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2017 “No Brainer TRUMP Presidency Pick”

Myron Martin proposes a solution to Keith Schaefer's Promo for a Trump Opportunity

By takeprofits, January 4, 2017

[ed. note: Travis is passing the keyboard to Myron Martin for a quick note today — Myron has usually focused on researching junior mining stocks for the Irregulars, but he sent in this teaser solution that he thought more readers would like to investigate. We have not looked into the stock being teased beyond what Myron writes below, but feel free to join the discussion with a comment if you have an opinion. Thanks for reading!]

I read Keith Schafer’s bulletins regularly because I consider him one of the most knowledgeable oil and gas analysts in the business—a straight shooter who has made millions in that business. I know Keith and have met and talked with him on several occasions and trust him as honest and sincere. If and when I have enough capital to diversify into oil and gas big time as he does, justifying investing in his service, I will probably do so. I agree with Keith that oil and gas companies with good acreage in the Permian Basin are the current profit centre for energy.

As he notes in his latest teaser ad:

This company is a direct bet that the Permian Basin in Texas will be the most active place for drilling in the country. There is no doubt that the oil industry will make Swiss cheese out of the Permian – drilling thousands of wells.

That’s because the Permian Basin is by far the most profitable oil play – in the whole western world, really.

This promo is my real centre of interest because Keith has been running a similar ad for several months now that sent me on a “wild goose chase” looking for a small company with huge drilling potential in the Permian, where I myself owned several stocks that have done well. I don’t consider it a waste of time because I have found some interesting stocks I will report on in future. However, about half way through Keith’s promo for his newsletter I realized that while I had not found a perfect fit for his Permian based stock, since the election of Trump he has added more clues and now calls his micro cap play in effect his “TRUMP CARD” that a Trump presidency can turn into another ten bagger like his previous wins in the sector.

He says:

Trump’s energy plan is so simple. It involves a lot less red tape… And a lot more drilling. President Trump wants to unleash the full potential of the American shale industry.

Trump has laid out 7 key elements in his “America First Energy Plan”. Every one of them is tied to the exact same theme. The United States is going to drill for oil like there is no tomorrow. That creates The Trump Opportunity.

You really need to listen to his video in full to get the whole story so when I disclose the name of the company he is touting you will be able to check my research to verify I have identified the company correctly. Actually, as soon as he mentioned “frac sand” (a new clue added since earlier versions) I knew what company he was touting:

I’m still not bullish on oil prices. But I am bullish on another commodity. It is a commodity that is closely related to the oil business…That commodity is sand—as in fracking sand. A very specific type of sand that is not found in many locations.

This sand is the single most important ingredient in getting oil out of shale rocks…Frac sand is a commodity that is going to see explosive demand over the next 10 years….

My Micro-cap Trump Opportunity has more going for it than just being in the right industry. It has the most highly coveted type of sand…the very best sand to use.

In fact I already owned the stock based on my own research. Keith boasts about doing a lot of fundamental research, spending a great deal of time and money, and I can say the same, the difference being his is focussed on energy and mine on metals.

Keith ties it back to the location here:

This frack sand company not only has the best sand—it has the best location. Almost ALL frac sand used in the Permian comes from… Wisconsin. That may as well be The North Pole. My Micro-cap Trump Opportunity can beat every competitor when it comes to cost—because it’s A LOT closer to the Permian.

The company in question is Select Sands Corp. (SNS.V, SLSDF). Here is a press release that covers the essence of the company’s situation that fits all the clues given in Keith’s promo. I recommend that in doing your own due diligence you check out their website and read other recent press releases.

As per agreement, I will not trade in this stock for at least 72 hrs after this appears in print so you have an opportunity to grab some shares before I increase my stake. With Keith’s considerable following, the stock is bound to rise as the company ramps up production and becomes better known. With a micro cap like this that is still more of a speculation than an investment, I recommend that you put no more than 1% of your available capital into this stock initially. Build your position progressively as the company ramps up production and sales through the next year, so that concentrated buying does not drive up the price to an unsustainable level ahead of the fundamentals of the company’s natural growth.

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Fabian
Fabian
January 4, 2017 2:08 pm

I’m long SLSDF. Schaefer is a smart operator but very speculative. No Exxon in the portfolio. So far so good with SLSDF. He made me buy FCAU at 6 now above 9.

rubber
Member
rubber
January 4, 2017 2:27 pm

Fracking is not cost effective if oil remains below $60, lots of companies went bankrupt. If Trump opens up the floodgates we will have too much oil around causing the prices to drop further.

