RE: The Largest Known Oil Reserves In The WorRE: The Largest Known Oil Reserves In The World -
Nine Good Reasons to Like This Oil Sands Name -
September 28, 2006,
With all the talk about oil sands in recent years, most people
(including me) thought the oil sands boat had set sail long ago.
Nevertheless, I've become familiar with a very interesting oil
sands name, one which I haven't heard discussed much before,
and I currently own.
So today, I present to you -
CanWest Petroleum (AMEX: BQI - News).
1. Upside-downside very attractive.
Based on its current stock price of $3.82 per share and its
current estimated reserves of 525 million barrels, the stock
is trading at an EV/BOE of about $1.59.
Although that might sound like a fair valuation when considering
the valuations of Synenco and UTS, which trade at about
$1.00 and $1.50 EV/BOE, respectively, there’s more to BQI.
Specifically, the company is in the process of drilling 100
delineation wells and 150 exploratory wells, which could bring
that reserve estimate up to as much as 1.5 to
2.0 billion barrels.
Assuming the market continues to value BQI shares at the same
EV/BOE of $1.59, the value of the shares could rise to $10.31
to $13.75 -
when the company plans to release the data -
from its current drilling program.
That equates to 170% to 260% potential return.
On the flip side, assuming a conservative $1.00 EV/BOE on
the company’s estimated 525 million barrels (and no additions
to reserve estimates next year), you get a stock price
of $2.27 per share.
If you like to look at things from a upside-downside point
of view, you get a ratio ranging from 4.2x to 6.4x depending
on whether you use $10.31 or $13.75 for the upside.
That’s over the next year.
It’s important to note that that company to date has only drilled
less than 2% of its land.
Management believes that its land holds 4 to 6 additional projects
of equal magnitude to its current project.
Although the timing of those additional projects is unclear,
the potential of those projects could be enormous.
2. Holy acreage Batman!
When most of us think of oil sands, we immediately think of
the Alberta province of Canada.
Can you say Saskatchewan?
CanWest currently controls an enormous amount of land in
Saskatchewan, which turns out to be the largest contiguous oil
sands acreage position in Canada.
Specifically, the company holds permits to 850,000 acres in
the Saskatchewan province of Canada.
However, the company has to relinquish 342,000 acres back
to the Saskatchewan government in the future.
Even after the required give-back, the company will have control
of 508,000 acres.
To put that in perspective 508,000 acres equates to 70% of
the combined acreage of Shell, Suncor, Syncrude, Synenco/Sinopec,
UTS/Petro Canada/Teck and Total S.A./Enerplus.
All told, those companies control 700,000 acres of oil sands
property.
3. Experienced management with track record of success.
The company is headed by Chris Hopkins, an industry veteran
of more than 30 years.
This isn’t Hopkins’ first dealing with oil sands;
he helped found Synenco and pioneered its drilling program,
which has proved 2.4 billion barrels of bitumen and is expected
to produce 100,000 barrels per day of synthetic crude by 2010.
Importantly, management has been on time with meeting its stated
goals over the past year, which should give you comfort that
future milestones will be met on time as well.
4. Third party data so you don’t have to believe what management says.
If you are one of those people who tends to take company estimates
with a chunk of salt, this might make you feel better.
Independent drilling data was released on August 29, 2006 by
Norwest, the same company who assessed reserves for Synenco
as well at a number of bellweather oil sands companies.
According to the management, the individual who did the assessment
for BQI was the same person who did the evaluation of Synenco’s
core samples.
Norwest’s reserve estimate was 525 million barrels.
Making that estimate more impressive is the fact that CanWest
only spent $10 million to find that 525 million barrels.
That equates to a finding cost of only $0.02 per barrel.
5. Under-followed stock with no institutional sponsorship.
Currently, BQI is not covered by any investment banks or brokers
and only a couple of selectively-disseminated newsletters.
