$82 billion opportunity disappearing soon? (Frank Curzio’s Phase 1)

by Travis Johnson, Stock Gumshoe | February 6, 2014 3:31 pm

Promo says "Frank has just unearthed what could be the most ridiculous windfall in the history of Phase 1"

Several intrepid readers sent this pitch flying my way while we were digging out of our latest snowstorm, and I figured a nice little panic about an $82 billion “missed opportunity” ought to warm me up.

Phase 1 Investor, the big “upgrade” letter from Stansberry & Associates, usually gets our readers attention when they send out a new promotion… partly because the publisher has one of the biggest mailing lists in the world, and partly because it’s too expensive, at $5,000 (or “on sale” for $3,000) for most individual investors to seriously consider a subscription. And despite any evidence to the contrary, some investors persist in believing that more expensive newsletters automatically pick better stocks, which means these promos get even more attention.

The stocks Frank covers with this letter tend to be small and sensitive ones, usually in tech, biotech or natural resources, and they’re often quite illiquid … but they’ve almost always got a good story. So what’s the story this time?

The headline of the actual ad says that we need to “Buy this ‘Under $0.50’ Stock by February 15th, 2014” … which started to ring some memory bells in my head, and the lead-in from the email pitch got us interested thusly:

“You see, Frank has just unearthed what could be the most ridiculous windfall in the history of Phase 1.

“It’s a microscopic energy company – with a $40 million market cap. It currently trades for about 46 cents per share.

“Yet it happens to be sitting on a truly massive petroleum formation.

“We’re talking about an estimated 500 million barrels of oil… and 7 trillion cubic feet of natural gas.

“The estimated net present value: $49 billion in crude oil… and $33.4 billion in natural gas.

“Yeah, that’s about $82 billion – some 2,050 times bigger than the company’s current market cap.”

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Yes, $40 million is “microscopic” and we run the danger of helping Stansberry & Associates draw too much attention to the name just by writing about it here but, well, what are you gonna do?

I do draw the line at some stocks, some of the time — I unveiled a little $10 million market cap name being teased now earlier today[1], but I assuaged my guilt a bit on that one by limiting the article to the much, much, much smaller group of Irregulars (those are our paying members) … still, when you’re talking about a stock with a sub-$50 million market cap any yahoo with a blog or a twitter account can probably impact the price if he makes an effort, so, as always, be careful and think for yourself.

What’s Frank pitching now, then?

Well, it turns out that we were right to think it sounded familiar — this is a slight revision of a teaser that Curzio sent out last Fall and that we covered here about four months ago [2], and in fact the “presentation” still carries the “October 2013” date down by his signature, though they have updated the “Must buy by November 1” to “Must buy by February 15” … and they did add in a couple other edits to refer to their 2014 drilling program instead of the 2013 one … but this is still East West Petroleum (EW in Canada, EWPMF on the pink sheets), and news is still fairly slow in developing.

I own East West Petroleum shares — I picked some up when I wrote about them last Fall[3], largely because they had some catalysts coming in the form of drilling in New Zealand and possibly the start to their Romanian drilling campaign that’s been delayed for a couple years, and the news so far has been fairly ho-hum in New Zealand and nonexistent in Romania so I’m still sitting on my shares and watching. Curzio’s attention drove it from 40 cents to about 70 cents very briefly, as he loaded on the enthusiasm and hosted a conference call with the company’s management, but it’s now back to about where it was in October.

And yes, it’s pretty disingenuous to say Curzio “just unearthed what could be the most ridiculous windfall in the history of Phase 1” when you’re talking about a stock that he originally pitched almost two years ago[4].

So, now what? I guess this gives me a chance to take another look at the stock, something I’ve been meaning to do anyway. Win-win!

