYSE - CMZ) is pleased to announce that it has entered into purchase and sale agreements for the sale of various overriding royalties to two parties. Total proceeds of the transactions are approximately $54.5 million with an option for an additional $47.5 million, providing Compton with total potential proceeds of $102.0 million which will be used to reduce the Corporation's bank debt. The transactions include the sale of a 2.5% overriding royalty ('ORR') with an option to purchase an additional 2.5% ORR by December 24, 2009. Assuming the full exercise of the option, the ORR will represent 5% of the gross production revenue on the Corporation's existing land base less certain transportation costs and marketing fees, calculated on a monthly basis. Substantially all of Compton's current proved, probable and possible assets are included in this ORR. In total, assuming the full exercise of the option, the transactions represent approximately 1,170 boe/d of production based on second quarter 2009 results. These transactions combined with the recently announced equity offering are expected to reduce total debt by approximately $263.0 million. Should the option not be exercised, proceeds available to reduce debt are $216.0 million related to 635 boe/d of production. The ORR transactions are anticipated to close in October 2009. Scotia Waterous Inc. acted as a financial advisor to Compton with respect to the transactions. "The sale of the overriding royalties is another key step in realizing our objective to reduce our debt level," said Tim Granger, President and Chief Executive Officer. "This sale and our recently announced equity issue are positive first steps to improve the Corporation's capital structure. We're pleased with these achievements as Compton now has greater flexibility and choice, allowing us to start shifting our focus to growth opportunities from our substantial asset base. In the upcoming months, we will continue to assess additional debt reduction options." Advisories |
Toronto's Zenn stops making electric cars
In an apparently radical shift in plans, Toronto-based electric car company Zenn Motor Company Inc. says it decided to switch its business strategy from selling electric vehicles to distributing an electric drive train. As a result, the company will no longer be building its cityZenn car, instead focusing on what its calls the ZENNergy drive train. This would be an EESU-powered drive train that can be installed in the cars of other automakers. "The way things have really changed over the last year – there have been such dramatic shifts and focus on electric vehicles – it doesn't make a lot of business sense for us to go into the distribution and sale of the vehicle," said Zenn chief executive Ian Clifford. Clifford, like the rest of the world, is still waiting for EEStor to come through with a pre-production battery. "We are working on a daily basis with EEStor on this final milestone – this very, very critical milestone – because it takes us to commercial viability," Clifford said. U.S.-based battery maker EEStor Inc. is developing a battery that aims to charge in minutes and power a car for 400 kilometres at speeds up to 125 km/h. Zenn has a 10.5-per-cent stake in the company. Meanwhile, Clifford is in talks with other automakers who might be interested in EESU-powered cars. Zenn also has the exclusive rights to sell the technology for cars up to a maximum weight and retrofit cars more than one year old. Zenn still plans to build proof-of- concept cars, but won't mass produce them. The company in a statement said the its previously announced cityZenn highway-capable electric vehicle will not be developed into a standalone commercially available offering. "Integration of the Zennergy drive in vehicles has always been our long-term objective," said Clifford. "We want to partner with all OEMs (original equiment manufacturers) so that consumers can drive a variety of electric vehicles across numerous automotive brands with one common denominator–they are all powered by Zennergy." Zenn has built about 350 all-electricm, two -seater vehicles that sell for about $15,995 (U.S.) and have a range of 80 kilometres.
