Oil &
Gas Sector Special Report by
Greg Moses - AllPennyStocks.com News Reporter
June 04, 2007 (AllPennyStocks.com Media Inc.) – Global energy demand is ever increasing,
due in part to the industrialization of huge developing
countries like India and China, but also combined with overall
world population growth. Add in the fact that fossil fuels are
limited on the planet. These two core realities spotlight the
Oil & Gas Sector, for its historic success and future
investment potential.
Leading energy experts from around the
world agree on the ongoing future critical importance of
available energy in our daily lives. The facts are crystal
clear regarding the need for stepped-up worldwide energy
exploration and production.
Industrialization normally takes 100 years as
in the example of England. In the case of China, they are only
half way there and will be growing strong for the next 50
years. This explosive economic growth will continue to put
pressure on world oil supplies.
While some of the largest companies in the world are Oil and
Gas companies, we will take a different approach here. In this
Special Report, we have searched out and selected some
interesting Oil & Gas Sector penny stocks to discuss, some
trading on Canadian exchanges, while others on U.S. exchanges.
We will look at a variety of firms with operations in either
Canada, the U.S., or around the globe.
One forward thinking Oil & Gas Sector company keenly sees the
opportunity. Oracle Energy Corp.
(TSX-Venture: OCL),
(Pink Sheets: OECPF)
and (Frankfurt:
O2E) is a Canadian headquartered junior international energy
exploration company. By design, the Company targets the
world’s more underdeveloped energy rich zones for exploration
of oil and natural gas.
Under the symbol OCL, the shares of Oracle Energy recently
closed at $0.28, with a 52 week trading range of $0.22 -
$0.59.
2007 is planned to be a turning point year for Oracle Energy,
as the Company moves aggressively to shift its business focus
from exploration and into production. This Vancouver BC firm
is currently active with drilling projects in resource rich
Texas, Romania and Italy.
Oracle Energy continues to expand its operations and recently
announced that the Company has increased its participation
percentage to 45.84% in the Jonnell-Zamora #1 well. This
project is a re-entry into a Well that was originally drilled
in 1961.
The Jonnell-Zamora #1 well, positions Texas as a possible new
frontier for Oracle Energy. The well sits on a 640 acre oil &
gas lease in Zapata County, Texas. With its demonstrated
natural gas heritage, the re-entry into the Jonnell-Zamora #1
gas well located in the rural Deep South Texas county of
Zapata holds promise. The region, which borders Mexico,
appears ripe for increased energy exploration and production,
aided by today’s technological advances.
The Jonnell-Zamora #1 well was never commercially produced due
to being a dry gas discovery, and no market existed in 1961 to
transport dry gas. Recent re-entry operations had succeeded in
reaching a depth of approximately 7,800 feet with
approximately 26 feet remaining until the first objective is
reached.
Torrent Energy Corporation
(OTCBB: TREN) makes for another interesting play in the sector.
TREN is a growing exploration company focused on developing
non-conventional natural gas reserves in the Northwestern United
States. Specifically, we are talking about coal-bed methane plays
in the Pacific Northwest.
On
Friday, June 01, 2007 the shares of Torrent Energy closed at $1.36
per share with a 52 week trading range of $0.97 - $2.58.
The
current focus of the Company’s Oregon subsidiary, Methane Energy
Corp. is centered on the exploration of the Coos Bay Basin, where it
holds a large land position.
Recently, the Company announced the most significant milestone, to
date at Coos Bay, where the Company holds an 83.5% net revenue
interest. Testing results confirmed that significant gas was
present, as to make the project commercially developable. In
addition, because of the close proximity to the market area, the
Company is expected to earn a price premium on its gas sales.
The Company’s Washington subsidiary, Cascadia Energy Corp. is focused on
the exploration of the Chehalis Basin, where it owns a 60% working
interest in the property.
Torrent reports that it has commenced exploratory drilling
operations at the site. The drilling program, will test for coal
thickness and gas content, and is aimed at establishing the
estimated coal-bed methane gas available to be recovered.
In
the global search for energy, Monarch Energy Limited
(TSX-Venture: MNL) has a significant focus on North Sea
Projects. Its business model seeks to leverage the development of
strategic alliances and joint venture arrangements with experienced
Exploration and Production companies in the North Sea.
Monarch Energy recently closed at $0.28 per share, with a 52 week
trading range of $0.18 - $0.35.