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DK
Member
DK
March 22, 2017 5:24 pm
Reply to  rubber

Fracking is currently break-even at about $42 a barrel. With continuing cost improvements, some see that floor dropping to $30.

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Travis Johnson, Stock Gumshoe
March 22, 2017 6:18 pm
Reply to  DK

That’s a decent average, from what I’ve read, but it depends a lot on where you are — can be $25-30 in parts of the Permian, $60 or more in parts of the Bakken.

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Rog C
Member
Rog C
January 4, 2017 2:36 pm

It is select sands. Way back in April 2015 he actually named it as it was an advertorial. Ie he was paid to promote it. It was only 35 cents then! Here is his spiel
30.4.15 cropped-OGIB_Co-Sponsorship-D7A671 2


Texas Oil Producers are Drooling Over This
Advertorial by Keith Schaefer

Frac sand is all about location. Location-Location-Location.

And Select Sands (SNS-TSXv) has a superb location for its new Tier 1 frac sand deposit in Arkansas—almost right over top of the Fayatteville Shale, and 650 rail miles closer to Texas than Wisconsin, where almost all the other Tier 1 sand is produced in North America.

corp

Even before he is in production, CEO Rasool Mohammad says his phone is ringing constantly as both energy producers and OilField Services (OFS) companies are calling to ask about his new deposit—called Sandtown. He has literally been offered contracts before he can deliver any product.

That’s how desperate the Market is for high quality Tier 1 frac sand close to Texas. Frac sand is the #1 reason well productivity continues to increase in North America.

In August 2013 Whiting and EOG experimented with using short wide fracks—and basically doubling the amount of sand per well—instead of long skinny fracks. This new method increased production dramatically then, and producers are still—almost two years later—increasing the amount of sand they use per well. Frac sand is the last place oil and gas companies want to cut spending.

Select Sands (SNS-TSXv) gives a great opportunity to patient investors who like groundfloor investments. There are LOTS of catalysts near-to-medium term.

This is a stock with only 42 million shares out and trades at 35 cents.

So far, Mohammad has proven up the quality and size of the Sandtown deposit with over a dozen drill holes. The deposit is sitting right at surface in many places, and goes down over 100 feet, giving it lots of size. For the geologists, the deposit is in the St. Peter Sandstone formation, which is the same as the Tier 1 “White Sand” that comes from Wisconsin.

The Sandtown sand has been tested by Stim-Lab, one of the best and well-known companies in the business and results of the two main sizes of frac sand– 40/70 and 100 mesh—met or exceeded the Tier 1 frac sand specs.

(In fact, the sand was such high quality it could be high-graded and used for a lot of industrial uses, like making glass. Several frac sand suppliers sell as much as half their product to the glass industry. Low energy costs in the US are bringing back a lot of glass industry; but that’s another story.)

So Select Sands HAS the goods. And it has the business model to make it all work for both industry and shareholders.
And the biggest part of that is…Location-Location-Location. Their deposit is 650 rail miles closer to the Big Shale Deposits in Texas—the Permian Basin and the Eagle Ford.

Now, these two massive oil plays represent 38%, or 18.777 million tons, of the total 49.7 million tons of proppant (another word for frac sand) consumed in the entire USA in 2014. These are the basins to which SNS is closest.

These are also the basins that are seeing the largest increase in frac sand intensity—the amount used per horizontal well. Overall in the USA it was up 27% per well, but in the Eagle Ford it was up 33%, and in the Permian by 38% (Source: NavPort)

Commodities logistics firm PLG Consulting said that transportation and warehousing can account for nearly two-thirds of the delivered price for frac sand. Being half again as close to market gives the Sandtown deposit a huge leg up on its Wisconsin competitors.

Select Sands estimate their sand can be delivered to the Eagle Ford for as much as $15-$20/ton cheaper, comparable Tier 1 sand from Wisconsin. And of course, with a lower oil price producers are looking to scrape costs to the bone—and Select Sands just threw them a bone.

While the rig count is now down some 50% from the peak of late 2014, frac sand demand is expected to be down only 25%–with most of that drop coming from lower quality sands. I expect Tier 1 sand to continue to have a healthy market, though at slightly lower prices than 2014.

There are a couple other minor trends working in Select Sands’ favour. One I mentioned earlier in the week—there is a big “fracklog” of wells that have been drilled but not completed or fracked. That is low hanging fruit for the industry if the oil price moves up.
The second is that a premium product–ceramic proppants—a more expensive competitor to frack sand—are not being used as much now. That’s creating some extra market share for Tier 1 sand.

