“Big Oil Wants a Piece of His Pie”

Sniffing out "one of the most anticipated oil wells in Europe of 2014" from the Casey Energy Report promo

By Travis Johnson, Stock Gumshoe, August 19, 2014

The Casey Energy Report is pretty pricey these days ($995/year), and so it gets quite a bit of reader attention when they hint around about a hot new idea of theirs.

And so it was that your friendly neighborhood Gumshoe got a nice, full mailbox this morning with folks forwarding a story that the Casey folks call “The Billionaire Pizza Maker” … it’s one of those wonderful pitches that makes you feel like you’re in the room, sitting with Doug Casey and his billionaire friend around the wood-fired pizza oven, chatting about “the old days.” Sometimes, a copywriter who can build that kind of atmosphere in just a couple paragraphs makes you long for wealth even more than the one who shows pictures of the editor’s yacht and beachfront mansion.

So what’s the story they’re telling, and will it make us rich? Will we be hanging around supping wine and chomping fresh pizza with billionaire chefs? Well, let’s see what we can learn…

I won’t re-tell the whole spiel about the dinner Marin Katusa (he’s the one actually writing the letter) had with Doug Casey and our mystery billionaire (you can check out the “teaser article” here if you’re curious), but we do get a few clues about who this “mystery billionaire” is ….

“… our host for that evening makes his own olive oil, and it’s come first place two years in a row as the best olive oil in the world….

“His friends and inner circle include presidents of countries, the Hollywood A-list, and the most powerful business executives in the world. This guy defines ‘cool’ and ‘success,’ but he is so easy to chat with, it’s like hanging out with one of your oldest friends….

“Doug Casey is into skydiving, and as they say in that world, ‘He has 43 jumps.’

“As Doug was talking about his jumps, our friend pulled out a video of him jumping nearly twice the height of Doug’s highest jump.”

So that’s the first bit of clues, about our “billionaire pizza maker” … we’ll get to “his” company, the stock being teased, in a minute, but the billionaire in this case is Frank Giustra. You probably know his name, you almost certainly know his name if you’re Canadian — he founded Lionsgate Entertainment, and was instrumental in building a bunch of (now big) mining and energy operations, including Goldcorp and Pacific Rubiales. He’s probably best known now as a philanthropist, but he does also have his own olive oil operation in Italy (Domenica Fiore, in case you’re curious … and it has won awards).

And what’s his company? Here are our clues:

“… we recently sent out an alert to our Casey Energy Confidential subscribers on a company few people have ever even heard of. And some of the biggest names in the business are not just on the board of the company, but are also big investors, and at the same price as the Casey subscribers….

“Now, what about our Billionaire Pizza Maker?

“Big Oil Wants a Piece of His Pie

“He is drilling one of the most anticipated oil wells in Europe of 2014. One of the largest oil companies in the world, during their Q2 conference call, mentioned this project twice, more than any other project they are currently working on with a junior. Directly from the conference call transcript:

  1. ‘And looking into the second half of the year, we have some important wells coming up in XXXXXXXXX and, of course, the XXXXXXXX in XXXXXX subsalt.’ (Page 4)
  2. ‘On the Frontier program, we spent two years to three years building up the acreage program, two years to three years drilling it out. It has been, statistically, less successful than the Heartland program to-date. We’ve had success in XXXXXXXXX.’ (Page 18-19)”

They didn’t specifically say that the stock they just sent out an alert on is the same as the “Billionaire Pizza Maker’s” (Frank Giustra’s) Stock, but that’s the implication.

And they say that the big oil companies won’t “mess around” with Giustra — he’s been too involved in building too many big resource companies to be taken advantage of, apparently. And that “Big Oil” wouldn’t have mentioned the drilling unless it was the “real deal”.

And finally…

“We have gone into great detail in the Casey Energy Report on why your portfolio needs exposure to this company, especially before the drill results are announced by the end of the Q4 2014.”

OK, so … several months to go, no rush, take a deep breath and do not run off and buy this stock right this second. But the Mighty, Mighty Thinkolator does have an answer for you — this is Petromanas Energy (PMI on the venture exchange in Canada, PENYF on the pink sheets). And yes, it’s tiny, with a market cap under $200 million and not a lot of trading volume, so if you all run out and buy it and drive the price up I decline responsibility 🙂

And before I get any further, I should disclose that this sparked my memory — I still have a very small position in Petromanas warrants that I bought several years ago, back when I ran across the company as I was sniffing around some Mongolian oil stories and Petromanas was being spun out of one of the tangentially affiliated companies (Manas Petroleum), and I thought their Albania drilling might be exciting. They had a very bleak period for a while, including poor results that had them abandoning two of their Albania blocks (A and B) and the loss of some major investors, and I essentially wrote them off and ignored them and sold any equity I had in those companies, but held on to the small and nearly worthless warrant position. Come to find out, a wee bit of optimism has returned to these shares over the past year or so. The warrants have an exercise price of 45 cents and expire in February, so they’re still quite a ways from being “in the money” but now that I’ve had them called to my attention I guess I’ll keep on holding them — perhaps they’ll pay off if the news is very good (PMI would have to double to make the warrants worthwhile at this price, and there are only six months to expiration, so I could very well lose all of this position… but it’s small and I thought I had lost it years ago, so I’m not terribly worried).

Petromanas’ big deal right now is in Albania — that’s the XXXX’d out reference in the transcript quotes above. Their partner is mega-major Royal Dutch Shell (RDS-A or B), and the transcript is here if