November 20th, 2014

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The Looming Uranium Crisis: Strategic Implications for the Colder War
Doug Casey  Nov 15  

Is US Oil Production Set to Plummet?
Keith Schaefer  Nov 11  

The Madness of the EUís Energy Policy
Doug Casey  Nov 08  

Oil Market Update
Clive Maund  Nov 03  

Total War over the Petrodollar
Doug Casey  Oct 28  

»» more editorials in the archives

market data

Ux U3O8 Price (Uranium)Nov 17th, 2014
$44.00 +$2.25

»View Commitment of Traders.

expert analysis & newsletter briefs

Caza Oil & Gas Inc.

"Caza Oil & Gas Inc. is our favorite North American play. This is a company that goes from strength to strength. It has a very successful drilling record and has continually added to its production rate over the last two years. It is now almost at 2,000 bbl per day, which could potentially change its valuation and make it a very attractive takeover target by a larger oil company. Plus, it has a very large inventory of potential targets in its territories with substantial seismic data that point to a very large number of drillable prospects. Major expansion would require a significant capex, so Caza is mobilizing at a slow rate. If a major were to take it over, however, it could employ a significant capex plan in a low-risk exploration and development strategy. We think that this company is a potentially attractive prospect for another company to either joint venture or take it over outright.

[Broadcaster initial well results] are extremely attractive because Broadcaster is in the Bone Spring formation. This has become one of the fastest growing oil regions in North America based on improved technology. Horizontal drilling has enabled local operators to multiply production rates several times. Bone Spring underpins Caza's future production growth. Broadcaster is a low-risk operation with the potential to greatly increase production." (11/13/14) - The Energy Report with Angelos Damaskos

Pan Orient Energy Corp.

"Pan Orient Energy Corp. announced the farmout of a 51% interest in its East Jabung production sharing contract to Talisman Energy Inc.; the company retains 49% interest, receives $8M cash and will be carried for one exploration well up to a maximum cost of $10M and a contingent carry on an appraisal well for up to $5M. . .with the option to acquire a 20% interest in a South Sumatra joint study area operated by Talisman. . .Pan Orient investors are receiving a three-well exploration/appraisal drill program in Thailand, a potentially funded multi-well high-impact drill program in Indonesia and a Sawn Lake steam-assisted gravity drainage pilot project in Canada at steep discounts." (11/12/14) - Bill Newman, Mackie Research Capital

Pan Orient Energy Corp.

"Pan Orient Corp. announced this morning that it has entered into an agreement with a wholly owned subsidiary of Talisman Energy Inc., to transfer a 51% working interest and operatorship in the East Jabung PSC. . .under the terms of the agreement, Pan Orient will receive: 1.) An upfront cash payment of US$8M; 2.)A carry on the first US$10M of exploration expenses on the first well, in addition to all the project G&A until the first US$10M has been spent; 3.) A contingent US$5M carry toward an appraisal well, if deemed necessary; and 4) the option to acquire a 20% interest in Talisman's operated South Sumatra Joint Study Area. . .we reiterate our Buy recommendation and have modestly increased our 12-month target price to CA$4/share from $3.75/share." (11/11/14) - Mark Heim, Jennings Capital


"We reiterate our Buy rating on ENSERVCO Corp. . . the company has been growing its well maintenance businesses, primarily consisting of hot oiling and well acidizing. These services are utilized throughout a well's life and are therefore relatively protected even in weaker pricing environments." (11/11/14) - Philip Juskowicz, Casimir Capital

Enterprise Group Inc.

"We rate Enterprise Group Inc. as a Buy. We believe the diversity of the company's services, many of which are utilized beyond energy producers, insulates it from its more energy-focused Western Canadian service peers, which are reflecting the compression in oil prices. Within this context, we view Enterprise as an ideal alternative play to retain exposure to Western Canada with a reduced oil and gas profile." (11/11/14) - Steven Salz, M Partners

featured companies

Avanti Energy (TSX-V : AVN.V)
Enhancing Oil Production in Brazil and Colombia
[news ][website ]

Pan Orient Energy (TSX-V:CAN)
Canadian junior oil and natural gas company based in Calgary, Alberta.
[news ][website ]

Quantum Energy (QEGY.PK:OTC)
Development stage publicly traded diversified holding company with an emphasis in oil field development trading
[news ][website ]

Super Nova Minerals Corp. (SNP:CNSX, OTC:SNOVF)
Oil & gas exploration company focused on developing the Millford Bakken property
[news ][website ]

The Energy Report ()
Investment ideas for saavy investors
[news ][website ]

Torchlight Energy (NASDAQ: TRCH)
Oil Drilling and Working Interest in Oil Projects
[news ][website ]

from the publisher
  Robert J. Moriarty

Welcome to 321energy.

