StockBullz.com: Your Daily Stocks Blog - Oil Stocks

Cheapest Oil Sands Stock?

Tue, 11 Jul 2006 19:28:26 -0400

Hunter posted the following tip in response to my search for possible stocks undergoing accumulation:

Bronco Energy(BCF) has a flat chart with low volume. It will begin drilling its 55,000 acre Joint Venture (75% working interest) this quarter; so there will be opportunities for news releases to spark the share price. Fundamentally, an independent estimate determined 1/2 billion barrels of original oil in place. There are about 20mm shares out. And they own a drilling company.

This really interested me so I first checked out the stock chart. Oh what a beauty!

If that isn't a perfect example of professional accumulation activity I don't know what is.

For the past few days I have been doing some research on this company and what it's all about. To the best of my knowledge, here is what the company is about:

1. Receiving cash flow (still small) from several conventional source wells.

The Story Behind Canadian Mining Speculation

Mon, 03 Jul 2006 15:11:40 -0400

I just finished reading a tiny little 100 page book by the title of "The Story Behind Canadian Mining Speculation". It was written about 50 years ago by T.H. Mitchell and it should be a must read for any current mining speculator. If you can get your hands on it that is. Try searching for it at your university library because that is where I found this copy. Anyways, here are some great bits of information that I got from the book:

It should be clearly understood by the Canadian investor that the majority of the "penny" stock companies are worthless and always will be worthless. This has been proven time and time again. Yet their stocks have a definite value as a speculative trading medium; in other words, the stocks themselves are not worthless so long as somebody is willing to buy them. Thus, one has to be pessimistic about the possibilities of the companies, yet optimistic about the profit opportunities which their stocks present. And these are the sentiments which guide the professional traders.

Covered My CUX Short Position

Thu, 29 Jun 2006 12:49:18 -0400

CUX crossed its 30 day moving average today so sticking with my Trend Following approach, I had to cover my short position.

Another Way To Follow Trends

Sat, 17 Jun 2006 21:41:05 -0400

In my introduction to Trend Following, I was telling you that a way to judge a stock's trend is to simply see whether the current price is above or below its 30 day moving average.

This is a valid system but there are many other ways to follow trends too.

There is a very useful graph in the Trend Following book which shows the best moving average combinations that have given the best returns when backtested.

The best moving average combination is the 50 day and 110 day moving average combination. This combination produces an outstanding 20-22% average profit per year.

And according to this combination, Silvercorp is still in an uptrend, unlike if it is evaluated solely on a 30 day moving average.

Therefore as long as the 50 day M.A. stays above the 110 day M.A. the stock should keep rising.

As you can see by the chart above, the trend is still down for CUX. My other short candidate YRI is actually still in an uptrend if you use this combination so I might have to cover that for a tiny loss.

$1-trillion energy bonanza still buried

Tue, 13 Jun 2006 11:25:23 -0400

EDMONTON - A new energy treasure map drawn by industry and government experts points the way to a $1-trillion oil and gas bonanza buried in aging wells in Western Canada.
The astronomical added wealth can be reaped chiefly in Alberta by investing $12 billion to $15 billion over the next 15 years to tap oil and gas left behind by conventional production methods, the new guide estimates.
Gains of six billion barrels of oil and 22.5 trillion cubic feet of gas can be made by using known technology to improve recovery of discovered resources to 36 per cent of the amount in the ground from the current western Canadian average of 27 per cent, the experts predict.
"We're saying that is do-able," Eric Lloyd, president of Petroleum Technology Alliance Canada, said in an interview Monday as the study team led by his group and a government-industry information partnership known as EnergyINet launched efforts to ensure production improvements are made.
Hitting the increased efficiency target would generate $1 trillion or more in added industry and government revenues even if oil fell to an annual average $45 US a barrel and gas remained in its recent weakened price range of $7 per thousand cubic feet, Lloyd said.

A 'Short' Experience

Mon, 12 Jun 2006 11:38:27 -0400

I have never shorted a stock in my life until today. I thought it was very risky because there is the possibility to lose more than you put in if you short a stock and hold on while it goes to the moon.

