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Ecopetrol ADR Representing 20 Ord Shs V.EC


Primary Symbol: EC

Ecopetrol S.A. is an oil company. The Company operates in Colombia, Peru, Brazil and the United States Gulf Coast. The Company's segments include Exploration and Production, Transportation and Logistics, and Refining, Petrochemicals and Biofuels. The Company's Exploration and Production segment includes exploration, development and production activities in Colombia and abroad. The Company's Transportation and Logistics segment includes the transportation of crude oil, motor fuels, fuel oil and other refined products, including diesel and biofuels. The Company's main crude oil pipeline systems' operating capacity is approximately 1.34 million barrels per day (BPD). The Company's main refineries are the Barrancabermeja refinery, which it directly owns and operates, and a refinery in the Free Trade Zone in Cartagena that is operated by Reficar S.A., a subsidiary of the Company. The Company also owns and operates two other minor refineries: Orito and Apiay.


NYSE:EC - Post by User

Post by SwissInvestoron Jan 24, 2010 3:57pm
583 Views
Post# 16713011

ECOMETALS: Drilling - Little summary!

ECOMETALS: Drilling - Little summary!Introduction

I know it is late and i wrote a lot the lastdays about Ecometals, but i want you to give some more input before thenew week begins and Ec is still trading at these oversold levels. TheVenture is all bout psychlogy and you have to understand why someonesells and why he is buying a stock.
Some easy maths: Most of thesellers sold Ecometals because it was overbought in early january. Whatdoes this mean? They are playing this stock based on technicalanalysis. You can be sure that someone who sells at an overbought pricehe wants to buy the stock cheaper and you can be sure he will do thisat an oversold price. So many on the sidelines will buy back at thefirst sign of an upmove.
Summary: Those who sell an overbought stock are looking to buy back in when the stock gets oversold. Psychlogy.

Solet's move to the drilling progress, my expectations, my strategies andmy interpretation of the coming results of the first drill hole.

Progress

Westarted to drill the target with the lowest ip-anomaly on January 4th.We have a new drilling team and had some technical programs during thedrilling so that the drill hole wasn't completed in 2 weeks(likeexpected).
The plan was to drill the hole up to a depth of 200m withtarget mineralization starting at about 130m (first he have to cometrough the sandstone covering the target mineralization, just like FDNwhere some of the targets were also covered by sandstone).
Duringthe drilling progress Ecometals announced the selling of the CondorGold Project for 9Mio $. They stated in an offical press release thatthey want to focus on on Rio Zarza Exploration and their BrazilProperties. The interesting is that they expanded the drilling of thehole to a depth of 250m , which by my information was not plannedbefore.  Nobody of us knows why they made these two steps in the middleof the drilling progress but i am sure that they did it based on theirinterpretation of the progress they made or what they saw whiledrilling (my speculation).

Expectations on the first hole

Weshould not expect a monster hole here, because we are not targeting adepth of 400m. And based on the fact  that the first 130m are sandstonemineralization could start somewhere from there.
The mostinteresting meters of the hole are the last meters. It would be anfantastic discovery if they hit some nice grades at the end of thehole. I am going to explain WHY:
This is the first drilling and sowe get the first information about what's down there and get to knowthe geology better than before. They plan to drill the holes deeper upto 400m (not an official information) if they see the potential.
Inmy eyes it would be the strongest buy if we intersect some gold onlyfor a few meters at the end of the hole. (Some Aurelians/Kinrosscompanymaker holes started with gold intersections from 170m-200m. Yesand they were covered with sandstone for about 100m). So if they wouldhave drilled only up to 200m they would never get those intersectionsthey did. Just an example (not FDN based). Drill 200m. Oh damn, weintersect only 5m with 5g Gold/Tonne from 195-200m. Let's abort thedrilling. BUT the drilling starts at 195, and if you drill to a depthof 400m you can get 205m of 5g Gold/tonne. I know that this example isa bit to easy for such a complicated business like exploration but itshows you how i mean it.
You can be sure that Ecometals is going to expand the drilling up to 5000m even if we only intersect a few meters in this hole.

Strategy

Ipersonally will add huge to my position if we intersect only a fewmeters of gold at the end of the hole. I expect amateurs will sell andcreat a dip in sh. That is were institutional investors and geologistare going to buy shares.

Another scenario is that we don'tintercept gold. This is at the first view a really bad scenario but itis a beautiful buying oppurtunity and the reason why so many bashersare on the bullboard. They know that most people can't interpretate thenews the right way and will scare the sh*t out of you, because theyknow that many weren't so and so confident about the low-ip target.After the dip they will pick up shares and turn into pumpers whileplaying with your psyche and being the most confident people in theworld. Why ? A HIGH-IP target (the 2nd drill hole is perfect for themto pump and promote). I am sure: The first dip after a non-gold newsrelease will be the last buying opportunity ever, because we startdrilling the HIGH-IP ANOMALY targets staring at 0m without make itthrough the sandstone. That is the part where huge speculation willkick in and a huge discovery is possible ( i am not saying that itisn't with the first drill hole>>scenario 3).
Scenario 3:
Weintersect really good gold grades over a nice length. The share pricewill go crazy and we will be at 2-3$ in one week and a 2-digitshareprice sooner than we dreamed of.

Final questions today:

1)Of course the selling of the Condor Gold Project was in the making afew months ago. It takes time to make such a deal. I spoke with Danielsome months ago about Condor Gold and asked him what are the furtherplans. He told me that they first want to start drilling Rio Zarzabefore making further steps.
So the question: Why do you thinkthey made the decision to sell condor gold while they were in themiddle of the drilling progress/finalizing drill hole number one at RioZarza ? Are they so confident about Rio Zarza ?

2)Why was thereNO insider selling all the way up to 1,35? Remember they have 0,10Can$options so why didn't they lock some profits ?
Only Keith RobertHulley sold some shares before christmas (not paid). Do they expectmore reward for their options than 1,35 can$?

I want to write a few sentences more but i am getting tired, and hey it's sunday evening :-)

Cheers!



( i am going to post this tomorrow on my blog...i am to lazy now to tip in all those symbols :-)
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