We start the week with one that will neither shock nor amaze, though that doesn’t mean it’s not an intriguing investment possibility.
I thought I’d take a look at this one because the latest teaser emails tell us that now is our last chance to subscribe to the newsletter and find out all about this secret, shocking oil story before the story hits the mainstream press and the investors pile in, bringing profits raining from the skies. Or something like that.
It is, of course, simply a rehash of the oil sands story we looked at a couple months back, from Matt Badiali at the S&A Oil Report … if you’ll remember, this was teased as the “oil sands story 60 minutes missed.”
If you like to have the full Gumshoe experience and want to read my endless blather for a bit longer, you can go over and check out the original writeup of this teaser.
It’s OK, we’ll wait. No, go ahead, really!
Back with us?
OK, then this won’t be a spoiler: The teaser is still the same, this is still an email touting our old friends Oilsands Quest (BQI).
They are still owners of a big plot of potential oil sands production area in Saskatchewan — that’s the part the 60 Minutes purportedly “missed” when they ran story a year or two ago about the oil sands and focused on Alberta. Alberta, just to the west of Saskatchewan, is of course where most oil sands production in the world is taking place (assuming you don’t count Venezuela’s heavy crude as “oil sands”). And Saskatchewan, being separated politically but not geographically from Alberta, of course has a lot of the same stuff underfoot, at least in parts. And has been a big energy producing province for some time, though that’s mostly been conventional oil and gas.
So why on earth is this our “last chance” to get in? I own some options on BQI, as I disclosed last time I wrote about them (haven’t sold them yet), but I don’t know that there’s necessarily anything specific that we’re going to hear about the company in the next few months. Others follow this company more closely than I do, but here are a few of the potential things that might happen over the next few months, as far as I know:
They will have some physical progress in September on the next “phase” of their project in Axe Lake, but this will still be very much a demonstration project — they’re aiming to do their first steam injection well in September, essentially to see if the technique works.
They’ll release more data about prior testing sometime in the next “few months” which will include more details about the bitumen in their various test drilling sites in the area, though they’ve already given the basic update of their Winter drilling program — so far the drilling tests seem positive, they’ve been continually expanding the size of the project.
They might finally get involved with a larger company that has the funding to move their projects into production. This is probably the biggest catalyst that many investors seem to be looking for now, some kind of joint venture, buyout, merger or partnership.
And finally, many folks seem to think that a listing on the Toronto Stock Exchange would be a big step forward for BQI. They’ve applied for such a listing, though that was many months ago, and as far as I know they still are trying to get it, I have no idea why it might be delayed. Though I see no earthly reason why it would make that much of a difference, there can’t be many institutional investors who care that much whether it’s listed in the US or in Canada (unless there are some tax or investment rules for Canadian pension funds that I’m unaware of). If you’ve got another reason why that should make this company more valuable, feel free to let us know.
So … is BQI going to go off like a roman candle? Seems not that terribly likely to me, though I’ve bought a few lottery tickets in the form of options mostly because I think there’s some significant potential — particularly if a larger oil company wants to buy into a (possibly) big oil sands holding, and I think it’s certainly possible that any good news on the partnership front could move the shares significantly, since $120 oil, surprisingly enough, wasn’t able to give the stock much of a boost. We’ll see.
And if you’re one of those who follows this story more closely than I do, feel free to share your two cents. Or even three, what with inflation and all.
Personal Capital is an advertiser with Stock Gumshoe, but Travis also uses it every day for his personal accounts and finds it invaluable. Here's what he said: "They offer a great (and genuinely FREE) 'second opinion' for your financial plan, but what I love most is their automated financial dashboard -- it will look at all your assets and debts, tally up your asset allocation, project where you'll be at retirement, and suggest ways to manage risk or improve returns. It's free, I think their free tools are great, and I think it's worth checking out -- you can do so here.