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This is a fun, classic teaser — all about a huge oil rush that’s taking place under our noses, without getting a lot of press. And better yet, it keys on a particular man who acts behind the scenes as one of the leaders of the new revolution in horizontal drilling and fracturing, but of course the man’s name is top-secret, and his face is blacked out in the photo of a hard-workin’ oil man …
Oh, and the ad launches by telling us …
“The last domestic oil driller he led grew 1,333% from 2005 – 2009…
“Here’s how his $4-a-share start-up will score you 1,239% profits by 2012″
… and who can resist those kinds of returns?
The teaser ad is for the $20 Trillion Report, which I haven’t heard much about lately — the newsletter’s most active teaser ads that I’ve written about were for various drillers in the Bakken, which was certainly a fun investment craze for a while as well, but that was a while back.
This new oil bonanza, which they call Alberta’s Secret Oil Rush, is all about the Cardium play, which is apparently a shale-trapped light oil area in Alberta, an area where there used to be huge oil production decades ago, but much of the oil was abandoned because drilling for it was too expensive and inefficient until horizontal drilling was brought into play in recent years. So the Cardium play is once again a hot target for investors, with several companies locking up acreage and looking for the best spots in the area.
So the teaser tells us that John Philips, the publisher of the newsletter, went to see this company’s drilling for himself, and he met the secret “Mr. M” behind their great success …
“The world’s best modern oilman leads YOU to the biggest oil money on Earth — right here in North America
“My guide for this eye-opening experience was one of the world’s foremost experts in the NEW science of unconventional petroleum extraction…
“In fact, according to my research, he’d easily be a contender for the title of ‘World’s Best Modern Oilman.’
“I can’t tell you his name here (for now, let’s just call him “Mr. M”), but I can show you what he’s done…
“As an engineer and consultant, Mr. M has been a major player in the Ameri-Canadian oil scene for over 15 years, guiding numerous drilling companies to major profits in the Shaunavon, Viking, and Bakken oil-bearing formations.”
You can see the whole ad here if you like, I won’t go into the details about the huge performance from Bakken drillers, and how they’re using that performance to estimate massive returns for this new company.
And then, to further tease this “Mr. M,” they tell us that this “World’s Best Modern Oilman” was with a Bakken company from 2005-2009, and during that time the production just about quadrupled, to a fourth quarter level of 52,044 barrels/day in 2009. Which finally gives us a nice, specific clue … that must mean that his old company was Crescent Point Energy (CPG in Toronto), which does have a big Bakken position that I think is mostly on the Saskatchewan side of the border.
To dig into this a bit further, who the heck are they talking about from Crescent Point that’s now working “behind the scenes” to drill for a company that’s doing horizontal drilling in the Cardium.
And that’s at about $4 a share.
We get a bit more info as well:
“this firm has huge advantages over Bakken drillers:
- Light, sweet Cardium crude with zero “in situ” water
- Lower extraction and on-site petroleum processing costs
- Wells that are bearing a lucrative 70/30:oil/gas percentage ratio
- A business model efficient enough to remain profitable with $38 oil
- Plans to open three times as many wells in 2010 as they did in 2009
- Control of a huge chunk of the Cardium (43 blocks, room for 140 wells)
And Mr. M’s proven horizontal fracturing expertise running the show…
“Comparing their profit potential to Bakken-focused companies is like comparing a bottle rocket to a surface-to-air missile…”
And finally, to round out our clues, we get the postscript of the ad …
“P.S. UPDATE 4/30/2010: Mr. M’s company just released drilling results from 7 of its newest Cardium wells, and they’re exceeding projections by more than 25%. You MUST MOVE NOW — news like this does not escape the mainstream energy media. Get full details on how to invest in your FREE 1,239% by 2012: The Next Big Play of North America’s Oil Comeback Special Report…”
That tells me we must be getting teased to buy … Midway Energy (MEL in Toronto, MELEF on the pink sheets)
This one is a little below $4, the high is at $3.95 and it’s currently trading at about $3.50 after last week’s wild action. The guy in charge is actually an “M”, M. Scott Ratushny, but I suspect that they “Mr. M.” they’re talking about is Kevin McIntosh, who was a consultant for Crescent Point for many years and seems to be the principal “drilling guy” for Midway.
