Target of $7.25 (upgrade) Fred Kozak at CanaccordCOASTAL ENERGY(V-CEN) $4.10 +0.24
Take a look at the chart of Coastal Energy to the left and you
know severalthings have gone on. A couple of successful
explorationwells off the coast of Thailand takes a company
with 0production up to almost 10,000 boepd in relatively quick
order. Thestock moves dramatically. Then a few high risk/
high rewardplays don’t work out and the joy is kind of gone.
We had talkedto Fred Kozak, Canaccord’s oil and gas guy,
just lastweek. Looking for his top three picks (the top three is
an everchanging thing depending on whose got a discovery,
who might havea discovery, whose production numbers are
better thanexpected or not, politics in every country, you get
the drift) andsuddenly his top three picks were a little different.
All of asudden Coastal was there because the stock was
down, andcheap and turning along with two other cheapies,
Petrodoradoand Alange Energy, both in Colombia. (We don’t
allow Fred topick Pacific Rubiales anymore because it’s just
too muchblue-chip for us...plus it’s already a 12 bagger for
Fred now).
Anyways, todayCoastal announces the results of their Bue
Ban A-01,A-02, A-05 development wells in the Gulf of Thailand
and this is anarea of their plays that are considered lower risk
and consideredby some to be almost development work. It
mentioned onthe A-01 well that it encountered 24 feet of net
pay in theLower Oligocene reservoir with 14% average porosity
and that theBue Ban A-05 well was drilled to a total depth
of 7,492 feetand encountered 170 feet of net pay. Now that is
a lot of netpay.
The stock has anice bounce today and with 8 development
wells expectedin the area, with some of the wells expected to
produce up toas much as 700 barrels a day, Coastal’s production
could moveupwards dramatically in the coming months.
After that?
After thatthey have a series of almost a dozen more of the
high risk/highreward plays offshore Thailand that could make
the dramaticincreases upwards...or not. For a copy of Fred
Kozak’slook-see at Coastal and why he has a target of $7.25,
e-mail Debbieat Debbie.lewis@canaccord.com.
Meanwhile KeithSchaefer has timed perfectly some additional
purchases forhis model portfolio and the editor of ‘Oil
and Gas InvestmentsBulletin’ hasa piece that is must reading
for Coastalshareholders.