Successful frac sand stocks are greatly rewarded by the Market. From August 2013 to the peak in late 2014, the Market took the three largest US frac sand suppliers to over 20x annualized cash flow at the peak.

Those three stocks (HCLP, SLCA and EMES) made investors 450%, 600% and 835% respectively over three years.
Junior stocks did even better—witness Canada’s own Athabasca Minerals (ABM-TSX) going from 25 cents to $3.20 in three years—a 1280% move.

Select Sands (SNS-TSXv) has the potential to follow these stock charts. The asset is there. The business opportunity is there. As management executes a simple business plan, the Market will reward them and shareholders.

Management has sponsored and reviewed this article.

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michelg
Member
michelg
January 4, 2017 4:36 pm

The power of the Gumshoe! 🙂

1.41 +0.12 (9.30%)
Jan 4 – Close
CVE data delayed by 15 mins – Disclaimer
Currency in CAD
Range 1.23 – 1.41
52 week 0.20 – 1.41
Open 1.30
Vol / Avg. 870,984.00/286,263.00

tropicanaoj
tropicanaoj
January 4, 2017 5:14 pm

While I am continually tempted to make a few speculations in the oil/energy industry, it seems to be more of a political environment than a logical one. Quality find in SLSDF, but I see the oil markets sliding further for a number of reasons. That said, I will add to my watch list. Thanks Myron

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rocketman
rocketman
January 4, 2017 9:56 pm

I was reading somewhere that technology keeps dropping the costs of fracking and soon a lot of these companies can be profitable with oil at $30. I’m definitely interested in this stock.

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martinc
martinc
January 4, 2017 10:45 pm

I’m with rubber on this one. I’m not long oil this year, infact if it reaches $60, I’m shorting it and I’ll tell you why.

Pull up a 30 year chart of the current spot price of WTI light sweet crude oil. What do you notice with the price in the years ending in ‘8’? Well, they all bottomed and then spiked 2 years after that into years ending in ‘0’. In 1988, 1998 and 2008 they all did it. If history repeats itself I think oil is headed for a bottom in 2018. You can trade that.

I don’t believe it will happen in 2028 as disruptive technology will kick in by then – things like solar and the next big thing, fusion energy, if it’s advanced enough by then – see http://generalfusion.com/

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curiousjoe
curiousjoe
January 5, 2017 12:21 am
Reply to  martinc

“Fusion energy” has been the next big thing for a while. The ITER project (https://www.iter.org/proj/inafewlines), launched in 1985, has yet to achieve safe energy generation via fusion on earth, though it is one of the most expensive research projects ever undertaken. Not surprising, considering it is a collaborative effort among several governments.

I hope privately owned General Fusion has better success. Both ITER and General Fusion make the following assumption, copied and pasted from General Fusion’s website:

“Fusion powers the sun and the stars, where gravity compresses hydrogen gas to the temperatures required for fusion. The challenge for fusion energy is how to create those conditions on Earth in a controlled way that can be used to provide power.”

Arthur Eddington was the first to hypothesize in 1920 that the sun and other stars are powered by nuclear fusion. (See e.g.: http://www.vias.org/genchem/nuclear_chem_31328_08.html).

A more recent hypothesis is that the sun (and other stars) do not have nuclear furnaces in their cores. See e.g.: https://www.youtube.com/watch?v=kin9zqPMPaI

jav13037
Member
jav13037
January 5, 2017 6:39 am

Thank you for the essay. I think if I owned the stock, I would be getting out now and taking profits. If I were the company, this would be a great time to issue more stock to raise capital.
There are thousands of drilled but uncompleted wells (DUCS) that need to still be fracked. The oil exploration companies never stopped fracking through the price drop as this was the less expensive part of well development. That is why the oil production didn’t drop as much as rig counts. The O&E’s needed to finish the wells to service their debts.
Any significant rebound in drilling will negate the limited OPEC cuts.
I do not expect the OPEC members to maintain the production caps. OPEC has tried to do this in the past and every time the members have accused each other of violating the agreement.
This stock looks pumped to me.