East West Petroleum has two important assets: shares in wells that are now being drilled by TAG oil in New Zealand in the Taranaki Basin (that’s New Zealand’s core production area for onshore oil and gas, and the wells may not be gushers but are relatively low risk and in or near proven areas), and four blocks in Romania that are just about to be explored for gas. East West is buying in to the New Zealand stuff, paying to drill the wells to earn-in their 30-50% share, and the opposite is true for Romania — in Romania they’ve let Gazprom Neft buy in to operate the four concessions, with EW getting fully carried on costs for the first 12 wells and getting 15% share until there have been three wells drilled on each of the four concessions at a minimum investment of $56.6 million.

So in 2014, East West will be spending something like $12-17 million on New Zealand drilling and seismic, depending on whether they get through five or eight wells (three are conditional and planned for later in the year, five are more firmly scheduled) and nothing on Romanian gas. The New Zealand wells are all expected to break even over roughly six months, so there will be cash flowing in as well as cash flowing out … which tells me that they can easily cover their commitments with their cash on hand (about $16 million) and their revenue from the first few wells (should be several million by next month, recouping their costs within a few months of drilling) as long as they don’t have a big problem anywhere this year or make other big commitments. That’s not to say they won’t sell more shares and raise money, they could easily do so (and might want to do so to give themselves some more growth capital if the stock spikes up on some good news).

They have other projects around the world as well, including an unconventional oil/gas partnership in Eastern New Zealand, also with TAG, and small projects in Morocco, California and India, but none of those should have any real impact on East West’s books over the next couple years as far as I can tell.

The $82 billion and 500 million barrels of oil in the teaser pitch is, of course, a pipe dream — I suppose it’s possible that East West could reach those numbers from their combined exploration areas, but I’d happily take the “under” on that if we’re betting. Doesn’t mean it’s a bad stock at $40 million, obviously, since I’ve already told you I bought shares myself, it’s just not a lottery ticket. Going up a few hundred percent would please me just fine, we don’t need to see billions in value — and dreaming about those billions is probably bad for you.

East West’s producing and likely-to-produce-anytime-soon oil is estimated to be in the range of 2-13 million barrels in their lower-risk New Zealand Taranaki wells, and the big unconventional East Coast project potential in New Zealand, which may well be over 100 million barrels, won’t even see its first drill bit from the EW/TAG joint venture for probably three years. And I don’t know whether Romania might end up having trillions of cubic feet of natural gas in EW’s million acres of exploration blocks, but neither does anyone else — there’s almost certainly oil and gas in there somewhere, just as there is right across the border in Serbia, where their partner Gazprom Neft has already made discoveries, but we can’t really put any numbers on it yet.

The pitch talks about a 20-well work program for 2014, but that’s really more than they’ll do just this year — New Zealand is a maximum of eight wells this year, with probably a little less being more likely, and Romania is a possibility to drill three wells this year as they start what will be a 12-well work program, so that’s a total of 11 wells possibly in 2014. They only had the final 3/4 of their Romanian blocks ratified by the government in November, after extended delays, so there’s been little progress made at identifying drill targets, etc. — apparently seismic is underway now on the first block in Romania, the one that was ratified earlier, and that’s where the drilling of potentially three wells is expected to come in the second half of this year. Their partner has two years from this past November to drill twelve wells under the terms of the current agreement, though I suppose it wouldn’t be shocking if there were delays or extensions.

That’s enough to have me holding on to see how things go. They’re producing oil and gas in New Zealand, they have cash flow and some upside potential if the New Zealand wells end up being a bit better than expected (so far it strikes me that they’re slightly worse), and, since they have cash for their drilling commitment in New Zealand and get a free ride in Romania, the downside is relatively limited compared to other teensy oil explorers. I bought this one for the potential of a near-term (within six months) catalyst, but the fundamentals are solid and I’m now at least planning to wait out the next six months or so and see how the drilling in Romania goes.

So what do you think? Interested in this Frank Curzio play from October that’s being refreshed now that the shares have come back down? Or is it all still too speculative for you? Either way, shout out your feelings to the world with a few words in the friendly little comment box below.

And yes, to avoid trying to profit personally from attention that we give to tiny stocks, I promise not to trade East West Petroleum for at least three days per Stock Gumshoe’s trading rules.


