This article originally appeared on August 14, neither the article nor the ad I cover here have been updated or changed, but the ad is rolling again and generating questions from readers so we’re lifting it to the top of the page for you.

—-from 8/14/14—–

I didn’t look at this pitch right away, since my memory of Keith Kohl’s “Petroplex” story from January was pretty strong and I assumed he was just re-touting the same stock — but no, he’s got something different this time.

And just to warn you up front, this is one of those rare occasions when I might not be able to give you a definitive answer — the clues just aren’t quite specific enough to be absolutely sure. But the Thinkolator and I will do our level best.

The basic spiel is that the “Petroplex” is returning — that’s an old name sometimes applied to the Midland area and the Permian Basin in West Texas, home to many huge oil producers in decades past but thought “dried out” for years… until the last few years, when horizontal drilling brought the explorers back to Midland as they developed ways to get at the Cline, Wolfberry, Spraberry, Wolfcamp and other shales (there are too many names, too many different depths and areas, but there are thick, oil-filled shales in the Permian Basin). Back in January the clues were also a bit thin but we concluded he was probably teasing Callon Petroleum as his $8 “Petroplex” stock… now, he’s gotten even tighter with the clues and he’s pretty much just telling us that he’s touting a $1 “Petroplex” stock that holds the key to Permian riches.

So… can we figger it? Or do we have to open it up to the great Gumshoe faithful to throw their guesses on the pile? Let’s see.

Here’s the intro from Kohl, in case you missed the ad:

“New Oil Shale Field Could Be Largest Ever Discovered in the U.S.

“Project ‘Petroplex!’ …

“Hundreds of drill sites are being cleared… crews are moving in… and initial wells have been so prolific that Forbes Magazine recently said, “They’re producing more oil than the pipelines can handle….

“The Petroplex peaked in production between 1973 and 1974, as predicted by Shell geologist M. King Hubbert.

“At its height, it was pumping out over 1.7 million barrels per day.

“When it peaked, it marked the end of American oil domination and ushered in OPEC… and for the next 40 years, OPEC would have a stranglehold on the world’s energy economy….

“A lot of things have changed — and quite dramatically…

“Thanks to the American revolution in hydraulic fracturing (or fracking, as it is popularly called), the Petroplex is about to regain its stature in the global oil market.”

OK, so plenty of folks agree with that — and production is climbing dramatically in the Permian, led by many of the big domestic producers you’ve heard of (Occidental, Apache, Chevron, etc.)… and lots of oil folks have been trying to gather up acreage anywhere close to Midland for the last several years.

So which one of the (presumably smaller) companies is Kohl teasing for his Oil & Gas Trader service?

Well, this is what he tells us by way of clues about his special report, “Profit from the Petroplex: The $1 Driller That Will Help America Reach Energy Independence”:

“If history repeats itself (and it almost always does), this $1 Petroplex driller should be trading 10 times its current per-share price in a few months….

“I want to tell you about one company that has been there since the beginning — and is already selling its Petroplex oil to the market.

“It controls nearly 20,000 gross acres of the Petroplex — enough land to blanket the entire city of San Francisco three times.

“As you read this, the company is selling its oil into the market.

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“No wonder insiders have been buying the company’s stock all year.”

Obviously, the stuff in the email about this teased company having “a stranglehold on its production” is ridiculous — no one has a “stranglehold” on producing oil in the Permian basin, which is full of drillable inventory and has lots of infrastructure, and certainly a tiny little company with less than 20,000 gross acres doesn’t have a stranglehold on anything… except perhaps for their own acreage (Pioneer Natural Resources has roughly 900,000 gross acres, several other biggies like Apache have hundreds of thousands of acres in the basin). But that doesn’t mean it can’t be an interesting company.

If we can figure out which one it is, that is.

And, more generally, he says this about what kinds of stocks he’s looking for:

“The successful trading strategy I’ve learned throughout the years investing in energy stocks is that the time to buy an oil or gas company drilling in a new shale formation is when:

1) Production is just starting;

2) Initial wells are showing great results; and

3) The mainstream investing public knows very little about it.”

So… are we ready to guess? $1 stock with “almost” 20,000 gross acres somewhere in the Permian basin. “Gross acres,” by the way, refers to the whole land area on which they have an interest — “net acres” incorporates the percentage interest (so if a company had a 50/50 joint venture on 20,000 acres they would have 20,000 gross acres and 10,000 net acres).

And guess it will have to be on my part, I’m afraid, the Thinkolator — mighty as it is — can’t be definitive or even close to it this time around. So I’ll just leave the Thinkolator in the garage to spare it the embarrassment and give you my guess: I think this might be Lynden Energy (LVL in Canada, LVLEF on the pink sheets).

Lynden is a stock that has come up before both here and elsewhere — it was teased by Frank Curzio for his Phase 1 Investor letter last year (don’t know if they still recommend it, they might have stopped out when it dipped early this year or changed their minds) and it’s been recommended in the past by Keith Schaefer for his Oil and Gas Investments Bulletin (he said in an interview recently that he still likes it, and is looking for catalysts from their current drilling or possible asset sales).

And yes, it’s trading around a dollar (it’s been between 70-90 cents for most of the past two years), and showed a bit of a price spike on relatively high volume trading over the last couple weeks (which often indicates, in the absence of other news, that a newsletter might have recommended the stock or it got other media attention). And they do have a bit under 20,000 acres of gross acreage (~16,750 gross acres — was close to 19,000 before they did some small asset sales to Breitburn over the last couple years) in the Midland Basin and production from the Wolfberry Shale there — though, in one chink in the argument for Lynden as a match, they have another 104,000 gross acres on the Eastern Shelf that most would probably consider part of the Permian (if not the midland) basin at their Mitchell Ranch project.

If you’re curious about this one, there was a pretty good and thorough “pro” piece on SeekingAlpha about it a little while ago that’s now freely available — that author argues the stock could triple to close the valuation gap (per acre) with other stocks in the area.

And yes, there has been some insider buying as recently as this Summer — mostly by the Chair — and JVL Advisors (Jon Vincent Lovoi, who runs several energy funds) has increased its holdings a bit over the last year or so and is nearly a 20% owner. There’s also been some insider selling and option exercise/sales (from the other execs), but overall there’s been more buying.

Lynden has some investors quite impatient given the long time it’s taken them to get results from Mitchell Ranch, which is their largest area and where the potential for larger returns might come from if there’s some great production — but there is perhaps a catalyst coming in those ongoing drilling projects. You can see their latest update in this press release, essentially no results released yet but they have drilled one well through several potential pay zones and have a couple more wells drilling now or to be drilled in September. So something seems likely to happen in the next few months — speculation from Keith Schaefer has been that they might sell their relatively steady Wolfberry production and Midland Basin acreage, which is something like 6,000 net acres, to focus on the potential of Mitchell Ranch, but I imagine they’d want to prove up Mitchell Ranch first if that is indeed their intention. All of this is partnered with CrownQuest, which is the operator.

So it should be an interesting couple of months for Lynden Energy — they’ve already run up a bit, whether because of that Seeking Alpha article or because of possible attention from Keith Kohl or just because of anticipation about their drilling results, I dunno. But that’s my guess — if you’ve got a better one, I throw myself at your mercy and leave it to you to describe your guess. Enjoy!