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Bobwins
Irregular
January 5, 2017 11:13 am

I get Schaefer’s newsletter. He is a straight shooter, disclosing buys and sells with his own money. He has focused on the Permian Basin as the premier shale play in the US. Based on his research, drillers are able to make money at current oil prices and pay back the cost of drilling in 12-18 months in the sweet spots of the play. He has scored some major hits, recommending REN when it was $6 vs the current $43. Based on recent land sales, that price could be undervalued by a factor of 3! The sweet spot in the Permian is like a layer cake, with multiple pay zones stacked like pancakes. This multiplies the numbers of economic wells that can be drilled on the acreage.

He currently likes REN, SRAQ, REI and CPE. He also found a small otc stock with Permian acreage, LLEX. Much more speculative than the others.

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Sital
Guest
Sital
March 10, 2017 10:51 pm
Reply to  Bobwins

Bobwins,
Any idea what company he refers to as The Delaware Basin Gem ? Thanks
Sital.

Edward Tschudy
Edward Tschudy
January 5, 2017 11:47 am

Linde ….the compressed gas company is working with a local company and has in operation four Frcking Rigs in the Penn, Ohio, W Va and Colorado that frack using Liquid nitrogen or Liquid Co2 to frack wells. Elimiates the Fracking Fluids the An ti Frackers are fighting
Googlr LINDE FRACKING
y friends Daughter is Datingone of yhe operators and I a trying to get a set-down with him

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thinairmony
January 5, 2017 11:19 pm

With green energy being the future, I have one question. Do we not (U.S.A.) have oil reserves available that can just be extracted from the ground with out using the costly fracking of shale and tons of contaminated sand and millions of gallons of contaminated H2O? The only reason I ask is because, I never have heard but assumed we had oil that we could get to from just simply pumping it. I just never thaught about it. But I would think you would get the easy oil first and do more inventive ways in the mean time to figure out a more efficient way to frack oil or getting it from sand. Just sayin.

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thinairmony
January 6, 2017 12:08 am
Reply to  thinairmony

http://science.howstuffworks.com/environmental/energy/oil-drilling8.htm This is a good article, answered my question about oil drilling. Hopefully I can log in tomorrow been having issues for over a week.

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thinairmony
January 6, 2017 8:03 pm
Reply to  thinairmony

Found this after further research it’s amazing , oil is basicallywhat the gold standard was. http://www.mintpressnews.com/americas-1-oil-doesnt-really-matter/194076/ check out this link also interesting.http://www.greeleytribune.com/news/local/fracking-101-breaking-down-the-most-important-part-of-todays-oil-gas-drilling/

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wade3
Irregular
January 6, 2017 12:54 pm

Martin, I see that Select Sands’ CEO was replaced today. Is that a good or a bad thing?

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wade3
Irregular
January 7, 2017 9:35 am
Reply to  wade3

Correction: CEO replaced a short time ago…Is that just a natural course of things or a sign of trouble within the company?

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rocketman
rocketman
January 9, 2017 11:56 pm

Here’s a detailed article on Select Sands.

https://miningwealth.com/initial-thoughts-on-select-sands-corp/

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Kathy
Kathy
January 10, 2017 3:36 pm
Reply to  Myron Martin

Well said, Myron. I purchased SLSDF last week and look forward to making a nice profit on this stock. I’d be interested to know what other speculative stocks you are looking at right now.

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smaihar
Member
smaihar
January 13, 2017 2:11 pm
Reply to  Kathy

WHats your entry Kathy. I am looking to buy SLSDF too but not sure where should I enter ?

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Kathy
Kathy
January 13, 2017 5:11 pm
Reply to  smaihar

I put in a limit order through Fidelity at 95 cents and it went through on Jan. 6th.

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Val
Guest
Val
January 11, 2017 10:53 pm

Frac sand company is a penny stock which my broker can’t sell. Too bad

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dadomkatto66
dadomkatto66
February 3, 2017 10:29 pm

I just wanted to thank you guys. I bought the stock after your review @ $1.03 and has now reached $ 1.45.
Whether the stock will go up from here or not, you proved you know what you are talking about.
Greatful
SLSDF

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Kathy
Kathy
February 4, 2017 9:02 am
Reply to  dadomkatto66

And I bought in at .95. Thank you, Travis!

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Sital
Sital
February 21, 2017 4:04 pm
Reply to  takeprofits

Myron,
Can you mention some of your best picks in precious metal industry?
Thanks,

Funguy
Funguy
February 15, 2018 12:06 pm
Reply to  takeprofits

Update on Select Sands, please?

wade3
Irregular
February 17, 2017 12:35 pm

I know ups and downs are part of the game, but anybody have a clue as to why SLSDF has been dropping so for the past week?

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