This ad is getting a lot of attention from my readers, if my inbox is any indication — it’s for the Phase 1 Investor service from Stansberry & Associates, which is their expensive premium letter that has historically focused mostly on biotech stocks but is also used by them for any super-tiny stocks that would be swamped by interest from their larger newsletters (or, if you prefer to think of it a different way, their best ideas that they want to keep most “exclusive”), so in recent months we’ve seen them tout some little resource companies — including today, when we hear about a mysterious Iraqi investment.
They’re calling their special report “The Treasure of Baba Gurgur,” and the ideas are apparently based on some thoughts from Matt Badiali, who helps the S&A Resource Report (they must have just changed the name, I still have it here as the S&A Oil Report). Part of his recent claim to fame in this area is a recommendation of Addax, which was one of the potential players in Iraq and was recently bought out at a nice premium by a Chinese company.
Just a quick aside: we should give a little “huzzah” to Christian DeHaemer here, he’s the one who teased Addax and a few other potential Chinese takeover targets among emerging oil companies when he was pushing the ad that he called the “Great Red Oil War” for his Crisis Trader newsletter way back in April, so congratulations to him for being right on that one.
But what’s the tease today from the Stansberry folks?
“I’ve learned of a tremendous moneymaking opportunity that is about to unfold in Iraq.
“Honestly, I can’t say exactly how much or how soon you could profit from this situation. But I am EXTREMELY confident it will make some people A LOT of money… and soon.
“Right now, there are two ideal ways to play the Iraq oil boom…”
They go on to say that they’re pushing two different companies as their best ideas for this theme — one of them I won’t get to today, the actual oil producer, but the potential oil services monopoly sounded interesting so I thought I’d take a look at that first …
“A Near Monopoly that Could Double Your Money
“My top recommendation in Iraq is a company that will, in all likelihood, soon have a near monopoly on servicing Iraq’s oil wells for the next decade, and beyond.
“This situation is very speculative and there is significant risk involved.
“First, here are a few things you should know about this company:
• “Earlier this year, they began negotiating a landmark $400 million joint venture contract with the Iraqi government, beating out bids from some of the world’s biggest oil companies including BP, ExxonMobil and EDP.
• “This company’s contract is the first a Western firm has signed with the Iraqi gov’t since the fall of Saddam Hussein in 2003.
• “Under this contract, the company will potentially be one of three companies in the entire country who will be acting as a service provider to foreign oil drillers. In other words, every time a new oil company comes into Iraq to drill wells, they’ll need this company’s equipment and expertise to get the job done.
• “And most import