However, my readings on Trend Following have changed my opinions.

As long as you put in proper stops before you short a stock, there is no more risk than going long that same stock.

So today I decided to short 2 stocks in very little quantities to test the trends with little risk because I am putting in very small amounts of capital.

What are they?

Well I looked at the 52 week lows yesterday and I saw a name I have heard before: Centurion Energy: CUX.TO.

Except I remember it when it was one of the highest flying stocks, now it's a dog. So what do you do with dogs? You short them!

As you can see, the trend is obviously down and the price is well below its 30 day Moving Average (blue line).

My exit strategy is either get out at $7.70 which is a 25% stop loss or when the price crosses the 30 day M.A. However, if the stock continues to go lower (maybe around 15% lower than these levels), I will probably double by short position.

Best Stock To Buy If Peak Oil Is True

Tue, 30 May 2006 20:22:17 -0400

I had the fortune today of reading over Matt Simmons latest Peak Oil update. I highly recommend you browse it by following this link.

If you don't know who he is, here is a brief summary taken from wikipedia:

Matthew R. Simmons is the chairman and CEO of Simmons & Company International and a frequently-cited individual in matters relating to Peak Oil. In his previous capacity, he served as energy adviser to U.S. President George W. Bush. Simmons is the author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.
Matthew Simmons in his book Twilight in the Desert, suggests that production from the Ghawar Field and Saudi Arabia, may soon peak. However, Simmons' work has been strongly criticised by Aramco officials such as Nansen Saleri. Others have critised Simmons work because he tried to base it on information he read in various Journal of Petroleum Technology (official publication of the Society of Petroleum Engineers) technical papers. Although he lacks technical training in this field, he properly interpreted data and engineering concepts to extrapolate his own estimates of remaining reserves.

Profile: Lukas Lundin

Sat, 27 May 2006 15:00:24 -0400

Like I've said many times in the past, I love to follow what the rich and successful are doing.

I figure that if they have gotten to be rich, they will continue to increase their wealth by continuing to do what made them money in the past. Now of course, many people go from rags to riches and back to rags within a lifetime but I would think that more of those individuals stay wealthy.

The next person that I will begin to track is Lukas Lundin. Myself being quite new to him, here is the profile he likes companies he's affiliated with to use:

Born in 1958, Lukas Lundin was raised in Stockholm, Sweden and educated at the Ecole Internationale de Genève in Switzerland. In 1981, Mr. Lundin graduated from the New Mexico Institute of Mining and Technology (engineering).

At age 25, Mr. Lundin headed International Petroleum Corporation's extensive and rapidly growing international operations and was based in the Company's technical office in Dubai, U.A.E. for over 12 years. From 1990 to June 1995, Mr. Lundin was President of International Musto Exploration Limited and was responsible for Musto's acquisition of the Bajo de la Alumbrera deposit. Bajo de la Alumbrera was the subject of a $500 million takeover by Rio Algom and North Limited and is now one of the largest gold/copper producers in the world. Mr. Lundin was also responsible for Argentina Gold and the discovery of the multi-million ounce Veladero gold deposit. Veladero was the subject of a $300 million takeover by Homestake in 1999. In addition, Mr. Lundin was a senior Director of Lundin Oil AB and was instrumental in the $480 million takeover of Lundin Oil by Talisman Energy in 2001. Mr. Lundin is currently a Director of a number of publicly traded resource companies.

A world traveler and motorcycle racing enthusiast, Mr. Lundin has twice completed the grueling 10,000 kilometre Dakar race across the Sahara Desert. He has climbed Mount Kilimanjaro, Mont Blanc and the Matterhorn. In the winter, he can be found helicopter skiing in Whistler and in summer, dirt bike racing with his four boys in Baja California.

Bottom Pick: Wavefront Energy?

Wed, 10 May 2006 17:14:20 -0400

There are many strategies that investors use in deciding which stocks to buy and sell. Until now, I've been basically looking for strength, good potential and insider holdings to pick which stocks to buy and sell.

