Shining a Light on an Out-of-Favor Oil Stock

Source: Clive Maund for Streetwise Reports 12/07/2017 Technical analyst Clive Maund charts an oil and gas explorer that he believes is under the radar of most investors. Torchlight Energy Resources Inc. (TRCH:NASDAQ) has fallen out of favor with investors and is largely off the radar, which is understandable considering that it has done nothing for its investors for two years. However, the company still has potential and it is thought that there is an increasing chance that there will be some positive news soon, with the current lack of interest increasing upside potential. Its 8-year chart looks much the same as when we last looked at it back in June, so the preparation of this chart was largely a copy and paste job. There is one very noteworthy difference, however, which is that the stock is considerably cheaper. When we looked at it back in the summer it was priced at $1.66, and at that time it was written that it was worth accumulating on any near-term weakness, and that we have certainly seen as it is now priced at $1.12. Observe on the chart how it continues to look like it is basing, within a large bucket like pattern, and the positive volume pattern and volume indicators bode well for an eventual breakout from this pattern, which after all this time could now be drawing closer. Turning now to the 6-month chart we see that the intermediate downtrend from early November has brought it down to an attractive price, … Continue reading

Another Uranium Company to Slash Production in 2018

Source: Streetwise Reports 12/05/2017 A BMO Capital Markets report describes the implications of this cutback in production for the uranium market. In a Dec. 4 research note, BMO analysts Alexander Pearce and Edward Sterck reported that beginning in January 2018, Kazatomprom plans to reduce uranium production by 20% over the next three years to, as the Kazakh state uranium company phrased it, “better align its output with demand.” Between 2018 and 2020, it will suspend a total of about 28.6 million pounds (28.6 Mlb) of uranium production, with roughly 10.4 Mlb of it being held back in 2018, according to Kazatomprom’s estimates. For the three-year period, with its uranium production deferral, Kazatomprom’s uranium production, per BMO calculations, will be “between 4.5 and 12 Mlb lower than our current estimate (2018 to 2020) or between 3 and 7% of total global mine supply,” the analysts indicated. Considering the impact of Kazatomprom’s cutback on total global uranium supply in 2018 alone, BMO noted that supply had already taken a cut with Cameco Corp.’s (CCO:TSX; CCJ:NYSE) announcement to suspend production at McArthur River for 10 months in 2018. BMO estimated the resulting supply decrease due to Cameco to be 20 Mlb “including new reactor buffer inventory build,” or 13 Mlb excluding that build, they added. Kazatomprom’s plan to withhold about 4.5 Mlb of uranium supply “represents a deepening of the deficit in 2018 to ~25 Mlb on our forecast including buffer inventory build or ~17 Mlb excluding buffer inventory build,” the analysts wrote. … Continue reading

Explorer to Drill Flagship Copper Project with 'Blockbuster Discovery Hole'

Source: Peter Epstein for Streetwise Reports 12/01/2017 Peter Epstein, founder of Epstein Research, evaluates Centenera Mining Corp.’s Esperanza copper-gold porphyry project. Centenera Mining Corp. (CT:TSX.V; CTMIF:OTCQX) is a 100% Argentina-focused junior mining company with attractive assets spanning copper (Cu), gold (Au) & lithium (Li), and a cheap valuation. The most important asset to watch, at least in the short-term, is the Esperanza copper-gold porphyry project (formerly known as the Huachi project, an outcropping Cu-Au porphyry system with a blockbuster discovery hole that had a giant intersection of 353m grading 0.49% Cu Eq, (including 243m at 0.57% Cu Eq and 88m at 0.69% Cu Eq). The project is located in San Juan province in northwestern Argentina, 135 km north of the city of San Juan. Esperanza is within 35 km of power lines and has year-round road access. It is located at elevations between 2,800m and 3,250m, low relative to other projects in the Andes. Exploration can be conducted year-round. Centenera has a great management, board & technical team for a company its size {66.6 million shares outstanding x C$0.20 = C$13.3 million market cap}. Drill permits are in hand, and drilling will start the first week of the new year. The Esperanza drill program will investigate the potential for a bulk-tonnage copper-gold porphyry-style deposit. The company plans to initially drill four drill holes for ~2,000m, stepouts of at least 150m from known holes. Planned holes will aim to reach deeper than historical holes, to 500–600m. Keith Henderson, president & CEO … Continue reading

