Friday, May 30, 2008

Mundiregina....Oh where art thou Mundiregina

As those who have studied the maps know, there is a property called Mundiregina that lies within Forest Oil's circle of prospectivity and is adjacent to their southern holdings. No one seems to know who has the rights to this property. I have located a newly formed public company selling at $.30 with less than 20 million shares outstanding that has a property named Mundiregina. I talked to the company on Friday and they acknowledged they have a property called Mundiregina but they weren't sure where it was located. I kid you not.....this property was thrown in on the deal they did on their recent public offering and they are not sure where it is. He was speculating it might be in Sudbury which is NOT where the Utica shale play is. I don't want to disclose this company because I have a feeling that it is not the Mundiregina I am looking for. The company rep was going to check it out and get back to me on Monday. I will let you know what I find out.

Have a great weekend all.

Utica and Maritime Shale Update

What a week for the Four Horsemen of the Utica Shale and all others involved in the play. Friday saw a speculative fever that hadn't been seen before now. Surprisingly, there are still many junior exploration investors in the gold/silver and base metals that are not even aware of what is going on. Several people I've corresponded with haven't even heard of the story. That tells me the legs are still strong and more gains are ahead. Canadian Quantum continues to impress with a major move up Friday after Thursday's day of rest. They should be announcing who their 20% partner is Monday or Tuesday (my guess is Talisman). There is not a hotter play right now IN THE WORLD than the Utica Shale plays.

During the week, it was discovered that an illegal naked short position existed on Altai's shares. As expected, these crooks dropped Altai's price from $2.20 to $1.75 in a matter of minutes earlier in the week to try and cover their shorts. Altai holders who had stop loss orders placed had their shares stolen from them. Please, please use mental stops, not stop loss orders. There is a still a large short position on Altai and these crooks will probably try another raid next week. They are cornered, way underwater and desperate.

On the Maritime front, Triangle Petroleum announced a major PP at $1.40 today which will give them over $30 million to drill their 70% Nova Scotia shale gas play. Contact Exploration, which owns the other 30%, jumped up 21% to $.68 on the news.

Tuesday, May 27, 2008

CQM.H - I bought shares today for posterity sake

Picked up about 4,000 shares at $4.50 today for posterity sake. It was tough to pull the trigger after missing out on Monday but what the heck. Their 3.75% WI in the land where Talisman drilled Gentilly #1 is apparently more acreage (according to my lady friend) than the 55,000 acre deal with Junex. Their announcement today about the 20% farm-in partner is what caused me to buy after re-evaluating my original $3 target (from $.30). I'm guessing it's Talisman but we'll find out in a few days.

A repost from Stockhouse I made on Tuesday

Thought I would share the CQM.H predicament I found myself in:

After seeing the Friday press release on their Junex farm-in, I did some research on Canadian Quantum over the weekend and thought it should be valued at $3.00/share based on it's peers (Altai). I made one (the only post at the time) post on Stockhouse Sunday night more for my own sake because who reads a board with a stock ending in .H? I live stateside and knew I couldn't buy it today but would have to wait until Tuesday. I was hoping (no...praying) that it would stay undiscovered for 24 hours to allow time to get in. Before I headed off to the pool for the day with the kids, I had a 30 minute phone conversation with the person who owns 60% of the outstanding shares (about 2.7 million of the 4.6 million outstanding shares). This lady (yes it's a she) is completely "clued in" to what is happening. She gave me the background as to how Fairlady Energy owned much of the land in the Utica shale focus area in the 1990's to early 2000's but due to financial difficulties, was eventually taken over by Canadian Quantum. At one time 4 or 5 years ago, they were in discussions with Altai about a possible merger but an agreement couldn't be reached. They've tried to raise money in the past but no one wanted this land. They even got shafted by a crooked broker in Montreal on a $7 million PP that never got filled as the broker bounced several checks for some of the funds and the deal eventually fell apart.