Endnotes:
  1. unveiled a little $10 million market cap name being teased now earlier today: http://www.stockgumshoe.com/reviews/gold-newsletter/whats-lundins-february-gold-investor-stock/
  2. we covered here about four months ago : http://www.stockgumshoe.com/reviews/phase-1-investor/whats-frank-curzios-under-fifty-cent-company-that-he-says-we-should-buy-by-november-1/
  3. I wrote about them last Fall: http://www.stockgumshoe.com/reviews/phase-1-investor/whats-frank-curzios-under-fifty-cent-company-that-he-says-we-should-buy-by-november-1/
  4. originally pitched almost two years ago: http://www.stockgumshoe.com/reviews/phase-1-investor/transylvania-gas-and-phase-1s-april-26-conference-call/

Source URL: https://www.stockgumshoe.com/reviews/phase-1-investor/82-billion-opportunity-disappearing-soon-frank-curzios-phase-1/


  1. Avatar
    Edward Ramonas
    Feb 6 2014, 04:07:39 pm

    This one has been a pleasant surprise for me, don’t remember who I read to pick it, but bought at .3o sold 1/2 at .60 now on what they like to term the free ride.

  2. Avatar
    tony goncalves
    Feb 6 2014, 04:35:53 pm

    Curzio gave me a good winner ( actually you did here Travis ) with Vringo. Took a nice ride on that wagon couple of weeks ago and cleaned up. Usually he knows something that will pump the stock – not necessarily fundamentally, but at that price, I buy lottery tickets and hope his hype makes a good push..

  3. Avatar
    Tom Bates
    Feb 6 2014, 04:37:13 pm

    I bought a fairly good chunk of this last time around…it went down a couple of cents and then up ten or twelve cents and I sold in less than ten days, can’t remember if it was five days or more. Might consider throwing a little at it again, but its hard to buy $50,000 of a 50 cent stock.

  4. 416 |
    Myron Martin, Junior Mining Columnist
    Myron Martin, Junior Mining Columnist
    Feb 6 2014, 04:37:49 pm

    Like Travis I am being patient with this one after profiling it a few months ago. These types of stocks are definitely speculative, but with good drill results they can deliver stellar returns.
    One of he reasons I decided to share my stock research is because of my experience with U.S. newsletters subscriptions over a 10 year period. Right now I wish had the $10,000 I wasted subscribing, because for the most part they are over hyped, even when they do make a good pick. Setting expectations too high is in my view self defeating because it deceives naive investors and results in losses when a stock ultimately returns to a market supportable level based on the real fundamentals.

    • 7788 |
      frank archambeau
      frank archambeau
      Feb 6 2014, 06:06:39 pm

      Myron I think also nearly all I have spent on pricey newsletters wasted. Maybe If I had gone all in & hit a winner it would be different but a lot of small winners,few large losers = not worth it. I might think better of this venture if did not have Romanian connection, understand some how people there feel about exploitation & thus regard this even if “not to worry”.

  5. Avatar
    Deborah G Flynn
    Feb 6 2014, 05:01:47 pm

    I find the Stansberry group just a wee bit too Carny for me. I mean the guy was selling shares of his own boat not too long ago or leasing it out when he wasn’t using it. Makes me think he’s a bit of a scammer. That’s why I won’t pay a whole lot ogf attention to his expensive letters but do enjoy Travis’s research and might look at it FOR MYSELF NOW. They do have a way with words LOL IF he was so successful what does he need to be pitching penny stocks for?

  6. Avatar
    Ventureshadow
    Feb 6 2014, 05:22:30 pm

    Eats Wets Petroleum jelly, sounds like a baby sort of stock, and is. Buying this is like going to Las Vegas, but without drinks, cheap gourmet dinners, or shows. Also it takes longer for me to lose my money (and, just maybe, I’ll win).