Development Agreement for Permian Basin Acreage Would Eliminate Capex Budget

Source: Streetwise Reports 11/28/2017 The letter of intent signed to develop this oil & gas company’s large acreage in the red-hot Permian Basin would not only eliminate the company’s capex budget, it could give the company a long-term cash flow stream. Amazing Energy Oil & Gas Co. (AMAZ:OTCQX) holds rights to 70,000 contiguous acres in the prolific Permian Basin. Today it announced that it has entered into an agreement with JH Fossil Energy, LLC to “develop Amazing’s current holdings in Pecos County Texas, as well as to be acquired assets located elsewhere in Texas.” The agreements will allow JH Energy an opportunity “to acquire a 50% interest in the rights to approximately 70,000 continuous acres in Pecos County, TX exploiting the Yates, Seven Rivers, Grayburg, Queen, San Andres, Wolfcamp, Woodford, Devonian & Ellenburger pay zones and 6,600 acres located elsewhere in Texas that Amazing is currently in the process of acquiring.” The LOI calls for the parties “to negotiate and execute definitive agreements with provisions totaling $39.175 million in consideration flowing to Amazing, including a $17.5 million capital carry for Amazing for its Pecos County acreage; $5 million for seismic, science and deep formation testing; and a $3 million capital carry for Amazing for an additional project.” The agreement will also include a commitment for JH Energy to use Amazing’s drill rigs and equipment for the drilling of the Queen pay zone, and JH Energy will prepay Amazing $5 million “to secure use of the rigs. After such prepayment is … Continue reading

Oil & Gas Company Has 'High-Impact Exploration Potential'

Source: Streetwise Reports 11/28/2017 Bill Newman, an analyst with Mackie Research Capital Corp., shared this energy firm’s Q3/17 news. In a Nov. 16, 2017, research note, analyst Bill Newman, with Mackie Research Capital Corp., provided an update on Pan Orient Energy Corp.’s (POE:TSX.V) wells in Indonesia and Thailand. In Indonesia, regarding the East Jabung product sharing contract (PSC), Pan Orient Energy, the 49% working interest owner, and its partner agreed to drill the ANGGUN-1X well, “which holds substantial resource upside,” Newman indicated. That well is “targeting an independent structural closure from that tested at AYU-1X at the Batu Raja formation level” and “the same well-developed, porous Gumai sandstones reservoir encountered in the AYU-1X well.” As for the ELOK-1X exploration well, Newman explained that it qualified as “the second commitment well, and the government of Indonesia has approved a 14-month extension (to Jan. 20, 2019) of the first exploration phase of the East Jabung PSC.” In Thailand, at the L53/48 concession, in which Pan Orient Energy owns a 50.01% working interest, Q3/17 production averaged 262 barrels of oil equivalent per day net to it. This was “in line with our forecast of 225 barrels per day,” Newman noted. Later this month, the energy company plans to spud the L53AC-C1 exploration well and finish a four-well workover project before year-end. The research report also covered Pan Orient Energy’s financial status. As of Q3/17E, the company had “a strong balance sheet and no big work commitments,” Newman described. Working capital was $40.4 million … Continue reading

Battery Production More than a Tesla Nightmare

Source: Ron Struthers for Streetwise Reports 11/28/2017 Battery metals are in short supply as companies race to build EVs and energy storage system, says Ron Struthers of Struthers Resource Stock Report. He surveys the field and profiles one company he believes could be a new LIB anode supplier. Increasing lithium battery production a challenge Can Tesla overcome its battery bottle neck? The environmental Catch 22 Is Asia (China) the answer ? Elcora looks to be new LIB anode supplier The big news out of Tesla (NY:TSLA) in early October was when it announced a large shortfall on its plan to build 1,500 Model 3s (first mass market car) in the third quarter. The actual number came in at 260, or 83% less than promised. This announcement is probably a sign of challenges that Tesla and perhaps all EV makers may face as they try to build more affordable electric cars. The feeble numbers can be traced back to the Nevada Gigafactory where Tesla builds batteries for the cars. An outside supplier responsible for part of the process of assembling batteries into modules, into packs, “dropped the ball,” Tesla CEO Elon Musk said, and Tesla was forced to take the work in-house. “We had to rewrite all of the software from scratch and redo many of the mechanical and electrical elements,” he says. “This is what I’ve spent many a late night at the gigafactory working on.” “Dropped the ball” is a pretty vague explanation of the problem, but safe to … Continue reading