The Nicollette property is 55,000 acres next to Altai and they and Junex will own it 50-50 once Junex drills 2 wells over the next 18 months. They also own other property in this play. They had owned the majority of land where Talisman drilled Gentilly #1 but had their land diluted down (farming out to Terrenex/Questerre) to the point where they now have a 3.75% WI in this permit and varying interests in a few others. I couldn't get all the details on all of the land since after all this was a 9:00 AM call over coffee (both her and I).I came up with my $3.00 target giving CQM.H the same $500/acre valuation that Altai currently has (55,000 acres x 50% = 27,500 net acres times $500/acre = $14 million market cap @ 4.5 million shares out = $3.00/share. This does not include the 3.75% WI on the Gentilly #1 land or other land they have.Back to this I head to the pool about 9:30 hoping to come back to see the stock still at $.30. Well you know where it finished today. I'm not even sure I would have been able to buy shares of companies on the NEX (which is a Venture listed stock that has been relatively inactive) through my Scottrade account but I was hoping to find out tomorrow. I was told they will look to get back onto the Venture (they are still fully reporting) and maybe with a $3 stock price it may be easier (not sure of all the rules).So there you have it, I identified a 10 bagger stock on a Sunday Night and due to a Holiday, had to wait 24 hours to buy it and as a result, didn't make a penny for my troubles. As I said, my target was $3 so I would hesitate to buy at this price although the 3.75% WI on the Gentilly land and their other property may move the share price higher.

One other point, there is 4.6 million shares out:

My Lady Friend: 60%
Her other half: 23%
The lucky ones who bought Friday or this Morning 17% or about 800,000 shares of float.

No need to shed a tear as I still have my life.... which is more than the men and women we celebrated today who died fighting for the freedom's we now enjoy.

Saturday, May 24, 2008

Busy researching the Maritime Shale this weekend

Hope all of you stateside are enjoying the long weekend. I'm off to King's Island tomorrow for the day so no thoughts of shale gas for at least one day. I'll be posting a report on the Maritime shale Monday night on the website. I do my own research before buying a stock so I thought I would share it with anyone who is interested. The Maritime shale play is a bit riskier than the Utica shale play due to it's early stages but this is also reflected in the share prices of the participants. One company I keep mentioning, Contact Exploration, is being given $0 value based on my calculations for their two promising shale gas plays. I like them the best out of the Four Horsemen of the Maritime shale.

On the Utica shale front, Altai was the star performer Thursday and Friday as it appears Lehman (a major institution in the US) started buying in on Thursday and Friday on any dips. It must be discouraging to the nearly 400,000 short shares that are all underwater at the moment and margin calls may be at hand if the move continues next week. Altai and Questerre have similar short interest even though Questerre has 5 times the number of outstanding shares. A short squeeze would propel Altai to $3.00 rather easily.

I use Scottrade for my investing and since it is a holiday in the States, I will not be able to buy or sell Monday. I'm hoping for a "no news" day (sorry to my friends north of the border).

One final item...I have found a very interesting company that looks to be tremendously undervalued based on comparable companies but I'm not quite sure I can take advantage of it. I'll have more on this next week but it is a direct shale gas play.

Again, have a great weekend all.

Wednesday, May 21, 2008

WOW....What a day for the QEC and JNX

It all started overnight where Oslo pushed up QEC by 40% on the news that a $100 million investment in the QEC-Talisman land would be rolled out in 08-09. QEC then did a financing at $4.70 giving them the cash and then some to play with Talisman. Junex agreed to drill on a 50% farm-in and saw their shares shoot up over 20%. ATI and GMR were up a few pennies as their managment seem asleep at the wheel in doing any type of promotion. This all on a day when the overall market tanked big time.

Have to watch the Idol final with the kids so I will leave you with this. There will be another 4 Horsemen of the Maritime shale highlighted this weekend. This is the last of the major shale gas basins in North America that is just about to break out huge. One stock, Contact Exploration (CEX.V), is one of the Four Horsemen of the Maritime shale and has the most acreage in the area. They are a $20 million market cap company with 30% of a just announced 69TCF gas-in-place shale property on Nova Scotia (twice that of the entire Quebec Lowland play). Triangle has gone up nearly 100% since Monday on the news while Contact is up only 30%. Unlike Forest Oil on the NYSE, the 70% partner (Triangle) is on the OTCBB which precludes Contact from announicng this find (which was announced Monday by Triangle). This, even though the engineering report was done by one of the largest, most reputable engineering firms in the world. Triangle will be bringing in a major partner in the next 3 weeks to drill this out horizontally. Contact will "indirectly" reference this in a future release but smart investors can get in now prior to the shale gas herd piling on. I'll have a research report out this weekend.

Tuesday, May 20, 2008

Only time for a few points tonight.....................

(1) Altai broke-out today as GMP was relentless buying up shares and $2.50 is in sight
(2) PCQ surprised in it's short-lived 1-hour pull-back before surging over $1
(3) 30% of 69 TCF of shale gas-in-place (twice the amount contained in the entire Quebec Lowland play according to Forest Oil/Encana) for an $18 million market cap company that is the last of the "unknown", small-cap North American shale gas plays that is ready to double within the week. I'll have more details this weekend and am hoping to put together a research report but for now please do your own research on Contact Exploration (CEX.V).

