[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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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.
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.
Fracking is currently break-even at about $42 a barrel. With continuing cost improvements, some see that floor dropping to $30.
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.
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.
Good info on proppants (frac sand)
http://www.drillingcontractor.org/proppant-demand-operators-save-locally-sourced-sands-40180
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
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
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.
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/
“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
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.
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.
Bobwins,
Any idea what company he refers to as The Delaware Basin Gem ? Thanks
Sital.
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
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.
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.
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/
Martin, I see that Select Sands’ CEO was replaced today. Is that a good or a bad thing?
Correction: CEO replaced a short time ago…Is that just a natural course of things or a sign of trouble within the company?
Here’s a detailed article on Select Sands.
https://miningwealth.com/initial-thoughts-on-select-sands-corp/
Thank you Rocketman for posting the excellent article on SELECT SANDS even though the author initially takes a somewhat neutral stance, in the end he provides some valuable insight. What first attracted me was that as a precious metals analyst I first ran across it due to their gold project and previous experience with other projects established by Rasool Mohammed who is a very smart operator, and that is what I do, follow management teams with a positive track record. Somebody asked whether a recent change in management is a good thing or a bad thing, and my answer is it is a good thing, What a good business man like Rasool does is establish a promising company and then hire a good manager to run it on a day to day basis and devotes his own time to developing new opportunities and projects and you can rest assured any new project Rasool gets involved in I will take a good look at. Now as to the negative views some have posted on the oil industry in general the following article may give you a different perspective.
http://oilprice.com/Energy/Energy-General/Shale-Spending-Is-Set-To-Soar.html Certainly oil prices have had a nice rise over the past few months and the bottom line on Select Sands is their proximity to the most profitable current oil basin in the U.S, giving them a very considerable economic advantage no matter fluctuations in price, the Permian Basin is set for a robust growth in drilling and demand for frac sand. If you want absolute certainty before investing then I hope you are satisfied with mediocre returns of around 10% a year, that is your choice, but if you want doubles and triples which are routine for me, or Keith Schafer for that matter then you need to be willing to take a little more risk by buying well researched companies at an earlier stage of development.
Yesterday I sold half of my position @ $2.48 in a stock I bought for .44c and I am putting the 5 X + profits into a couple of speculative stocks @ under .50 as this one was at the time I bought it. Intelligent speculation made millions for Doug Casey and many other well known millionaires and billionaires, and while not for everyone, it is a technique that can be learned, by any student of the markets, you just need a good mentor and some common sense and diligence in research.
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.
WHats your entry Kathy. I am looking to buy SLSDF too but not sure where should I enter ?
I put in a limit order through Fidelity at 95 cents and it went through on Jan. 6th.
Frac sand company is a penny stock which my broker can’t sell. Too bad
I har thia a lot, dosen’t that just prove that you should be looking for a better more accomodative broker? I pay $6.95 per trade here in Canada and can buy on any of the American Exchanges.
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
And I bought in at .95. Thank you, Travis!
It was about time for an update on Select Sands. Given all the negative initial reactions I neglected to follow through with all the good news in a timely fashion. There was an article covered by SIMMONS @ Company about the frac sand industry and they had nothing but good to say about SELECT SANDS in particular, but for some reason it won;t scan, but if I finally figure it out, I will post it, The article points out that there are many private frac sand suppliers and use is expected to increase at least 20% as are prices in the months ahead, but Select is a leading publicly traded company at the right place at the right time.
As always I recommend subscribing to any companies press releases in which you have even the slightest interest so that you get timely information on Co. progress and in this case the news is very positive, not only have they received their first major order but they have also purchased additional near by acres to expand their capacity.
It is nice to be vindicated by a rising stock price and hear from happy customers, but this should continue to be a growing profitable company for the foreseeable future, so it is not too late to buy with a limit order on down days in the market so you get the best price. It dosen’t take much for a small company like this to double or triple with increasing demand for their product when they have so many strategic advantages.
