Stock Trade Commentary
As usual, after taking a position in a company, the price falls. Sort of getting used to that. PIE is a special investment; it is not my typical company and is much riskier than my usual targets. PIE has an insignificant production of 10 boe/d but it has more than 100,000 net acres in western Montana near the Alberta border that are prospective for multi-formation oil and gas. This play is still emerging and is known as the Alberta Basin Bakken.
Other majors such as Rosetta Resources (NASDAQ:ROSE) and NewField Exploration (NYSE:NFX) have secured significant leases around PIE. Based on the last land sales alone last July at $1,450/acre the share price is worth north of 1$. As the play is proven by the majors, PIE’s value should increase until a joint venture partner shows up and funds a major drilling program. No production rates have been reported from the majors as they are busy drilling and hoarding land.
Rosetta believes there is between 13-15 MMboe per square mile of resource in place. Clearly, there is a lot of upside that comes with this level of risk.
- Failure to prove any hydrocarbons of commercial value on PIE’s land.
- JV partner never shows up.
Let’s call things by their name, this is almost a lottery ticket here, it’s a play on land. Not my usual type of investing but I figured I would try. This would be my second lottery ticket following Atikwa Resources which I am hoping to sell soon from my TFSA. I will be watching this one closely for a number of weeks.
- Stock Trades: Sold Primary Petroleum (TSXV:PIE)
- Stock Trades: Bought Reliable Energy, Primary Petroleum and Bowood Energy
- Stock Trades: Bought More SkyWest Energy, Sold Primary Petroleum
- Stock Trades: Sold Palliser Oil & Gas (TSXV:PXL), Bought Second Wave Petroleum (TSXV:SCS)
- Stock Trades: Bought More Second Wave Petroleum (TSXV:SCS)