Now this is an ad! I love the political baiting and the scaremongering, especially when it’s about the “Reds” — good stuff.

The ad we’re looking at, if you’re just back from a trip to the International Space Station and you happened to miss it, is from Christian DeHaemer for his Crisis Trader newsletter … he claims that the subscription price is $5,000, but it’s hard to imagine many folks have paid that rate — last Spring he was touting it at $995 “on sale” when he was teasing us about First Calgary Petroleum (which was bought out for about a 30% premium to where it stood when he tesed it) and for the last few months he’s been pushing it at a 95% discount for $250/year.

So … does $250 a year sound like a discount when you compare it to $5,000? If so, their marketers are raising a glass to you right now. DeHaemer is extraordinarily prolific, having driven several different newsletters, and he’s used some great teaser ads, so I’ve written about him a number of times — you can review a number of those superhyperteaserriffic writeups here if you want to stroll down memory late, the most recent one was for his EMN Initiative for Breakaway Investor, all about emerging market telecom plays.

(According to his teaser ads, by the way, the “EMN Initiative” was to “go live” yesterday, on March 31 … did you feel the earth shake?)

But these “Great Red Oil War” picks aren’t about emerging markets telecom stocks, of course — we’re talking about small oil and gas companies, for the most part, that might be takeover targets for Russia and China, or otherwise come into play as (if?) the “war for resources” heats up. This is the kind of story that DeHaemer has excelled at spinning for us over the last couple years, from oil investment in Somalia to the “gunboat basin blockade.”

So let’s take a gander at this new one, shall we? There are several stocks teased here, so we may be breaking this one up into a few bite-size chunks …

“Your Spoils of WAR: Three ‘Target’ Companies Strategically Positioned for Gains of As Much As 183 Times Your Money

“These are the three petroleum companies that I’m certain the Great Red Oil War of 2009 will send soaring — no matter which Communist superpower wins it (more on exactly how this could happen below)…

“Your portfolio could be soaring, too, if you’re holding their shares.”

So that’s the shorthand version of the argument — China and Russia are either collaborating and squeezing out the US, or they’re competing with each other to acquire more resources, either way these particular small resource companies should be big winners, we’re told.

Here are the clues we get for the first one:

“RED PROFIT TARGET #1: An Africa-focused driller with an ace-in-the-hole

“Unlike a lot of petroleum companies that are struggling to generate exploration and expansion dollars in an economic climate in which oil and gas are selling for peanuts, this regional player is in solid financial shape — with huge assets and estimated 2008 revenues that jumped 78% over 2007…

“They’ve got projects in key oil zones of Africa: Nigeria, Gabon and Cameroon. But perhaps more compelling than this, they’ve also got an ace-in-the-hole: a coveted oil exploration license for the Kurdistan region of Iraq…

“… the fledgling Iraqi republic must be made commercially viable as soon as possible. That means the aggressive drilling and selling of oil…

“The lucky few companies that have exploration deals for this coveted, oil-rich region (like two of the three firms I’m revealing to you now) are almost certain to strike it rich, starting this year.

“You’ll have to move fast if you want a chance at the best gains on this one, though. A foreign takeover may be brewing right now.

“According to a February 13th Reuters article, this dynamic petroleum company:
‘… has received buyout interest from Chinese, Japanese, and Indian energy firms, according to three sources with direct knowledge of the matter.’

“A takeover should mean at least a fast 100% in gains, or maybe a lot more …”

So … we feed those goodies into the mighty, mighty Gumshoe Thinkolator … and the answer is:

Addax Petroleum (AXC in Toronto, ADXTF on the pink sheets)

Here’s that Reuters article about the big companies sniffing around for a possible takeover (including CNOOC, Mitsubishi, and some Indian firms).

Addax is a fairly large company, compared to many teased by DeHaemer over the years — their market cap is up around three billion dollars, so this is not a tiny boom-and-bust company. Still may boom or bust, of course, but less likely to do so based on one drilling result or piece of news.

The share price is a bit over US$21, and has been fairly resilient this year — down from the oil-craze highs of $50 or so last Summer, but solidly up since the October and November lows. They have some interesting leases and exploration areas, including some areas offshore Nigeria where they’ll start exploratory deepwater drilling late this year, and they do have the other teased African holdings, and the exploration

Earnings for 2008 ended on a weak note, largely because of the lower oil prices in the second half of the year, but they still reported earnings of over C$5 a share for the year, and paid a 40 cent dividend (both in Canadian dollars).

The shares seem to be very sensitive to oil prices, which shouldn’t be any surprise, and they are certainly investing in their future production — that deepwater drilling program is just part of a pretty large capital expenditure program that they expect will have them investing about C$1.6 billion in 2009, a lot of it in the first half of the year. Here’s a quick article about their last earnings release.

Addax is pretty well established in West Africa, with most of their current revenue coming from Nigerian reserves, but they’re trying to expand a bit — likely further into the Middle East (especially Iraq), and in North Africa (Algeria, Egypt and Libya).

Their Kurdistan work is focused primarily on the potentially large Taq Taq field — they just announced some drilling results a couple weeks ago, and they continue to think this will be a very promising project. Addax has been working in Kurdistan for several years, but we’re still talking about an area of some volatility, and, perhaps more importantly, an area where there’s always plenty of potential for dispute over who owns, sells, transports, and benefits from the oil. There was an interesting brief article on this a couple weeks back — it may not focus on Addax directly, but it’s worth thinking about potential oil conflicts between Baghdad and Kurdistan.

So … an interesting oil company, as so many of DeHaemer’s picks are. Will it be snapped up by the Chinese? That’s anyone’s guess — they seem to be potentially “up for sale,” at least for now, but I assume that any bids will depend heavily on where oil prices are going. In the meantime, they are producing oil and making money, so they’re not entirely speculative, and they’re exploring, looking for new leases, and spending pretty heavily on increasing their reserves … a good starting point, at least.

And I’m going to have to push off the other two companies, I’ll share the stories and tickers on those tomorrow. But just to leave you with one other quick idea of what DeHaemer says he likes to look for, he did say that there might have been a fourth pick — if it hadn’t already gotten scooped up:

“They bought my fourth target firm on 2/26/09”

That would be Verenex, a company whose main asset is (was?) some key concessions in Libya. This stock was teased years ago by a different newsletter, for the same reason. (I don’t know if DeHaemer ever recommended Verenex before it was bought out, but he didn’t tease it in his ads as far as I noticed).

The buyout of Verenex by “the Chinese”, by the way, may be in doubt — Libya looks like it’s going to be exercising it’s right of refusal to pick up the company (or at least, the valuable Libyan part of the company). But that’s neither here nor there, they’ll pay the same price so it probably still works out fine for Verenex shareholders (as long as they bought within the last six months or so)

Let us know if you’re interested in Addax, or have any opinion to share with a comment below … and of course, if you’ve ever subscribed to Crisis Trader, click here to offer your opinion in a brief review. Thanks!