  7. Avatar
    Marc
    Feb 6 2014, 05:27:41 pm

    I can not believe you bought it and are again touting it as a possible buy. EWPMF the MF tells us that they haven’t filed their SEC statements which are required of them by law. Why? What are they hiding? It is possible that this reflects a cooking of the books with a reluctancy toward filing due to the legal penalties. This is gambling in my opinion and thus I would have to advise caution. The free ride comment I do not understand. If he sold 1/2 his investment for double the original costs then he has now broken even and the shares he still owns haven’t cost him a dime hence the term free ride. What is your problem with that vivian? Props to him for playing that trade so well. Myron I would advise you to look up a guy going by the name superman, real name Paul, on profit.ly. His picks are on fire right now and he is much cheaper. I have no affiliation with him but I like how honest he is about his picks.

    • 11637 |
      Travis Johnson, Stock Gumshoe
      Travis Johnson, Stock Gumshoe
      Feb 6 2014, 06:08:50 pm

      They’re not listed in the US and not required to file with the SEC. They’re on the Venture exchange in Canada and I think they’re compliant with requirements there. The financial filings are current. Doesn’t mean they’re without risk, of course.

  8. 7788 |
    frank archambeau
    frank archambeau
    Feb 6 2014, 05:54:47 pm

    Anytime I see Urgent “must buy now” I ask why? Otherwise I might nibble at this,except
    maybe he needs sell & bad news coming. Old sayings “look before you leap” & also”he who hesitates is lost” are both sometimes true. I cannot ascertain action & therefor use
    1st law of “power of negative thinking” ” I can’t therefor I won’t”.

  9. 11637 |
    Travis Johnson, Stock Gumshoe
    Travis Johnson, Stock Gumshoe
    Feb 6 2014, 06:52:43 pm

    Reasonable stance. “Must buy now” in these pitches is always really about getting you to act immediately on the subscription offer — if they told you it would take six or nine months for the stock to surge or that you should patiently consider and build a position, you’d have no reason why you must immediately subscribe. And they know, of course, that their best chance to get you to subscribe is immediately, as soon as you see the ad. With no urgency in the ad, no one subscribes — they may run hot and cold as stock pickers, like most of us, but they are superlative marketers.

  10. Avatar
    john hryma
    Feb 6 2014, 06:55:10 pm

    We might all be wise to read Keith Schaefer’s latest pitch. The most obvious Energy takeover in 2014. He’s talking about a company called High North Resources (HN-TSXV). Good Luck To All.

    • 11637 |
      Travis Johnson, Stock Gumshoe
      Travis Johnson, Stock Gumshoe
      Feb 6 2014, 11:12:24 pm

      EW has said that their wells in Romania will be conventional, no fracking, but I imagine the blue sky projections may hope for fracking or more aggressive artificial lift. Chevron’s fracking is on the other side of the country.

      • 7788 |
        frank archambeau
        frank archambeau
        Feb 7 2014, 12:49:00 am

        Travis even if people have no valid reason for fear does not change their concerns. Romanians can access internet & see scare stories it carries. Note people in Africa dying/hungry because their beloved leader has fear of GMO corn. No balance between perceived potential harm & reality. People have long memories of abuse from Beloved Leaders & others who “just want to help them” ; until risk settles down I am wary of investment. Does not imply anyone should not invest, just one factor.

        • 7788 |
          frank archambeau
          frank archambeau
          Feb 7 2014, 01:08:15 am

          Further thought; I meant no racism, In U.S. & Europe also people fear “Frankenfood” not knowing probably all food is genetically modified thru ‘natural’ process & contains ‘natural’ pesticide. I think Monsanto seeks profit, not to kill us all. That said, self prefers home grown tomato flavor over red pool-balls in super-mart.

    • 7788 |
      frank archambeau
      frank archambeau
      Feb 7 2014, 01:17:33 am

      James fracking has been done in U.S. for I think over 30 years so probably is us invention.
      Also it is mostly done at depths where it can’t possibly affect ground water. Also is being used to sequester “evil” CO2 we all emit. Soda water makes good solvent.

