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Junior Oil & Gas Company Signs Letter Of Intent
By: AllPennyStocks.com News
July 28, 2009
Nothing succeeds like success, the saying goes, and in late July, it seemed to hold true for Austin-based North American Energy Resources Inc. (OTCBB:NAEY). Only days after announcing it had achieved more momentum on the oil and natural gas exploration front – momentum on which this site commented last week – the company announced it had entered into a letter of intent to acquire 120 mineral acres in Washington County, Oklahoma.
It’s something which ought to get investors’ pulses racing, as currently there are six wells drilled on the property, four of which are currently shut in, but produce natural gas. Company President Ross Silvey believes that, with natural gas prices on their way above the $5.00 U.S. mark per thousand cubic feet (mcf) by the end of the year, Washington County is where it’s at for NAEY.
For it was on this plot of land recently that potentially thousands of barrels of recoverable oil was found – while NAEY was apparently looking for natural gas – thus bolstering America’s hope that a treatment, if not a cure, could soon be found for the country’s addiction to foreign oil. The area was the hub of the Oklahoma oil boom of the 1920s, but was abandoned when oil prices plummeted in the 1970s as more of the black gold was being purchased from offshore.
NAEY is an emerging company – only three years old, and public for less than one year - with the sole purpose of extracting coal bed methane from coal beds mixing unconventional methods with new technology. With new awareness of the need to decrease America’s dependence on foreign oil, it’s a company that bears watching.
With more attention being focused on natural gas as the wave of the future, including powering motorcars, NAEY looks poised for even more success. It looks to cash in on the lucrative natural gas-powered vehicle market, led by Honda, and with Washington County looking to produce up to 145 mcf per day.
There are bright spots on the oil front, too. Analysts are projecting oil prices to more than double by the end of the year, so folks should not get too comfortable with prices where they are. Also, so the inference goes, consumers should more fully investigate a conveyance powered by natural gas. It could be the more environmentally, economically and patriotically sound thing to do.
On the day the news was announced, NAEY closed at 55 cents a share, strategically placed between its 52-week high of $1.65, achieved in the middle of May, only to tumble to six cents in early June. With the 120-acre lease almost signed, sealed and delivered, the company looks to get down to business, extracting the oil and gas from the earth, and taking its bottom line with it.
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