The Driving Force Behind the US Oil Boom

ByJames Stafford
November 6th, 2014

The shale revolution's sweet spot is oilfield services, the lower-risk backbone of the American oil and gas boom that pays off regardless of a play's economics.

Behind the stardom of the explorers and producers who have put themselves on the revolutionary shale map and absorb most of the risk-are the service providers who make up a highly lucrative market segment.

The US land-based rig count rose 3% over the last quarter, reaching a two-year high of 1,870 active rigs. A major factor in this growth has been an uptick in horizontal drilling in the Permian Basin, Texas' revived giant, where the rig count was up 21% year-on-year.

And while oil prices slumped in October, drilling activity continues to rise, according to Baker Hughes, the third-largest oil services company. Baker Hughes' rig count is up 3.8% in the fourth quarter of this year, compared to the third quarter.

RBC Capital Markets estimates that 20,061 horizontal wells will be drilled in the United States alone this year, with that number increasing by well over 1,000 in 2015. Overall, analysts are projecting a 5% increase in the US land rig count next year, with horizontal drilling rigs-already up 24% over last year--being the real movers here.

Oil prices are "no longer the only driver of that bus because continued efficiencies from pad drilling, hydraulic fracturing and increased stages per well continue to increase recoveries and lower costs per unit of oil and gas produced", Natural Gas Intel quoted analysts as saying.

All the drilling poises the oil and gas services industry for big gains. For potential investors, it's a good time, too, because the past couple of weeks have seen oil services oversold after West Texas Intermediate and Brent crude prices took a dive coming off their summer highs.

The Q3 conference calls from industry giants Baker Hughes Inc. and Schlumberger Ltd. were very positive-they see no changes in overall spending outlook from their customers.

Baker Hughes' third-quarter profit rose 10% on higher revenue across all segments.

And even though oil services giants such as Halliburton are low risk and aren't experiencing any downturn whatsoever as a result of the oil price slump, their stocks have been crushed.

Small cap services stocks have fared even worse. But business continues to boom for these operators as well.

Dave Werklund is Chairman of Calgary-based Aveda Transportation and Energy Services -whose stock has gone from $5.85-$4 in the last two months, despite no downturn in business.

At over $100 million revenue, Aveda is the largest pure-play drill rig mover in the United States. Today its footprint covers over 80% of the rig-moving market, from Alberta all the way down to Texas.

"With over 2,000 active rigs operating across North America today, and an average rig being moved approximately 17 times per year, the rig-moving industry is set for phenomenal gains," Dave Werklund, Executive Chairman of Calgary-based Aveda Transportation and Energy Services told

This little known segment is actually a $2-billion niche in the services sector.

Once horizontal wells are drilled from a pad, the fully constructed rig has to be dismantled, moved to the next location using hydraulic walking or skidding systems, and then put back together.

Producers are demanding this work be done faster and safer than ever before. It's a service that continues to be in high demand.

The advent of pad drilling, which allows the drilling of multiple wells from a single pad, is also transforming the services industry from equipment design and leasing to the task of moving the larger loads from pad to pad.

"With the conversion to pad drilling in the US, the size and weight of the rigs have increased exponentially," says Werklund. That was a lucky break for Aveda, as they already had much bigger trucks in their fleet because of the bigger rigs their original Canadian customers used. As soon as they came down to the US, producers began using their services.

The general consensus is that American producers will not stop drilling even with an oil price of $80 per barrel. Instead, they're digging in.

The lesson for investors? While energy service stocks have seen a crushing six weeks-in tandem with oil prices-activity levels have not slowed.

By James Stafford
November 6th, 2014

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November 20th, 2014

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