That is because up until August 24, 2006, the stock has been
listed on the bulletin board.
However, with the Amex listing, the stock will undoubtedly get
put onto institutional investor radars, especially as management
gets the BQI story out and get a message forum on Yahoo as
all other AMEX listed companies got as normal if not a particular
group are doing the discriminatory acts?
6. Weak oil and gas investor sentiment has brought the boat back
to shore.
Despite releasing 3rd party reserve estimates and getting its
shares listed on Amex, BQI shares are hovering at $3.82 per share,
or 57% below its 52-week high reached on May 10, 2006.
Importantly, back then, the company had not been listed on Amex
yet and hadn’t released its estimates on potential reserves.
The culprit leading to the decline in BQI’s share price is
undoubtedly the weakness in oil prices, which have recently seemed
to settle at the $60 per barrel area about a week ago.
The weak oil prices effectively brought the BQI boat back to shore
for all investors who hadn’t heard of CanWest until recently.
“Better listing + more reliable reserve estimates = lower stock
price?”
Not in this math class.
It’s more like “better listing + more reliable reserve estimates +
lower stock price = buying opportunity.”
7. Invest in BQI and you’ll be in good company.
Resolute Funds, Fidelity, and Wellington are listed among BQI’s
top shareholders, owning 4.9%, 4.3%, and 3.5% of outstanding
shares, respectively.
If my analysis is faulty, at least I know I’m as dumb as some
of the smartest guys on the street.
8. Management now has a new, more-polished investor presentation
and is becoming more active on the road show front.
After seeing BQI’s management investor presentation several weeks
ago, and again just recently, I have to say I am pleasantly
impressed with the movement up the learning curve.
The first presentation I attended was lengthy, detailed, and
contained some good information, but definitely lacked the zip
needed to get me excited about the BQI story.
Just the other day, I saw management present again.
This time, the presentation was much more concise and contained
only data and information critical to an investment decision.
Kudos to management for giving the Street the information it needs,
in a way that can get it excited about the BQI story.
Recently, the company has been through Boston and New York,
among other places, visiting potential institutional and
retail investors.
9. Perfect story for the sell side.
Based on my knowledge of what sell side guys look for in
new coverage ideas, I believe the BQI story is perfectly ripe
for an initiation.
The company story is unique, straight forward, and, for the
most part, unknown.
Moreover, the stock has a fully-diluted market cap of about
$820 million and has traded about 2 million shares per day
over the last 6 months, which makes it relatively liquid
(granted, the volume has been lighter in recent weeks).
With the potential for significant upside over the next year,
driven by specific events, I’d have to think that more than
one sell side analyst is just waiting to pull the trigger
on his/her initiation.
Note: I garnered a large portion of the information for this
article from The Berry Report available to everyone CanWest’s
IR company website.
https://today.reuters.com/stocks/InstHolders.aspx?symbol=BQI&fs=1
https://www.investorshub.com/boards/quotes.asp?ticker=bqi
https://www.investorshub.com/boards/board.asp?board_id=6668
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True Energy Trust compared to BQI=CanWest , SU=Suncor and ECA=Encana -
welcome - here is some more TUI.IN info -
https://www.investorshub.com/boards/board.asp?board_id=7114
https://www.investorshub.com/boards/board.asp?board_id=6668
CanWest Petroleum and Oilsands Quest Announce Assessment
of Bitumen Resources from Independent Geologists -
CanWest Petroleum and Oilsands Quest Announce Assessment
of Bitumen Resources from Independent Geologists -
CanWest Petroleum Corporation -
(AMEX: BQI) and its subsidiary -
Oilsands Quest Inc. -
announce receipt of the independent geological consultants'
assessment of in-place volumes of bitumen in the area
covered by Oilsands Quest's Phase I drilling program
in northwest Saskatchewan -
The Phase I program consisted of drilling on two blocks
on Oilsands Quest's Permit PS00210, located in Township 95,
Ranges 24 and 25 West of the Third Meridian.
