Seven Year Blockade Lifted from “Gunboat Basin”

by Travis Johnson, Stock Gumshoe | December 10, 2007 4:38 pm

Once again, Streetsifter has scooped the Gumshoe and written up another one for you, this one on a way to “profit from Exxon’s misfortune” and “turn $4 into $45” — just when the Gumshoe runs short on time, our friend Streetsifter seems to pull a great nicely-summarized sleuth job out of his hat for all of you. The following are mostly his words, with a few edits and minor additions:

The latest teaser ad for Christian DeHaemer’s Crisis Trader has all the necessary elements for a Hollywood action film, to the point where the copy writer must have been licking their literary chops as they composed the ad.

You can imagine the Hollywood agent giving the pitch to the A list movie producer. “The picture opens with this drill crew for a small Canadian energy company trying to commence operations of the coast of South America under grants from Undisclosed South American Country “A”, when suddenly gunboats from neighboring Undisclosed South American Country “B” show up in the middle of the night and force the drillers to evacuate, claiming the site falls within their territorial borders!” Then Country B tows the drill rig from the disputed waters. The two countries amass their military forces along their land border (but they’re small countries, so there’s not many forces to amass), and our offshore drilling crew is prevented from performing any work at ‘Gunboat Basin’, where an estimated $1.35 trillion in oil and gas lies beneath the ocean floor!”

Our imaginary Hollywood agent’s voice becomes more animated, and the producer listens intently as the pitch continues. “So now we segue seven years into the future, and the two countries have finally agreed to turn the dispute over to the United Nations international court. The fate of our Canadian energy company hangs in the balance as the court announces their unanimous decision. And the winner is . . Country A! The energy company now has rights to proceed with offshore drilling operations, and the major oil companies are likely to start a bidding war that will propel the tiny company’s stock, currently selling under $4 per share, up to as much as $45 dollars per share or more!”

And your price of admission for Mr. DeHaemer’s action packed “Gunboat Basin” adventure is a “special rate” subscription fee of $1,750, instead of the usual $5,000 fee. But, if you’re a regular Gumshoe reader, you already know that we can arrange a special pass to this feature at a far more reasonable rate.

Working off tips provided on the Stock Gumshoe Forum by Womanwithportfolio and by paid-up Gumshoe Irregular[1], Streetsifter, the Thinkolater comes up with:

CGX Energy (CGXEF: OTC or OYL.U on the TSX)

A press release[2] from the CGX Energy website fills in the blanks from the teaser, stating, “the International Tribunal on the Law of the Sea (ITLOS) award on the maritime boundary dispute between Guyana and Suriname was released at 4:0 pm EST September 20, 2007.” The press release continues, “The decision is extremely positive for CGX, as it concludes that 93% of CGX’s Corentyne Licence and 100% of our Georgetown Licence are in Guyana territory” and it also provides confirmation of the gunboat incident, “In June 2000, a jack-up drilling rig leased by CGX from an American drilling contractor and operating under licence from the Government of Guyana was forced off its Eagle drilling location by gunboats from the Surinamese navy.”

The DeHaemer teaser compares the potential gains for CGX to those of another Canadian oil company, PetroKazakhstan, that was taken over by China National Petroleum Corporation at $55 per share. In bold print, the ad says the CGX is sitting on 30 times as much oil at PetroKazakhstan. CGX’s over-the-counter shares closed at $3.08 last Friday.

But the Gumshoe has covered other DeHaemer mining picks in the past, including Range Resources[3], which is down 10% since being added to our list of solutions (though “down 10%” is perhaps not a descriptive enough assessment of the wild volatility that stock has shown over the last six months — check out the chart and the announcements from the Somali parliament over the summer if you want to watch a crazy mover that follows wildly unpredictable news).

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The GHX website includes a disclaimer, “There have been oil and gas shows in many of the 30 wells that have been drilled offshore Guyana and Suriname, but no discoveries. As a result, there are no hydrocarbon reserves attributable to these properties, only an estimate of resource potential based on wellbore and seismic analysis, and analogy to known reservoirs in the Atlantic margin”. And since the UN ruling only was issued in late September, it will be some time before the company can even commence drilling, much less actually extract oil. This may put GHX in the “lottery ticket” category for investors.

As always, you should perform your own due diligence, and anyone with insight to Guyana offshore drilling operations is welcome to share their knowledge on the Stock Gumshoe Forum. Thanks once again to Womanwithportfolio and Streetsifter for their contribution to this solution.

  1. Gumshoe Irregular:
  2. press release:
  3. Range Resources:

Source URL:

  1. Avatar
    Dec 17 2007, 07:18:00 am

    In spite of its small size CGX may have a future since it recently succeeded in raising capital ($30 millions)which will allow to drill at least one exploration hole if the funds are not wasted elsewhere. Or it may get a good offer to sell the rights to the exploration acreage by a big oil company.
    A common series of pitfalls affect most penny stocks touted by teasers especialy (but not uniquely) small canadian mining & oil exploration companies. A careful reading of annual reports can give a partial idea of how some significant fractions of funds get into the pockets of the insiders before any exploration is carried out. There is of course the case of the very cheap stock options acquired by the insiders before a touted public stock offering has raised the share price. Even if there is a compusory holding period for the optioned shares there is a practice by insiders to short the stock after the offering while the share price is still high & before it starts to decline.
    An other instance of syphoning funds is to pay substantial sums for “services” to private companies owned by officers or directors of the company (GCX is a case in point). The touting is also a possible way of dissipating funds since many small companies resort to compensating with cash or with shares individuals or specialized PR firms publicising the assumed investment merits of the shares. Some of these firms & individuals do publicly aknowledge that they “may” be biased in their recommendations as a result of this compensation. But not all.
    So I concur with your advice in always relying on serious DD before investing.

  2. Avatar
    Dec 18 2007, 01:48:00 am

    I got the teaser from Christian De Haemer. Both you and he indicate the stock is under $4.00. He doesn’t reveal the Symbol, but you tell us it is (CGX), but I looked up the quote on my TD Ameritrade account, and it is $42.62 a share, todays close!

    What gives here?

    I was willing to buy a 100 shares @ $4.00 or less, how did it get to $42.62, or is there another symbol for a subsidiary or something.

    Morris Johnson

    I would really like someone to send me an explanation of this.

  3. Avatar
    Dec 18 2007, 02:14:00 am

    Hi Morris — the company is named CGX, but it trades on the pink sheets at CGXEF.PK if you’re in the US. On the Canadian exchange the symbol is OYL.U (yes — I assume that’s “oyl” as in “Olive Oyl”, for you Popeye fans out there). The company with the ticker symbol CGX in the US is Consolidated Graphics, which I suspect is the one you ran across.

    Price of CGXEF is around $3.50 last time I checked.

    That doesn’t mean it’s worth an investment — I know nothing more about it and don’t have an opinion on this one, but of course that’s a decision you can make for yourself.

  4. Avatar
    Mar 10 2010, 01:59:54 am

    I think that you ought to look into CGX again…Things are starting to move : Tullow oil, Shell, Total & others have moved into the region and last week the US Government sent a delegation last week to “help” Guyana manage their futur oil income.
    They put Guyana on their list of “next decade oil & gas producers”.

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