[update: Yeah, as of late September we’re taking back this admission of a mistake — we were right all along, the Casey folks just threw us off with a red herring, as is clear in the subsequent ads that they are now using to pitch this same idea, now looking at mid-October as the time when results will come in after the initial drilling hit some trouble and delays. I still don’t own the stock as of September 26 and haven’t traded it, and won’t until at least October]
I originally wrote an article about this Casey Energy Report tease following the first wave of teasers from the Casey folks, on August 20 — since then, they added some more detail to the teaser pitch that made my solution not fit, so we’ll take a mea culpa and accept this as our mistake for 2013. I’m willing to release one incorrect teaser solution each year before I begin the process of self-flagellation, so we keep our 99%+ accuracy rate but, as always, we are not infallible.
So what’s the story? The Casey folks had a pitch for their Casey Energy Report about the “Next Bakken” — a very early stage exploration company with a large land position and expected drilling results in mid-September. These are the clues they gave initially in their first teasers:
“Over the last year this little company has quietly assembled a 2-million-acre concession in a region whose geological conditions for the production of oil and gas are actually far more promising than those in the Bakken….
“In July, one director of the company, who is also the CEO of a major Canadian oil player, bought 200,000 shares at the market – bringing his holdings of the company’s stock to a total of 1,235,237 shares.”
Which pointed the Mighty, Mighty Thinkolator directly at PRD Energy (PRD.V, PREGF) — they’re working on rejuvenating oil production on about two million acres, using unconventional technologies (horizontal drilling, etc. — I guess we have to start calling those “conventional” now). And more importantly, we had an exact match on those shareholders, here’s what I wrote three weeks ago:
And yes, they are expecting to have short-term results from their first well, which they call Boerger 7A, in mid-September — so the September 16 projected catalyst fit as well. That well is a farm-in they’re earning on a GDF Suez property, and they hope to use this drilling to acquire more data about these kinds of reservoirs as well as earning in their 50% share of the project by spending the money required to drill and get seismic data.
So … sounds like a perfect match, right? Marin Katusa, a Casey analyst, has even recommended them in the past, and he has written in the last six months that he’s looking at “next Bakken” opportunities in the heart of Europe, which would also connect us to PRD. I was convinced.
But then some versions of the ad changed up a bit. The original version is still the same, you can see it here — the same ad they pitched started on August 20, as far as I can tell. Still a perfect match for PRD Energy.
(Back in April, Katusa said: “we believe that we have a company in our portfolio that is just as good: a junior exploration company that is sitting in the heart of Europe. By applying new technology to old fields and old wells, it may very well be sitting on the next Bakken.”)
But dammit if they didn’t throw in another clue in a separate letter that was sent out several days later — that second letter took away the reference to the insider buying but kept the two million acres, and added a clue that conflicted with my first answer. You can see the second version of the teaser pitch here, it’s not up on Casey’s site but someone else published the email. Here’s the offending paragraph:
“Until the company has completed its flow tests and made a public announcement, other than saying it’s in the Southern Hemisphere, we can’t share any details