And YES Kathy and others interested in the small cap space that regularly returns me Doubles & Triples in 6 months or a year, I do have many more, it is a rare day that I don’t discover at least one I would consider buying and I usually have a running list of at least a dozen at any given time, I just don;t have the capital to buy them all without taking some profits on prior purchases. I will accept 200 beta testers for a FREE trial of a concept service I am planning on starting devoted exclusively to stocks under a $1. but I don;t want a bunch of tire-kickers just because it is free initially.
What I envision is an alliance of active investors willing and able to devote 5% to 10% of their portfolio to speculative juniors who are not phased by the occasional small loss and are willing to share sources of information for mutual benefit. It will be designed as a co-op to invest in newsletters that are too expensive for an individual small investor to afford on their own. Further details can be had by sending an E-mail to takeprofits@gmail.com. As part of this alliance I am greatly expanding my LINKEDIN network by inviting dozens of geologists, Investor relations people and Co. CEO’s to join and contribute the early stage intelligence on new technologies, resource discoveries etc. well before they hit the headlines and everybody knows about it. and I am getting a great response from well placed individuals interested in the concept. This will not affect my writing columns for Gumshoe on larger more established companies, though I rarely invest in companies with a stock price over $10. (unless I am using options to lower capital costs) but that leaves plenty of latitude to report on stocks in the $!1. to $10. range that most investors feel more comfortable with. My experience has simply been (over decades of investing) that I make more money faster with smaller stocks with entreprenurial mgmt. than with wasteful more mature companies paying ridiculous salaries who are more interested in enriching themselves than in rewarding shareholders.. By using careful and prudent allocations of capital the risk/reward ratio actually favours the smaller stocks, you just have to have a good balance of foundational stocks with steady earnings and dividends with a much smaller allocation both individually and totally to junior more speculative stocks.
Given Keith Schafer’s track record on profitable oil & Gas investments and my own in precious metald and other juniors, recent price increases still convince me this a no0brainer pick.
http://us12.campaign-archive1.com/?u=d9dfb324c944f7c75f28cf929&id=a4cc16d7cf&e=89cb1a86e7
Select Sands Acquires 457 Acres 3 Miles Northwest of Sandtown Project, Northeast Arksansas, US
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January 25, 2017
Select Sands Acquires 457 Acres 3 Miles Northwest of Sandtown Project, Northeast Arksansas, US
Vancouver, BC – Select Sands Corp. (TSX-V:SNS / OTCQX: SLSDF) (the “Company”) today announced its wholly-owned subsidiary American Select Corp. has completed the purchase of an additional 457 acres of property approximately three miles from its 520 acre Sandtown location. Referred to as the Bell Farm, the Company believes that the property is underlain by the St. Peters formation based on certain information available to the Company and information in the public domain. The St. Peter Sandstone formation is a source of Northern White Tier-1 frac sand. The Company plans to do further work to determine the quality and quantity of sand, if any, contained within the property boundary. The Company is not able to confirm at this time whether this property will have an economically viable amount of sand. The total purchase price was approximately $950,560 USD which included agent’s fees of $36,560 USD.
Mark Horan, P.Eng. of Tetra Tech, Inc. (NASDAQ: TTEK), a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the scientific and technical disclosure in this News Release.
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About Select Sands Corp.
Select Sands Corp. is an industrial Silica Product company developing Northern White, Tier-1, silica sand property located in Arkansas, U.S.A. Select Sands’ Arkansas property has a significant logistical advantage of being closer to oil and gas markets located in Texas, Oklahoma, New Mexico, and Louisiana when compared to northern sources such as those in Wisconsin.
For more information about Select Sands Corp., please visitwww.selectsandscorp.com or contact:
Myron,
Can you mention some of your best picks in precious metal industry?
Thanks,
Update on Select Sands, please?
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?