Connacher Oil Chart & Company Update
posted Jan 9, 2006 at 01:55AM
Connacher Oil Two Year Chart
Connacher Oil Daily Chart
Connacher Oil Weekly Chart
Connacher/Crude Ratio Chart
Just a quick note: I own this and intend to keep holding.
Some reference links.
The reserve report which transformed the stock from a raw speculation to something more resembling an investment grade vehicle.
A Jennings Capital Analysis - a 16 page report covering all aspects of CLL
WORLD'S HOTTEST OIL PLAY
A list of news releases can be found at CONNACHER NEWS RELEASES
Interview with CLL CEO by David Pescod of Cannacord
Interview Dick Gusella President of Connacher Oil and Gas
(note: above interiew added 11 Jan 2006)
A buy reccomendation with some "hyperbolic" price target valuations can be read at:
WEALTH DAILY BUY RECOMMENDATION
Future events that I am expecting for CLL. TO. First I am expecting the company to receive application approval giving them the go ahead to develop their Great Divide property with an initial 10000 b/d production capacity.
From there we should receive confirmations on several previous announcements. This includes their intent to buy a 8000 b/day capacity refinery in Montana. This includes thier intent to buy Luke Energy (Symbol LKE.TO) which has 3500 boe/d production mostly in natural gas: and confirmation of financing capital.
In the late spring and early summer we should get additonal drill results for POD 1, and for the first time drill results for other PODS. So far the drilling has only taken place in 2% of their property. Although one cannot make straight line extrapolations there is obviously room to grow already impressive numbers
CLL also has 35% ownership in PDP.TO, a company which has found oil in nearly hole they have drilled. In the future PDP will be drilling for elephant type natural gas targets at off shore Peru. By "elephant" I mean potential trillion cubic feet targets (according to David Pescott of Cannacord). The oil drill results in Argentina helped keep CLL buoyant through the price correction in crude oil itself.
PDP does contain the one red herring that I could find in this story. Although CLL's assets are in Canada, and thus have a geographic premium, PDP's oil assets are in Argentina. There is therefore political risk in left wing governemtns nationalizing industries. So far that threat is greatest in Venuzuela. I genuinely don't this is a problem yet...but the risk is there and is something to be aware of.
Long time readers may remember quite a while ago when I did some soul searching over the benifits of "buy and hold" versus swing and bounce trading. CLL is the longest lasting holding in my portfolio.
It has meant a total ignoring of the momentum indicators, and sweating out some agonaizing (percentage wise) retracements. but there is no doubt that if you find the right vehicle then the strategy, in real life, is the way to make meaningful gains.
I had concocted a "theoretical" perfect set of entrance criteria...oversold, positive diverences, basing patterns, all present on daily and weekly time tables. I tracked this stock for months before all the stars were aligned.
As well the vehicle must be properly recognized by you as being fundamenatlly undervalued...i.e. the market is wrong about this stock.
A well another criteria is that whatever sector this stock is in, should be in a bull market, or in your mind, about to embark on a bull market.
When you enter a stock it will very well be a speculative stock at first with some underlying value and potential to realize it. Hopefully the underlying values is more than hope for good drill results but in reserves. At some point the stock must transform itself from a speucaltive vehicle to an investment vehicle through a material announcement. It can be drill results, or as in this case a reserve report.
The reason to be anal about entry point is so that hopefully just raw speculation will have pushed the price up enough so that if the news is bad you can still get out with your capital intact.
Analyzing the news is not a technical event...but more a fundamental one, so a little research will probably be required to make sure you understand whether the news is good or not. If the news is good, then you have a candidate for a longer term hold.
As for CLL, the price action has followed a classic stair-step fashion with sudden surges followed by periods of sideways consolidation. It appears to be in such a period right now.
This is not a recommendation per say as much as a presentation of a stock I own. A few weeks back someone had asked for an update on the charts and company...so here it is.
I will say however, that if you are a believer in the long term oil bull, then I think the long reserve life of Canadian oil sands is a good sector to investigate.