But on the other spectrum of investing strategies is a technique some people call "bottom picking".

Basically, you analyze charts looking for stocks that have been beat down recently. Then you try to look for signs that their downtrend is over. If you are right, these picks can really move because they have nowhere to go but up.

I think that Wavefront Energy (wee.v) could be a great candidate as a bottom pick.

I started tracking them several months ago when they were trading in the 20 cent range. They seemed like a very interesting company and I kept them on my radar.

Then they released an exceptional string of news releases that pushed their share price to over $5 in a short period of time. That's more than a 20 bagger from the levels when I first discovered them.

Revisiting Peak Oil

Tue, 09 May 2006 15:55:28 -0400

I stumbled across a great article today done by Fortune Magazine with the self made billionaire investor Richard Rainwater.

The theory of Peak Oil is arguable but generally I would think of it as true. Oil is a non-renewable resource after all so how can we expect it to last forever? Yet our current habits and society does not take this into consideration at all. In North America especially, one cannot live a normal life in the city without a car.

Cars need gas so if we run out of oil, or cheap oil, our society will have to be completely transformed in the way it works.

Already the gas prices are about as high as they were last summer with all the hurricanes. But we are still very far from the summer driving season.

Therefore I think that Oil prices will hit over $100 this summer based solely on demand and a few hurricanes.

However, it will go even higher if one of the rogue countries limits exports. Another catalyst for higher prices would be terrorist attack. I still cannot believe there hasn't been one. There are millions of kilometres of oil pipelines all around the world that are not guarded and as soon as one of these is blown up, we can a nice oil price spike.

Buffett's Point of View:

Mon, 08 May 2006 12:31:37 -0400

Warren Buffett used to be the King of Investing. Used to?

Well he hasn't been able to achieve his market beating returns for a while now so that's why I am using that terminology.

Anyways, he has an annual shareholder's meeting that is very popular. It was held over the past weekend. Here are some of his comments:

On the real estate bubble
Buffett: "What we see in our residential brokerage business [HomeServices of America, the nation's second-largest realtor] is a slowdown everyplace, most dramatically in the formerly hottest markets. [Buffett singled out Dade and Broward counties in Florida as an area that has experienced a rise in unsold inventory and a stagnation in price.] The day traders of the Internet moved into trading condos, and that kind a speculation can produce a market that can move in a big way. You can get real discontinuities. We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments, especially in the higher end of the housing market."

Don't Buy Canwest!

Sun, 16 Apr 2006 22:58:23 -0400

It seems that the more I think about this Canwest recommendation, the worst I feel about it.

The whole company and that prospectus just makes me feel uneasy.

To tell you the truth, I read the Casey advertorial and it made me think this company is better than it really is.

I think it might go up for a while but eventually it will tank.

Perhaps the management is just pumping the stock themselves...I don't know but it just doesn't seem right to me.

Plus losing 40% of their claims to the government is quite odd.

So sorry I mentioned Canwest in the first place but I now feel they are not worth the amount of risk.

So from now on, I will try to be more careful and perhaps stay away from those darn American over the counter stocks!

Canwest Petroleum Risks

Sun, 16 Apr 2006 12:57:07 -0400

Although I have pointed out Canwest Petroleum as a possible stock pick, you have to understand that this stock carries as much or even more risks than one of my average picks. I was reading over their prospectus released April 11 and here are some interesting points I would like to highlight:

We are engaged in the exploration for and mining of oil shale in Pasquia Hills, Saskatchewan and the refining of certain petrochemical feedstocks derived from oil shale. We also are continuing to evaluate certain technology involving the separation of hydrocarbons from sand and oil shale.
For the fiscal year ended April 30, 2005, we generated no revenue and had a net loss of $5,109,073. As a result of recurring losses from operations and a working capital deficit of $1,765,711, our auditors, in their report dated July 22, 2005, have expressed substantial doubt about our ability to continue as a going concern.