Keith Schaefer has gone and done it...appealed to

one’s sense of greed! The editor of The Oil and Gas Investments

Bulletin has had a good track record over the

last while with such picks as Bankers Petroleum, Wavefront

Energy, Bellatrix and a few others. Mind you, that

was in the good old days when oil prices were going up

and oil stocks seemed to be leading the way.

Yesterday, Schaefer comes out with a new pick and

writes, “I have only watched two oil and gas stocks go

from $1—$100 a shares—Niko and Ultra Petroleum. This

could seriously be the third…” It’s Tag Oil, “An independent

report suggests they could have somewhere between

4-20 BILLION barrels of oil on their New Zealand (north

island) oil shale play. It’s very thick, quite porous and

very, very large. There are actually two shale beds. It

looks very similar to the Bakken in North Dakota/

Saskatchewan. Tag owns 2.4 million acres of this play.”

Schaefer continues, “Three wells have shown the

shales are there, but chemistry is still not certain. It might

not be economic; as keen as I am on this company, it is

not a slam dunk. But it is one great exploration play with

unbelievable upside.”

Schaefer points out, “It also has 350 bopd of light oil

from its Cheal property in New Zealand, but the reason I

am buying the stock is because the valuation on the potential

reserves of this company lead me to believe it

could be 10-30 bagger in two years.”

Schaefer also points out one of the key ingredients of

this company in that there are only 30 million shares outstanding

and management owns 11 million and there is

$10 million in the bank.

He also adds however, “The stock has already run

hard, up from
.80 three months ago, so I’m not the first

to discover this story. It’s a tough chart to buy. But I am

getting long here because the stock looks like it wants to

trade higher.”

Schaefer’s comments appeal to one’s sense of greed

and I suspect following his newsletter for information on

this play is going to be very important over the coming

months. Some things must be remembered: He points

out that this is still a high risk/high reward play and if for

whatever reason the shale play doesn’t work, this will be a

big owie!

The other thing to be aware of is that it is going to be a

long time before we get results to find out whether this

play deserves the attention it’s probably going to get in

the coming months...or not.

Disclosure: Bankers Petroleum and Niko Resources: Canaccord Capital covers these stocks and has a Buy rating on them. (Buy: The

stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.) Sterling Resources: Canaccord Capital covers

this stock and has a Speculative Buy rating on it. (Speculative buy: Stocks bear significantly higher risk that typically cannot be valued by normal

fundamental criteria. Investments in the stock may result in material loss.) Ithaca Energy: Canaccord Capital covers this stock and has a

Hold rating on it. (Hold: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months.)

Canaccord has recently led a financing for Bankers Petroleum.