      • 11637 |
        Travis Johnson, Stock Gumshoe
        Travis Johnson, Stock Gumshoe
        Feb 7 2014, 12:00:02 pm

        Fracking has been used for close to a hundred years, since they first started shooting liquids into wells to stimulate them, and is used in many countries, but was really commercialized and “perfected” at much higher pressure and put into mass use about 10-12 years ago in the Barnett shale and elsewhere. The US has almost all of the industrial capacity in the world, and almost all of the experience and know-how in horizontal drilling and fracturing, and has a huge head start on the infrastructure required for large-scale fracking … but pretty much every country that has ever had any notion of ever producing oil or gas also has prospective shale gas and oil deposits.

        • 36 |
          Avatar
          James Fernow
          Feb 7 2014, 12:39:59 pm

          PS I am not intending to start a discussion of a controversial issue here, only mentioning in this forum to acknowledge the existence of strong views on both sides. These could affect future stock prices.

  11. Avatar
    Quincy Adams
    Feb 6 2014, 11:22:18 pm

    These Stansberry guys seem to be the Goldman Sachs of newsletter publishers…rich and arrogant. Have not bit on any of Curzio’s picks, but the performance of the group as a whole in recent times is mixed. On the whole, what I have bought of their recommendations has left me poorer and them richer from what I paid for them. If recent performance is any indication, they must have obtained their wealth more from subscribers than from following their own investment advice.

    • Avatar
      David A
      Feb 10 2014, 08:04:57 pm

      Say what you want. I have followed their advice and have done not just well, but
      VERY VERY WELL. I get a kick out of all the folks here that love to kick Stansberry around. Personally I think they are the BEST of the BEST, and I am ultra conservative.
      The critics can say what they want, as grandma used to say; The proof is in da pudin.”

      • Avatar
        Superchunk
        Feb 12 2014, 01:31:03 pm

        Both of yous might be right…IMO 80% of investing success is about trading technique so someone with good technique could do well and someone else not so well with the same picks. The thing that makes newsletters (including S’berry from what I know, I don’t use them) ) a dirty business is that 1) they emphasize the 20% that you can get in better quality for free other places and that a good investor will look at anyway to do their due diligence, and 2) they generally advocate very bad trading techniques like wide stops which will only work in a bull market, or long-term buy and hold without good risk control, or counter-trend postions…If they were both competent and honest they would make their primary advice be: Don’t subscribe to any newsletter until you have a well-developed, consistently profitable trading technique.

  12. Avatar
    Don Exum
    Feb 7 2014, 12:26:41 am

    Mr. James Fernow,
    Your comment about fracking being a US Technology.. Fracking is just a Technology, actual birth place unknown to me personally, but available for use anywhere in the world where feasible and economically productive, if the environmentalist there don’t impede the process.. All the E&P Energy Companies that I am invested in use fracking where necessary to improve well production and cost payback ASAP. The name of the game..! Good luck with your investing..

    • 36 |
      Avatar
      James Fernow
      Feb 7 2014, 11:59:06 am

      Thanks, I thought I had read somewhere that although fracking has been done for decades, it’s only the US companies that have the equipment and expertise to do it currently. Of course, if true, that may be changing.
      This is probably not the forum to discuss it, but there are reports of environmental issues associated with fracking
      http://www.theguardian.com/environment/2013/oct/02/dangerous-radioactivity-fracking-waste-pennsylvania
      http://www.denverpost.com/environment/ci_22586154/water-fouled-fracking-chemicals-spews-near-windsor

      • 36 |
        Avatar
        James Fernow
        Feb 7 2014, 12:40:25 pm

        As I noted above, I am not intending to start a discussion of a controversial issue here, only mentioning in this forum to acknowledge the existence of strong views on both sides. These could affect future stock prices.

