BEAUTIFUL DIRTY OIL
April 20, 2008
The price of sweet crude oil and gasoline is soaring and has commanded the attention of all savvy investors. Friday the 19th of April brought record closes for both crude oil and gasoline.
Crude oil touched an all time record of $116.97 per barrel Friday and closed at $116.69 per barrel, which is a record close.
Gasoline for May delivery closed up over 3 cents to $2.9893 Friday.
These continual increases in value need to be taken very seriously. They will surely affect every aspect of our financial lives and will be felt at the pump as we are forced to pay more and more for gasoline. As demand increases during the summer driving season retail gas prices are expected to hit $4 a gallon. The average price for a litre of gasoline in Canada has risen to above $1.20 for the first time in history.
Let’s take a look at one of the world’s premier oilfield services provider which just happens to be working with our featured oil and gas company, Montello Resources (MEO:TSXV) down in the prolific Tennessee Appalachians. Montello has recently been successful in bringing on a well which flow tested at over 750 barrels per day.
Schlumberger Ltd., which is based in Houston reported income of $1.34 billion for the first quarter in the months between January and March. This was an increase from the corresponding quarter of last year where they earned $1.09 billion. To see the added cost and complications of oil operations, consider this, Schlumberger’s revenue rose to $6.29 billion in the quarter from $5.46 billion in last year’s first quarter.
The CEO and Chairman of Schlumberger, Andrew Gould stated, “We remain convinced that current investment levels are insufficient to both stem decline and to explore and develop new reserves and, as a result, we anticipate the current cycle of exploration and production spending will remain stronger for a longer period than we originally anticipated.”
This company is in the middle of a $40 million-share buyback program which was approved in 2006. In the past quarter they repurchased 7 million common shares at an average price of $81.16.
The US Energy has reported that the government will continue to buy oil for the Strategic Petroleum Reserve, even with prices well over $100 per barrel.
Mr. Boone Pickens, a billionaire energy investor and the founder and chairman of Dallas-based BP Capital LLC stated,
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YAN.V Yangarra is my O&G top pick
YAN.V Yangarra at 0.20$, more insider buying in last few days RATEYangarra Resources Ltd. (YAN) As of May 8th, 2008 Filing Date Transaction Date Insider Name Ownership Type Securities Nature of transaction # or value acquired or disposed of Unit Price
May 08/08 May 07/08 Helman, Daniel Indirect Ownership Common Shares 10 - Acquisition in the public market 21,000 $0.190 May 08/08 May 07/08 Helman, Daniel Indirect Ownership Common Shares 10 - Acquisition in the public market 21,000 $0.190 May 08/08 May 07/08 Helman, Daniel Indirect Ownership Common Shares 10 - Acquisition in the public market 75,000 $0.190 May 08/08 May 07/08 Helman, Daniel Direct Ownership Common Shares 10 - Acquisition in the public market 140,000 $0.190 May 08/08 Apr 28/08 Bowerman, Gordon Control or Direction Common Shares 10 - Acquisition in the public market 6,000 $0.180
• NAV(net asset value) per share is above 60 cents • liquidity is not a problem • massive insider buying occurred at 17 cents • more tie-ins which will increase production are underway • market cap/boe is less than 23 000$
Note: take a look at the 3 year chart
Yangarra Corporate package ( may 1st 2008) ( http://www.yangarra.ca/Corporate/Corp-1.pdf )
Highlights are based on my understanding
• Cash flow per share based on CURRENT PRODUCTION RATE = ( 20.01$/BOE in 2007 x 600 BOEPD x 365 Days/year) / 65.M shares = .067$/share • Price to CFPS = 3.3 x • 2007 Field netback = 32.48$ • 25% production increase from dec 31 to may 2008 ( from 480 to 600 BOEPD) • RLI = 14.85 years • Significant insider buying evident, latest filing may 15 2008
Now don`t forget the 20.01$/BOE is based on average commodity prices experienced in 2007, and we all now these prices have increased since then, for both oil & gas.
Re: BEAUTIFUL DIRTY OIL
Goldman Sachs just announced that they are calling for $150 p barrel by mid to late summer. This is getting out of hand. Pretty soon people wont be driving anymore. You'll have ot pray your Energy stocks climb just to keep gas in your tank!
Re: BEAUTIFUL DIRTY OIL - Dully
Go look at Falcon Oil and Gas and you will see one that has done very well of late. FO on the TSXV
Re: BEAUTIFUL DIRTY OIL - todays drop,
look at the market react to these numbers,
http://biz.yahoo.com/ap/080429/earns_countrywide.html
oil is staying high and will continue to rise in my opion,
Re: BEAUTIFUL DIRTY OIL
You say there is tons of opportunity but I haven't seen many oil and gas stocks do much over the past year. Small caps that is.
Re: OIL,OIL,OIL--WHERE? INTERESTING AND COLORFUL
It shouldn't be a scary thought for investors. Sure we lose it at the pump ut we can take full advantage by investing. Tons of opportunity to make money now.
Re: OIL,OIL,OIL--WHERE? INTERESTING AND COLORFUL
WOw,
very rude awakening, I mean I knew about the challenges we are goign to face, but not so detailed. It is obvious the workforce is aging and there just arent' enough bodies, how China and India are going to get their oil is beyond me, 80% of our infrastructure needs to get rebuilt??? What a scary though, it makes perfect sense though, Steel companies and gov funded steel companies should have a good run in the coming decades.. thanks edminnema, congrats on 700+ ranking, yuri
OIL,OIL,OIL--WHERE? INTERESTING AND COLORFUL
http://www.simmonsco-intl.com/files/CFA%20Society%20of%20Atlanta.pdf
Re: BEAUTIFUL DIRTY OIL
All good points and Nigeria's oil forecast has declined by an estimated 150,000 barrels per day for next month. Makes me want to stick to the North American producers.
Re: BEAUTIFUL DIRTY OIL
superb point ManusMinto, as the less fortunate countries become more aware of the amazing value and rising value of oil they will become more and more hostile, resulting in a domestic focus for oil, north america has more oil than we could dream of, at this exact moment it just so happens to not be as readily available as middle eastern / africa oil, time will change that for the better I presume,