Badiali: “The Oil Sands Story 60 Minutes Missed!”

By Travis Johnson, Stock Gumshoe, March 6, 2008

OK, here’s one that’s causing a massive wave of Gumshoe email — I guess the Stansberry & Associates email servers are heating up again now that oil looks to be solidly above $100.

This one is for an oil sands play, as you might imagine, but (if you read through the pages and pages of teaser copy) you’ll note that this is a Saskatchewan oil sands play, not an Alberta play. That’s what they mean by the “story 60 minutes missed” — 60 minutes did a show about oil sands, but focused on Alberta. Can’t blame them, really, since Alberta is the world center of oil sands extraction and technology (or maybe Venezuela is, if you want to expand your definition a little bit).

So the S & A Oil report will run you $99 for the first year. This oil sands play will cost you naught but time and the energy it requires to scan your eyeballs back and forth across this screen for the next few moments.

But the teaser goes into detail on the fact, which should probably be obvious to us, that the border between Alberta and Saskatchewan doesn’t extend underground — the bitumen that’s being mined in parts of Alberta also exists under parts of Saskatchewan. And with companies urgently pouring money into the oil sands with OPEC holding the line and production and oil staying near $100, clearly that money is going to go to where the oil is, so Saskatchewan has some potential to enjoy a boom.

Most of the teaser info is tiptoing around this point: That we’re just looking at another province from whence, with enough investment in infrastructure and a large enough critical mass of producers drilling holes, the next big oil sands output might come.

But a fair amount of it also consists of some clues — mmmm, clues! — about the company that holds some significant Saskatchewan rights — and the fact that investing in them will add quadrillions in cash to your bank account.

In Badiali’s words, this one “gives you chance to make 575% over [the] next 12 months.”

The big catalyst that’s very wordily described in the ad is the decision by Saskatchewan (after greedily watching their neighbors in Alberta experience a gold rush-like boom) to start seriously considering and allowing oil sands extraction on their side of the border.

Of course, Saskatchewan is already a pretty big oil producing region and has been for years — their oil sands business is still pretty nascent, but they did pass some new regulations last year and start selling oil sands parcels. Badiali quotes a Canadian oil & gas industry publication as saying that “The Government of Saskatchewan Industry and Resources… has introduced new fiscal and regulatory changes to support development [of its oil sands]” — you can read the whole article here, which is a bit more useful than that little quote (I don’t know anything about the source, but it’s an interesting read).

For some of you who’ve followed the story of this company as they’ve peaked and troughed over the past year, that might be enough — but for the rest, let’s look at a few of those clues:

We get the usual crop of newspaper articles, which serve to make it all seem that much more real and above board:

“The Regina Leader-Post writes, ‘[This secret province] is at the epicentre of a “new world oil order,” thanks to its vast reserves of oil sands, heavy oil and other unconventional resources.'”
The Saskatoon StarPhoenix reports, ‘This is a world-class discovery. This is as big as they get.’
The Edmonton Journal reports, ‘[This region] appears to be on the verge of following Alberta’s lead and seeing significant oilsands projects started in the northern boreal forest.'”

And some specific clues:

The shares trade for less than $4 per share (it’s gone up 5-10% since then, it’s now slightly over $4).

Some specifics on their activities:

“Already, phase one test drills have been completed…
Twenty-four holes were drilled into Saskatchewan’s thick oil-rich sand…
Nineteen came back with a pay grade RICHER than Alberta’s.”

And right now, “this small firm is finishing a second, much bigger test drill. This is the biggest oil sands test in Saskatchewan to date… a complete assessment of the land.”

And