The combined Original-Bitumen-In-Place (OBIP) High Estimate
for the two blocks drilled is 525 million barrels.
In the west block drilled, the OBIP High Estimate is
449 million barrels and is based on geological modeling
that included 13 bitumen bearing drill holes.
In the east block drilled, the OBIP High Estimate is
76 million barrels and is based on geological modeling
that includes only 6 bitumen bearing drill holes.
OBIP is the gross volume of bitumen estimated, at a
particular time, to be initially contained in a reservoir
before any volume has been produced and without regard
for the extent to which volumes will be recovered.
The OBIP estimate was based on the evaluation of cores
and well log data from holes drilled in the Phase I program.
The estimate, prepared by Norwest Corporation of Calgary,
was made in accordance with the Canadian Oil and Gas
Evaluation Handbook (COGEH), which is a primary reference
for reporting resources under National Instrument
51-101 Standards of Disclosure for Oil and Gas Activities.
The COGEH can be obtained online
(https://www.petsoc.org).
Norwest's estimate is classified as a "P10 High Estimate",
which is consistent with the reporting guidelines of
National Instrument 51-101 and COGEH.
Norwest's OBIP High Estimate of 449 million barrels
for the west block is based on extrapolation of the
drilling data out to approximately 1,000 metres from
the nearest drill hole.
Management's OBIP estimate of 250 million barrels,
which was announced on July 6, 2006, is based on
extrapolation of the drilling data out to approximately
600 metres from the nearest drill hole.
"The Norwest assessment is consistent with our internal
numbers," said Christopher H. Hopkins, President and
Chief Executive Officer of CanWest Petroleum.
"It is a reflection of the confidence Norwest is able
to assign to the results of our exploration program."
The areas covered in the OBIP estimate represents
approximately 1.4 percent of Oilsands Quest's total
permit lands and are located approximately 50 kilometres
(30 miles) east of Suncor's Firebag operations.
Oilsands Quest's exploration permits were granted under
Saskatchewan's Oil Shale Regulations, 1964, and will
expire in 2009 unless converted to leases or further
extensions are granted.
Assumptions about the commercial viability of resource
potential or whether currently commercial recovery
processes will be effective cannot be determined
without further drilling and analysis.
Summer & Winter 2006 Exploration Plan
Up to 250 test holes are planned for Oilsands Quest's -
summer 2006 and winter 2006 drilling programs -
which will include about 100 holes in the discovery area -
and up to 150 holes in a larger area to identify -
resource leads.
Updated Web Site
The web sites of CanWest Petroleum and Oilsands Quest
have been combined and are now updated -
https://www.canwestpetrolem.com
or
https://www.oilsandsquest.com
About CanWest
CanWest Petroleum,
a public company incorporated in the State of Colorado,
is engaged in a variety of projects in the oil and gas
industry in Western Canada with an emphasis on oil sands
and oil shale.
Its lead project is an oil sands exploration program
being conducted in the Province of Saskatchewan by
its subsidiary, Oilsands Quest Inc.
Forward-Looking Information
Except for statements of historical fact relating to----or opinions should change except as required by law.
The reader is cautioned not to place undue reliance on
forward-looking statements.
Cautionary Note
Safe Harbor statement under the Private Securities Litigation
Reform Act of 1995:-----other factors discussed in
CanWest Petroleum Corporation's various filings with
the Securities and Exchange Commission.
Cusip# 138 748 108
Source: Market Wire (August 29, 2006 - 6:30 AM EST)
News by QuoteMedia
www.quotemedia.com
https://www.investorshub.com/boards/quotes.asp?ticker=BQI&qm_page=75486&qm_symbol=BQI
https://www.investorshub.com/boards/board.asp?board_id=6668
Drilling at first well -
(6 -11 - T95 - R25 W3)
https://www.oilsandsquest.com/our_projects/oqi_gallery.html
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