And they do have 43 “sections” of area for drilling, including now “over 150″ targets … and the update on their latest activities does indeed talk all about their seven current holes — three drilled in the fourth quarter of 2009, four in the first quarter of this year, all of which are reportedly now producing, so they do have money coming in … and they have eight more holes planned for the balance of this year. Not an ironclad solution, to be sure, but I think it’s a good fit with the limited clues we have … as always, if you think I’m wrong (or right), I’m all ears.
It’s late late late already, my Gumshoe friends, so I’m sorry to cut my hackneyed attempts at wisdom short … I’ll leave you there with this one — talk amongst yourselves, please, and let us know what you think. Believe in the Cardium? Favor Midway Energy over the many other companies, large and small, who are also fighting for a spot in the area? That list includes Bonterra Energy (BNE in Toronto), Enerplus Resources Fund (ERF), Penn West Energy (PWE, or PWT in Toronto), Daylight Energy (DAY in Toronto) and Bellatrix Exploration (BXE in Toronto), among others that aren’t coming immediately to mind.
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by manish on August 31, 2010 at 7:09 am
by IrrationalExuberance on August 28, 2010 at 12:05 am
by abrodie on August 23, 2010 at 5:47 pm
by manish on August 21, 2010 at 7:14 am
by manish on August 20, 2010 at 8:10 am
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Thanks for your diligence, Travis, it is always appreciated! Re MELEF, worth pointing out that the trading volume is verrrrrry low—~3K per day, which means you can get trapped in this stock and lose your shirt if things go bad. Their crude is a lot more liquid.
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StockGumshoe Reply:
May 12th, 2010 at 7:27 pm
Indeed… Though with Canadian stocks on the pinks there's often some \”hidden\” liquidity because most brokers would effectively buy or sell in Toronto for you and just keep your records on the pink sheets — prices usually track a lot closer than pink sheet stocks that represent stocks in London, for example.
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aaph struck oil in okla today. aaph trading at .98 up .08 for the day.
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Enter text right here!The Cardium play is very real and yes, it is indeed light sweet crude. Don't sell it short, the majors are piling in!
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Arcan Resources is another good fit to the price, and the heavy use of fracturing, and the very encouraging results, although the specific numbers of areas to develop didn't compare precisely: they have MORE. And no "Mr. M" in the management. Nevertheless, they look as good as Midway which I had looked at also when I first got this newsletter last weekend (although, in truth, not all that deeply). In their About Us section they say, "for every barrel Arcan produced it endeavors to find two more. For 2010 Arcan is targeting average daily production of 2,500 – 3,000 Boe/d."
Can't say this it it for sure, but it looks at a glance just as interesting and the price action lately is certainly nothing to sneeze at.
Anyone have a map of where exactly the Cardium is in Alberta?
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Russ Reply:
May 11th, 2010 at 4:09 am
http://www.ags.gov.ab.ca/publications/wcsb_atlas/A_CH23/CH_23_F.html
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gileb Reply:
May 11th, 2010 at 3:42 pm
Cardium oil field is very large deposit north west alberta upto BC and Fort Macmurray. Most prolefic result come from Pembina sector. Check that link http://www.foundationresourcestrust.ca/media/2010...
which is a report from TD securities to investigate and do your dd. I have selected few penny stock with high profil based on land property and drilling permits from the 50 largest owners. (more than 6,000 acres). TSX: FEL, AXL, MEL, BXE, ZCO, VRO, AAV, NGL …TSXV: PGB, CMT, KEC, PSX, CTA, WTL, …. US: ENT.
Cheapest one in promising development : Husky energy (HSE-TSX)
good reading
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Ben Reply:
May 13th, 2010 at 8:15 pm
Google Cardium or Calgary Alberta map. Just down the road west of Calgary
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Another Cardium name that pops up in a simple search is Delphi Energy DEE – TSX). Adding it to a spreadsheet with all the others, showing total area, number of well sites, boe production level and guidance if any, API gravity, natgas/NGL content,etc.might show some interesting comparisons.
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For a map of the Cardium drillers and production info, Google " Cardium oil opportunity", this will give you the TD Newcrest report on oil and gas royalty trusts and producers. Lots of useful research. Enjoy
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Has the Toronto Stock Exchange proven itself to be trustworthy? After the antics of this past week, I am shocked that the Gumshoe is even worrying about the stock selection process! How about Preservation of Capital? Do we get smacked in the head, only to get up and take it again and again?
