Saturday, February 28, 2009

To end the argument on the US Govt manipulating the gold price

As a firm believer in the US FED and other Central Banks manipulation of the gold price, I am often asked to show proof that the US engages in such activity. I need to look no further than Alan Greenspan's own words still etched in the Federal Reserve's website confirming such manipulation. He states.....

"The vast majority of privately negotiated OTC contracts are settled in cash rather than through delivery. Cash settlement typically is based on a rate or price in a highly liquid market with a very large or virtually unlimited deliverable supply, for example, LIBOR or the spot dollar-yen exchange rate. To be sure, there are a limited number of OTC derivative contracts that apply to nonfinancial underlying assets. There is a significant business in oil-based derivatives, for example. But unlike farm crops, especially near the end of a crop season, private counterparties in oil contracts have virtually no ability to restrict the worldwide supply of this commodity. (Even OPEC has been less than successful over the years.) Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

The next question I get asked is why would the US FED and other Central Banks want to cap the rise in the price of gold. I'll let readers form their own opinions on the answer.

Monday, February 23, 2009

Forest Oil Announces Record Results

A nice headline but the real news for us Utica Shale investors was the so-so results on the Utica Shale horizontal drilling as stated in the release:

Utica Shale (60 – 100% WI) – Forest drilled and completed the first three horizontal Utica Shale wells in Quebec's St. Lawrence Lowlands, which were successfully cased and fracture stimulated in four stages with rates ranging from 100 – 800 Mcf/d. Frac load flowback was incomplete due to the lack of coiled tubing units in the area. Forest expects to continue to test its wells after the winter season is over. Although sustained rates were not as high as anticipated, the tests have allowed Forest to identify the section of the shale it intends to target in future test wells. Each of the wells were tested in different sections of the Utica Shale with an objective of gathering data on productivity to allow optimization of future completions. Furthermore, Forest proved the ability to successfully drill the wells horizontally and pump multi-stage slickwater frac jobs without major operational issues.

Hopefully on the call, we'll get some clarification on which sections of the Utica were better than the others (shallow vs deep). Although an initial disappointment, we will hopefully hear better news from Talisman next week on their testing.

Monday, February 16, 2009

February Investor Alert now available via email


In my January alert, I recommended Golden Arrow (GRG.V) at $.20/share and it has since appreciated 25% in a month. My February alert is now available and I believe this stock has the potential to double or triple relatively quickly as it sits at its 52-week low while several other gold juniors are up 2-3 times from their November/December lows (especially those that were priced at the level this stock is currently priced at). I've sent an email out today to those who have signed up so if you want to receive the report, send me an email to and I'll forward the report to you. These are complimentary issues for now but I will be moving to a fee based service soon. By the way, I will have an Altai quarterly update out by the end of this month.

Tuesday, February 3, 2009

Forest press release today

Forest issued a press release on their 2008 results and 2009 plans.

Two things jumped out:

(1) They will do very little work in the Utica in 2009. They are in no hurry since they have almost 10 years to develop the play. In the Haynesville and some of there other US shale plays, they have a limited amount of time to drill the wells based on the leasing structure or they will lose the claims. Therefore, they are focusing on the US claims. This is the problem Gastem/Junex will run into as they let Forest be the operator on some of their permits and Forest can take their good old time to develop it. Altai has the advantage of looking for the right partner who wants to drill now, not later.

(2) Forest is getting NYMEX minus $1.25 on their gas prices from the US whereas the Utica play will get NYMEX plus $1.00. This $2.25 price difference is what makes the Utica so attactive, especially if nat gas price remain low for a period of time.


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