Stock Gumshoe

Many of you have been interested in the MEGA-U308 teaser that’s been circulating from GRESSOR and Taipan recently. I’ve had several readers send in the suggested solution to this one, but I wasn’t ever able to confirm with as much certainty as I would like … thanks to the forum, though, readers like you can submit your own solutions, too.

And one just did so — he picked the same solution as the majority of readers who sent in emails on this, and though several readers have pointed out that a few of the details in the teaser aren’t accurate, the breadth of suggestions tells me that even though I haven’t confirmed it personally, they’re all most likely correct. I am certainly not an expert on the uranium market, so I’ll step back and let those of you who are run with this one and let us know if you think it’s worth the money.

Here’s the pick if you want to check it out and/or argue with it. FYI, aside from this reader about a half dozen others have suggested this solution via email, none of whom wanted to be mentioned by name. A couple alternative suggestions for this one were sent in, too, but without much conviction or detail. Sorry that I was too stubborn to post those picks without confirming it for myself, though you might also thank me: It’s down 10-20% or so from when I first started seeing this email.

August 11 update: Just a note that this stock, along with Chris DeHaemer’s other resource play Rusina Mining, has taken a significant hit of late. The hit this company is taking is probably almost entirely related to the current debate in the Somali government about setting up a new government oil company and new centralized oil policy, perhaps with investment from Indonesia and Kuwait and China. There might be some fear that this little resource company’s deal with Puntland could be superseded, though they claim that Puntland is independent from Somalia and will honor its agreement. Just a little more grist for your mill — there was a good article from Reuters yesterday that gives a solid update on the current debate and uncertainty.

Shares have fallen at least 20% or so from the highs they reached on the first round of teaser emails and newsletter recommendations from Taipan, and the emails continue to be churned out predicting several hundred percent gains by October, and more dramatic gains to follow. This one seems to me like more of a lottery ticket every day, even aside from the fact that the predictions of great oil reserves in Somalia are technically and officially “unproven” so far, but Somali politics may well cause more big moves one way or the other here in the coming days … or months … or whatever. Then again, someone wins the lottery every now and then, don’t they?

Here’s the original post from May:

This email ad came in for one of Christian DeHaemer’s Taipan newsletters (I didn’t click through to find out, I assume it’s Red Zone Profits or GRESSOR, though he may have others) and it refers to a special report that will be released “in three days” (the email is from yesterday, May 10).

And the Stock Gumshoe loves to jump the gun on these things, so let’s take a look.

It’s for a company that owns mineral and oil exploration rights in Somalia.

Stupid, right?

That was certainly my first reaction. But he of course backs it up by saying that this exploration is in Puntland, the “safest” part of Somalia, that is run by triabal chieftains and is somewhat autonomous from the Mogadishu government.

And the usual hyperbole: “This tiny 50-cent oil exploration company is, hands down, the single most lucrative investment opportunity I’ve seen in my entire life.”

My favorite part is the hint of conspiracy and international intrigue, as always:

“A band of bloodthirsty Somali pirates… a ruthless tribal warlord… a 900-ton cargo ship hijacked off Africa’s Horn…a fierce fire-fight in Mogadishu’s Bakara Market… a $25 billion bribery scheme… a suitcase full of crisp cool cash… and a tiny 50-cent micro-cap stock that could return 60 times your money.”

That’s a colorful quote! Sounds kind of like that Cameroon cobalt investment of a couple months back, eh?

“Tiny 50-cent “Oil Raider” Stuns Tribal Warlords … Black Hawk Down … Blood in the Streets … could be $8 by October”

Well that’s pretty much all the hints we’re given on this one … so can we crack it before DeHaemer releases his report?

I think you already know the answer to that question — this is the Gumshoe we’re talking about here! If I couldn’t crack it, I’d just pretend I didn’t get the email

This little 50-cent exploration company that has bought up mineral and oil rights in northern Somalia is …

Range Resources, Ltd. (RRS in Australia, appears to be RGRLF.PK on the US pink sheets)

They are trading at about 50 cents (Australian … 42 cents in the US), and they did make a deal with the autonomous chieftains of Puntland to acquire those mineral rights.

Now, before you run off to place your order (as if you’d be that impetuous!), there are a few things to note about this wee company:

I don’t know if it’s a great investment or a lousy one — I’ll leave that assessment to the professionals, I don’t even know if they have any earnings or history, or warrants, or whether they’re run by a pack of fools or a bevy of brahmin.