Earlier this year, Monarch announced participation in its third high
impact North Sea
project. Under the deal, the Company is paying part of the cost of
acquiring a seismic data survey and drilling a test well. In
exchange, the Company is awarded a 10% interest in the project
located in Quad 30 in the UK North Sea. The Company’s two
additional North Sea ventures are located in Quad 12/17 and Quad
41/42. If successful, these three projects have strong upside
production potential.
At
home in Canada, this Vancouver, BC headquartered firm also owns
various working interests in producing properties across Alberta.
Another important segment within the diverse Oil & Gas Sector is the
Canadian Oil Sands. The Canadian Oil Sands may be Western Canada’s
new “Black Gold”. The activity is much like an “oil boom” of old.
There are 175 billion barrels of proven oil reserves there. Within a
few years, the oil sands are likely to become more important to the
United States than all the oil that comes to us from Saudi Arabia.
The
oil sands represent the primary feed stock for petroleum production
throughout the entire Albertan Oil Region. Today’s oil pricing
levels have made the extraction of oil from the tar sands much more
attractive than in the past. The reserves are so vast in the
province of Alberta, that they will help solve America’s energy
needs for the next century.
Estimates of 175 billion barrels, is second only to Saudi Arabia’s
260 billion, but that calculation is limited to what companies can
extract with today’s technology. The estimate of how many more
barrels of oil are buried deeper underground is staggering.
Canada is now the new frontier in non-OPEC oil and gas
developments. Canada’s oil sands could help meet the global energy
demand over the next 100 years. This area within Alberta represents
the second largest known oil reserves outside of Saudi Arabia.
Experts predict that Canada may well soon become the Single largest
source of imported Foreign Oil into the United States. The facts
are clear that the oil sands deposits in Alberta Canada will
definitely be a significant factor in the Oil & Gas Sector, for the
years ahead.
Several Technology, Oilfield Services and Oilfield Equipment
companies make for interesting plays in the Oil Sands sector. One
interesting firm is Ivanhoe Energy Inc.
(NASDAQ: IVAN) and
(TSX: IE)
which offers a proprietary and patented heavy oil
upgrading technology (HTL). The process upgrades the quality of
heavy oil and bitumen by producing lighter, more valuable crude oil
at lower costs and in smaller sized plants then conventional
technologies.
Under the symbol IE, Ivanhoe Energy closed at $1.85 on Friday, June
01, 2007, with a 52 week trading range of $1.32 - $3.14.
Ivanhoe has successfully produced a high quality product, at its
heavy oil upgrading
Demonstration Facility in California. This high quality upgraded
oil was produced using an innovative, yet simple operating method.
This new operating mode represents an additional processing option
for Ivanhoe Energy. This new model is appropriate for a number of
identified market opportunities including bitumen production in the
Athabasca Oil Sands of Western Canada.
This
new approach significantly extends the flexibility of the Company’s
business model by
improving the economics in certain field applications. Further,
this new process allows Ivanhoe to better tailor its plant design
configurations to market opportunities. The Company has applied for
separate patent protection for this new technology breakthrough.
Another interesting firm to watch is Petrostar Petroleum Corporation
(TSX-Venture: PEP). The Company is an independent government
licensed Oil & Gas Operator, focused on the development of existing
and proven heavy and medium crude oil assets. PEP has developed a
process utilizing patented and patent pending Drilling and Recovery
Systems to enhance oil recovery.
On
Friday, June 01, 2007, Petrostar closed on the Venture Exchange at
$0.44, with a 52 week trading range of $0.11 - $0.44.
Earlier this year, the Company completed the milling and fabrication
of the Down Hole Tool which is a device that will produce heat and
in turn steam. The steam will stimulate the oil drilling area,
making more heavy oil available for recovery.
Since May 2nd, PEP has been field testing its Enhanced
Oil Recovery Technology also known as its Down Hole Heating Device.
The success of the down hole tool test will be a significant
milestone to be achieved by the Company.
The
key here is that it brings the Company one step closer to proving
and ultimately commercializing the technology. The Down Hole Tool
has the potential of economically revitalizing tens of thousands of
proven North American medium and heavy oil wells that have been
suspended due to insufficient reservoir pressure and drive.
The
DHT may truly be the optimal technology to provide the solution to
enhance the production of heavy oil, as 85% of North America’s heavy
oil reserves are shut-in or suspended.
All
being said, investment opportunities within the, expansive and high
potential, Oil & Gas Sector are vast and varied. The risk to reward
equation runs the gambit from conservative to speculative. It
remains true however, that Oil & Gas can be a very profitable
sector, and one that is key to consider in a diversified portfolio.
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