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WEDNESDAY EDITION April 24th, 2024 |
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Energy UpdateBob Moriarty The best time to buy any energy company, where you face the least risk and the greatest opportunity, is when they are about to drive a new well. We have a clutch of oil/natural gas advertisers on the verge of spudding what could be giant holes. With energy prices now recovered from the rotten prices of the last six months, it probably is a good time for investors to be looking at the juniors. Pennant Energy Inc (PEN-V) starts off our list today. The company boasts of a remarkable 86% success rate in drilling with over 430 completed wells yet has only 12.5 million shares outstanding. They have entered into a 50/50 joint venture on a oil/natural gas property in Alberta with another advertiser, Austin Developments (AUL-V). Pennant and Austin are targeting a monster potential formation in Alberta on two parcels of land which offset a past producing well which produced 600 BPD oil. The past producing well showed a history of cumulative production of about 400,000 barrels of oil and 550 million cubic feet of gas. Full details of the Kaybob and the Bronson projects can be found here. The well will be spudded this month and plans call for a 9,000 foot deep well which should take about three weeks to drill. Pay close attention to both companies and the news. Each company carries such a tiny market cap that success will soon reward the quick investor. And in turn, Austin Development is about to begin drilling on another joint venture with another advertiser, Montello Resources (MEO-V). Montello is the operator on the project. This project, now renamed the Morgan Highpoint project is located in Morgan county Tennessee. Full details can be found here. I wrote up the project and the two companies about four months ago. The plans for drilling slipped slightly as Montello added key properties to their existing land position. Plans now call for driling within a few weeks. This is another exciting “swing for the fences” drill program where success would instantly drive the stock price of all companies involved much higher. Watch them closely. But we have some exciting stories which have pretty much been ignored by the market even though the companies have had remarkable business success lately. Horizon Industries (HRZ-V) drilled a successful gas well in January with four nice pay zones and the market pretty much yawned. What HRZ calls the Funk #2 will should double cash flow and the market cap of the company but the market place hasn’t understood it yet. This is much better than being on the verge of drilling a nice well. This is when you completed a nice well, NG prices are on the rebound and no one notices. And one of my all time favorite energy stocks, subject of a couple of pieces in the last 18 months, is Running Fox (RUN). Originally a gold/energy play, RUN continues to meet gas production success, has bought and is operating a wildly successful oil field services company, has invented and is testing a new drill fluids recovery system and has just added a heap of uranium prospects. I have loved the company since I first met and talked to Fox President Michael Meyers. The company may be a little complex to understand but they know profit and how to build a business. I love all these companies. We own shares in them all and have participated in private placements in most of them. They are advertisers and we are biased as we can be. With energy prices on the verge of a potential explosion as a result of the activities of the gang of fools and criminals now running the United States, it’s a good time to be looking at and buying energy companies.
Pennant Energy
Austin Development Montello Resources
Horizon Industries
Running Fox Resources
Bob Moriarty |
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