        • 11637 |
          Travis Johnson, Stock Gumshoe
          Travis Johnson, Stock Gumshoe
          Feb 7 2014, 12:53:44 pm

          Good point, James. Any company relying on fracking for their future success almost anywhere in Europe will be very challenged, regardless of whether you agree with the anti-fracking protesters or not. That may eventually be true in the US, too, depending on how the long term effects, whatever they may be, of the latest hydrofracking boom play out on the environment or on human health, but it would be very hard for environmental protest to put the genie back in the bottle in this country now that fracking has made a substantial economic impact in many areas of the US (and, thanks to cheaper natural gas, in pretty much all areas indirectly) … it would require a near-cataclysmic impact to shut down fracking in the United States or in key production areas, I expect (many states have banned and will ban fracking, probably, but most of them — with the exception possibly of New York — are places where fracking isn’t likely on any scale in the next decade anyway). That’s not the case in other parts of the world, where there isn’t already an established fracking industry or economic impact.

          • 7788 |
            frank archambeau
            frank archambeau
            Feb 7 2014, 03:43:38 pm

            Travis Closer to home it is going to be interesting to see how fracking plays out in California where the state is essentially bankrupt, taxes are nearing point where raising rates will increase outflow of wealth & raise less revenue,very strong GREEN faction many of whom are engaged in ‘medical’ cannabis production versus HUGE potential NG and oil deposits. Next door Oregon reportedly largest cash crop is cannabis,much in national forest & wilderness areas,much cultivated by foreign non-compliant occupants armed with newest full-auto weapons. Many Californians here still resentful of being crowded away from former largess of home state.County in Oregon of my abode above 30% un-employment tho many have 3 or 4 low hour jobs . We are gaining in wolves,expanding from yellowstone & arriving here so all that need to have one at there door will have availability. We live in interesting times here in Eco-topia, while we all await Richter scale 9+ eartquake. Speaking of near-cataclysmic mountains I live in have 6foot diameter clamshell fossils in rocks. Will keep you posted. If you like pictures I recommend visit

          • Avatar
            Sailor West
            Jul 30 2014, 02:32:46 am

            The two interesting points about California shale oil – over a year ago a northern California oil company CEO trashed his own company while trying to take it private, followed months later by the USGS downgrading the Monteray shale oil deposits by 96%. How convenient to defer the whole development / fracking issue (including addressing genuine groudwater concerns in the State’s severe drought). But then USGS way underestimated the Bakken field deposits early on. I think the government efforts further a political intent to let other countries use up their oil & gas first, or let it lie until our largest oil companies gain control. That hasn’t worked well lately.

  13. Avatar
    Randy Katz
    Feb 7 2014, 03:33:50 am

    Curzio seems to be having a hard time these days. Many of the recommendations have gone nowhere or south in his Small-Stock Specialist from what I can see. There were a few ok ones back a year ago but since it seems he is looking for new life.

    • 11637 |
      Travis Johnson, Stock Gumshoe
      Travis Johnson, Stock Gumshoe
      Feb 7 2014, 11:41:51 am

      Ah, yes — should have mentioned that and forgot to do so, thanks for the note. That’s about what they can afford without hurting their ability to fund their drilling commitments in NZ, don’t know whether they’ll really do the buyback or it’s just a shot across the bow to get investors’ attention. They do have strong insider ownership, which encourages shareholder-friendliness.

  14. Avatar
    Gerry Freeny
    Feb 7 2014, 11:38:39 am

    Porter Stansberry is a clown! You never know when to believe him or not. I stopped subscribing to him or any of his contributors several years ago. You’d think they would separate themselves from him also. Haven’t missed a thing except a lot of bad advice.

    • Avatar
      David A
      Feb 10 2014, 08:08:56 pm

      I guess I am really a clown, and have laughed in my clown face ALL the way to the
      investment bank. I not only have MADE lots of money with the advice, I will NEVER be
      without this advice! So one of us has got it wrong, and it aint me. They are the ONLY investment company that I trust. Who else gives themselves an end of year report card and has the “balls” to say if they got it wrong? Nobody! I think folks are just jealous.