Monday, May 19, 2008

Looking forward to the week ahead.........

No news today from the Lowlands but with the commodities and other nat gas plays doing well in the US markets, the carryover should be positive when the Canadian markets open on Tuesday. I'm sticking my neck out and predicting that ATI climbs over the $2.00 mark during the day and closes over it as well. The MOMO's have left ATI for PCQ so I see little stock overhang at the moment. My short term predictions are usually fairly poor so don't bet the ranch on it.

I sold out of a gold exploration name today on the AMEX to have available cash for a stock I was researching over the weekend. I'm hoping it doesn't halt in the morning as the potential does exist for one based on recent events. I'll have more to say on this stock tomorrow. Stay tuned.

Thursday, May 15, 2008

Most of the Lowland plays were screaming today

On no news whatsoever, the lowland plays bottomed today and reversed a 3 day trend of losses to post solid gains. PCQ announced after the close that they had taken a 30% interest in Squatex, a private company with land adjacent to Molopo on the eastern edge of the land Forest Oil shows as prospective. They needed the funds in part to renew their permits and decided to farm-out some of their land to PCQ. Word may have leaked out prior to the announcement as they were up 71% on the day. If they fall tomorrow, we'll know that word had leaked prior to today.

Tuesday, May 13, 2008

Thanks to a reader for pointing out Sprott holdings

A reader today pointed out that not only does Sprott hold 18.2% of ATI, they also own 15.8% of GMR and 14.8% of QEC. Nothing like cornering the market. All Four Horsemen fell hard at the open and then struggled to gain anything back all day. I've mentioned on Stockhouse that I expect several 20-30% corrections as this play develops and it looks like we are in one now. These tend to last 3-4 days and I would expect a bottoming tomorrow with a rebound by Thursday. Nat gas and oil were both up today.

I saw the first frenzy develop on a Quebec shale gas play as GIE Environment Technologies (GIE.V), a tiny oil/gas services remediation company based in Montreal, climbed from $.035 to $.30 today before falling back to $.11 at the close on over 5 million shares traded. Looking at the financials, they have revenues of about $1 million a year with no debt and about break even income. They have a tiny 20 million shares outstanding. These are the types of companies that will profit tremendously in the years ahead as this play develops. Companies in these industries tend to trade at 2-4 times sales which would put the market cap at $2-$4 million or $.10-$.20/share. I would expect it to trade in this range and spike up on any positive developments in the area.

Monday, May 12, 2008

Interesting trading in Altai today

Today saw Cormark (Sprott) buying over 450,000 shares of ATI which straight-lined the price at $1.84-$1.85 most of the day. This after a May 9th Sedar filing showed they owned approximately 18% before today. It's obvious that Sprott has chosen Altai as their primary Horse in this play. Altai was the only one of the Four Horsemen to finish up on the day. Nat gas and oil finished down which tempered the excitement over Encana's announcement that they would be splitting into two companies, one focusing on their oil sands and one on their nat gas plays. They specifically mentioned their focus on unconventional nat gas plays as one of their primary focus areas going forward.

I mentioned on Stockhouse that I find it extremely interesting that none of the Four Horsemen have announced a deal since the 4/1 Forest Oil announcement (note Junex announced a deal on 4/1 with Forest Oil). If this was a metal play or conventional gas/oil play, you would have staking and deals going on almost daily. However, most of the prime land has already been taken up and no one wants to part with this ever-appreciating land play. Altai has the largest land play around the discovery holes that hasn't yet been jv'ed with a partner.

Saturday, May 10, 2008

Quebec Shale Gas Play vs Horn River, BC

One of the many reasons why I feel the Four Horsemen of the Quebec shale gas play should be awarded a much higher relative valuation than players in the Horn River BC area is the potential for year-round drilling and the pre-existing infrastructure already in place. This article highlights some of the negatives of the Horn River play.

Sunday, May 4, 2008

Blogging about the St. Lawrence Lowlands Utica Shale Play


Welcome to the Stateside Blog. I'll use this space to share my commentary on the news of the day regarding those events that impact the companies involved in the St. Lawrence Lowlands Utica Shale Play (whom I have affectionately coined "The Four Horesmen"). My goal is to update this blog daily but my business and personal time commitments may sometime take precedent. Please feel free to share your comments as well as any news that may impact the players that I may have missed.

Again, welcome aboard and thanks for reading.

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