But I do know that their oil rights in Puntland are probably in some dispute, even as they have teams of people on the ground trying to find the old oil sites from when the majors were in Somalia, and maybe even doing some drilling by now.

A quick web search on the topic will be all you need to do in order to determine that the Mogadishu government doesn’t necessarily think the Puntland folks should be selling off these rights — they believe that the central government owns those oil rights, and may have already made a deal elsewhere. After just a few minutes I got very confused, but I am confident in saying that — at the very least — it’s worth a little research before investing in a company whose main asset is an exploration license in Puntland … or, for that matter, anywhere in Somaliland.

I don’t dispute that there’s oil in Somalia — I have absolutely no idea, though I know there was plenty of exploration there before the “Blackhawk Down” years — but I would be careful about assuming that any Somali oil wealth would flow right to this little company. It might, but I’m not ready to give them the benefit of the doubt without doing more research than I’m willing to put in right now.

If anyone else has looked into this one at all, please share. (and be careful — there are five or six different companies called something like “Range Resources”, including a big and unrelated one on the NYSE).

Happy weekend, everyone.

June 1 Update: FYI, I just posted some more info about Range and their partner in the Somalia exploration project over on the forum. There’s another company involved, for those who might like a different way to get at this investing idea (and one that hasn’t doubled in the last couple weeks).

Here’s another fun investment advisory teaser stock that’s been making the rounds of my email box — I first saw it several months ago, and the promise has not yet come to fruition (surprise!), but it’s still an interesting idea and an interesting company.

The promise is lurid, as usual — comparing this company’s potential to the returns of PetroKazakhstan’s 14,000% return.

But the novel approach is that they’re tying this company to the potential for arctic oil. As global warming opens up access to the arctic, more exploration and production of oil can be done there.

Like all good investment newsletter spam, it throws some impressive (and true, if not fully explained) numbers around:

“25% of the world’s oil is under the Arctic Sea”

“43% more oil than Saudi Arabia”

“Enough oil to supply the US for 135 years”

And the promise for quick returns on this top-secret company: “I do believe folks who get in now could triple their money by March.”

And, “the stock I’m now recommending has reached a ‘trigger point’ that could send it skyrocketing in the next few days.”

(FYI, this was first circulated in the fall, I guess … the company’s shares have actually gone down since then — doesn’t necessarily mean it’s a bad idea in the long term)

And to add some juice to the argument (and give us another clue):

“Fidelity Management, the nation’s largest mutual fund company, is accumulating shares of this stock at a rapid pace … 70 million shares”

There are also lots of quotes from reputable magazines and newspapers authenticating the fact that the Arctic is the “next frontier” for oil, and talking about how other big companies you’ve heard of, like Statoil and Gazprom, are exploring in this area, too.

And the final clues:

This company is a “little-known Canadian wildcatter”

They have interests in over 40 arctic licenses.

They’re the leading independent in the UK and Norwegian North Sea oil.

So … have you figured out who the company is?

All you have to do to find out is sign up for GRESSOR’s special situations subscription service and they’ll tell you all about this opportunity — in their words, “If you have even a few dollars available for immediate investment, I urge you to grab a piece of the tiny Canadian wildcatter I’ve been telling you about. It’s a near-certain triple by March.”

OR, just read the next paragraph:

ta da! It’s our friend, Talisman Energy (TLM) — a Canadian independent, to be sure, possibly a wildcatter depending on how you classify that. They’re not that small, bigger than $15 billion in market cap, but they do have the arctic licenses (and some Libyan exposure, which is another “edge” they’ve got according to some email spam solicitations).

Whether or not they’ll actually make any money from this, I have no idea — drilling in the arctic is a lot different than drilling in Saudi Arabia … or even in the deepwater portions of the Gulf of Mexico. The stock isn’t expensive, so while it probably trades more with the price of oil than on any promise of arctic discoveries, at least the downside is probably somewhat limited. Shares have been in a trading range of about $16-18 for close to a year.

So if you like the fact that they came up with this idea, or if their other mysterious technical indicators appeal to you, by all means look GRESSOR up and consider their subscription service. (Remembering, of course, that their “near certain triple by March” has had, depending on the price they were talking about last year, a maximum of about 10% upside by March 9 as I write this)

But if you just want to know the name of the company that they say will unlock the frozen treasure of the arctic, go to your friend the Stock Gumshoe, and enjoy doing your own due diligence on Talisman Energy.