Meanwhile, we are supposed to trust the Pink Sheets on a thinly traded stock, tied to a foreign stock exchange, albeit Toronto? For those of us who have been screwed by the Juniors on the Vancouver Exchange, I say: "stay away,,,,,,,,be fearful!"
Travis — I was going to suggest that we invest in good ole Proctor and Gamble, but it was the poster child for the Plunge last week, dropping 35% in a New York Minute. Of course, if you had a protective stop in place, "adios, amigo!"
We all learned once again why we are paid NOTHING on our Cash Money Market accounts! I would like to hear from the wise folks here at Gumshoe what you all think about being Plunged!
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I did extensive work on this Cardium Formation because of a much earlier article by Travis, It appears to be real and the key in the turn around of the formation is the use of Horizonal drilling that shale. All the biggies of Canada have moved in and a lot of juniors have been bought out. I own some and am buying more companies.
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Darrell, just out of curiosity, what companies do you recommend?
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Darrell Reply:
May 11th, 2010 at 2:56 pm
I own MEL.to, DEE.to,,BXE.to, ONR.to and then there are some bigger plays like POU.TSX, CPG.tsx,NGL.to, TODSF.PK, ERF, PBN.tsx and HSE.to. Maby are just now coming into a good program for Horizonal drilling and some are still hung up on N.GAS, but looking to venture in light oil. Just above the formation, I think , is COUGF, so DYODD. Some I own and NONE I will RECOMMEND because I don't want to be responsible for anyones losses, if they happen. I'm noy yet in LOVE with this like the BAKKEN, but the potential is there. Sorry, don't forget PPY-A.TO or PPY-B.to, painted pony made me a ton in tne Bakken and are still there .
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LVJ Reply:
May 11th, 2010 at 3:39 pm
Thanks, Darrell – I appreciate the input!
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The details you guys bring to the table is incredible.
thankyou for allowing me to partcipate
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A factor in the "oil play" is the new Royalty rules….thus, I am more partial to the biggies…like Petrobakken, Penn West and StatOil….who have greater expertise and better ability to take advantage of the "system".
As for "Advantages" skepticism of the marketplace (TSE)….I hear you there….BUT….the kettle is a bit black when you have Goldman Sachs, AIG, Lehman, Merrill, …tied to our collective butts.
There is nothing super fishy about the TSE….it's what you invest in !!! As for the Cardium play (or the oil sands in Athabasca)….I say stay with the biggies.
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If you guys are looking for a play in the heavy oil game then you need to look at Ivanhoe Energy. Read the report that Dr Faessel put out recently. Billionaire Financier Robert Friedland is a 20% owner in this company and institutions own more than 23% of the shares. I bought it back in December of 2008 at .41/shr and it was up to a high of 3.80 before the euro debacle. It's way undervalued now at 2.69. The Tamarack project alone when completed in 2013 is estimated to be worth around $7.50/shr on its own.
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stockcrazy10 Reply:
May 12th, 2010 at 12:52 am
Travis discussed IVAN a few weeks ago…
http://www.stockgumshoe.com/2010/04/may-10-govern...
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Travis – I have just read an item in Alternative Trader by Nick Hodge. It's about a nuclear power plant manufacturer in Idaho who has got business in South Korea. and if I send money quickly, I will get very rich.
Any observations please (I am one of your English customers.).
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stockcrazy10 Reply:
May 13th, 2010 at 5:26 pm
AEHI?
http://www.marketwatch.com/story/alternate-energy...
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http://www.stockgumshoe.com/2010/05/unauthorized-photo-and-game-changing-nuclear-power-in-idaho.html
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with chinese 1.6 billion just released deal with penn-west energy why not go with largest land holder in the cardium area along with big chunk of peace river tar sands ,and a big part of planned carbon capture assets watching for plains midstream canada to release major news in short order im betting on
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mike Reply:
July 10th, 2010 at 9:33 pm
Yes ,penn west ,penn west go yah.If the info i have been reading and all trends demands etc.etc complete themselves .I think that generaly oil will go north and the companys that manage properly will benefit. Alot of bigger companys are buying smaller companys to gain exposure and man power insantly .something is up, after all who would spend that amount at the poker table, if you will,or misslead someone into buying shares of a company on a false runup. The end
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