    • Avatar
      opusnz
      Feb 9 2014, 09:45:00 pm

      Tag’s quarter is due to come out by Feb 15th. I think they will have strong results on their joint venture wells done with East West. This will help both companies but if you want a pure NZ play, I much prefer Tag or NZ Energy since they have a much larger land package on the east coast of NZ. Tag is more advanced and also has several deep targets which may be a strong catalyst for growth. The first of these, Cardiff was just cased and will soon be tested.

  15. Avatar
    Graham Jervis
    Mar 18 2014, 11:38:47 am

    Based on their latest news release i added more of this company. looking at their new Investor Presentation (march 2014), they have no debt, sitting on 16.7M in cash, the current market cap is a mere $34M, leaving an enterprise value of $17.3M. In addition, they are cash flowing with an IRR of 300% (LOL), Romania is being paid for by some other company, their outlay for 2014 is $12.1M.

    in addition they are buying back shares. i am definitely adding at current prices on this one.

    http://www.eastwestpetroleum.ca/assets/downloads/EWP_CORPORATE_PRESENTATION.pdf

  16. Avatar
    shrini hosmani
    Mar 20 2014, 02:16:06 pm

    Any idea why this stock is sinking inspite of good drilling results from NZ? They are sitting on cash with zero debt at this point.

  17. Avatar
    Tiekone
    Jun 10 2014, 04:04:13 am

    East West not trading that well because the NZ drilling season has not met expectations, at least my expectations.
    Out of 9 wells drilled in the Taranaki Basin only 2 (Cheal E1 and Cheal 4) are flowing naturally and Cheal E5 is helped with pressured water : total stable production is around 650 barrel per day (195 net to EW). Cheal E2, Cheal E3 are still in “testing” and is taking a little bit too long to expect good production going forward. On Cheal G only 1 well out of 3 drilled is “in testing” and even this one is taking too long. Souther Cross was a dry well.
    I think 650 barrel flowing naturally after 9 wells drilled is not a great result, hopefully the information available after the first drilling season will be very useful in order to get better results with the next season if any.
    Positives: East West should have bagged 5m $ from Cheal E and now the 195 net production to them should bring 6m $ for the first 12 months so lets say up to June 14 they should have received around 7M$ revenues.
    Given the nearly 17m $ cash , the inflows expected that should cover the 2014 capex I think stocks are cheap at 27m CAD without debt.
    Next Catalyst will be when they finally release a more updated reserve/resource calculation that should be done with the next annual report and will take into consideration all new information from drilling.

    I bought more at 27 cents but honestly so far the NZ drilling has disappointed me. Hopefully if some of those 3 wells under testing will get into production at a decent flow rate (lets’ say 200 barrels per day) the shares could already have some upside for that.

    Any more comments are welcome.

    • 11637 |
      Travis Johnson, Stock Gumshoe
      Travis Johnson, Stock Gumshoe
      Jun 10 2014, 10:53:45 am

      Well put, I agree the NZ performance has been disappointing. I still own some shares and am basically just sitting on them at this point — the cash flow should be decent, there remains substantial potential upside from Gazprom Neft’s seismic and drilling to come in the next year as well as from more NZ drilling. The worst downside, I guess, is that results continue to be weak and the stock price just dwindles as they spend their cash flow on additional drilling, but unless they do a big fundraising (which seems unnecessary to me) they have several shots for things to improve considerably.

        • 11637 |
          Travis Johnson, Stock Gumshoe
          Travis Johnson, Stock Gumshoe
          Jul 22 2014, 09:47:36 am

          Yep. They announced earnings today, nothing particularly surprising — NZ production dipped from earlier in the year, the only surprise (a small one) being that drilling in Romania won’t happen until next year (2D and 3D Seismic ongoing now). No urgent excellent news coming, but my opinion is still the same — plenty of opportunities for very good results in additional NZ drilling and in results from Romania, and they are producing enough oil in NZ that they apparently won’t have to raise any cash to keep going. Still being patient to see how it plays out, but I have been accused of being overly patient before.

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