Cheap Permian Driller Has Big Upside

Source: Clive Maund for Streetwise Reports 11/26/2017 Technical analyst Clive Maund of discusses a Permian driller that he believes is an “attractive speculative play.” The purpose of this update is to remind readers that Amazing Energy Oil & Gas Co. (AMAZ:OTCQX) remains very cheap here with the potential to make big percentage gains. When you read up on the fundamentals of the company and then look at the stock price, you wind up thinking that most investors can’t see further than the end of their nose, for whilst the fundamental outlook for this company has been steadily improving for a long time now, the stock price has remained depressed. The fundamental story may be read here, but the key points are as follows—the company has acquired a large block of land in the Permian Basin in Texas at an extremely cheap price, which is adjacent to the prolific Yates Oilfield, and therefore very likely to contain a lot of oil and / or gas, and is embarking on an aggressive drilling program at a time when the oil price is advancing after being depressed for some years, and more than 90% of its stock appears to be tightly held by insiders, so the float is very low. It is therefore logical to suppose that any speculation regarding positive drilling results could cause a significant run up in the stock price. We will quickly look at three different charts for different time frames. The first 14-year chart shows us the … Continue reading

Cobalt Pure-Play Hitched to Electric Vehicle Boom

Source: Streetwise Reports 11/21/2017 Forecasts of an electric vehicle boom are behind skyrocketing demand for cobalt, a major component in batteries. In this interview with The Energy Report, Anthony Milewski, CEO of Cobalt 27 Capital Corp., discusses the company’s unique position as a two-pronged pure-play on cobalt. The Energy Report: Would you bring us up to date on what’s happening in the cobalt market? Anthony Milewski: A few weeks ago was LME Week in London, which is the annual gathering of producers and consumers for not just cobalt but for a variety of base metals. It’s an international gathering with people from all over the world—China, United States, Europe, Africa. And I would say that it’s really the mating season for cobalt. What that means is cobalt contracts are typically 12-months long, although there’s a lot of variation. Many of the next 12 months of contracts are set during this week or discussed, if not signed. It’s a major week for the consumers and producers to get together and have a meeting of the minds around what the next 12 months will look like for cobalt. TER: What was the outcome of these meetings? AM: The first takeaway is that there’s tremendous new demand coming into the market because of the electric vehicle. All of the talk and all the meetings I was in was around the impact of electric vehicle sales and penetration on the cobalt market. A second conversation that’s going on is about future supply, security of … Continue reading

Pure-Play Vanadium Producer's Q3 Revenues Increase 153% YOY

Source: Streetwise Reports 11/21/2017 With the price of vanadium on the rise, one pure-play producer is reaping the benefits. Vanadium, a metal that maintains a low profile, has been on a tear recently. The metal is used to harden steel: a mere two pounds of vanadium added to one ton of steel doubles its strength. The price of vanadium has surged since the summer, led by the expectation of China increasing the required amount of vanadium in steel used for construction, according to Bloomberg. China is the largest supplier of vanadium, responsible for over 50% of the world’s annual production. Although over 90% of vanadium is used in steel, rechargeable vanadium redox flow batteries are gaining in popularity for large-scale energy storage, and with them the demand for vanadium grows. Bloomberg reported that while the price of vanadium is soaring, “there’s currently no easy way to invest directly in vanadium. The metal isn’t traded on any exchanges and for a company like Glencore Plc, which describes itself as one of the largest producers of primary vanadium, the metal represents a small percentage of the group’s total production.” Largo Resources Ltd. (LGO:TSX) offers a pure play on vanadium. The company hosts the Maracás Menchen Mine in Brazil, which, according to the company, boasts the world’s highest-grade vanadium deposit with a P&P reserve grade of 1.17% vanadium pentoxide (V2O5), with low costs of production. The company released its Q3 earnings on Nov. 6, reporting revenue growth of 153% year over year, and … Continue reading

Low-Cost Oil & Gas Player in High-Rent Permian Basin

Source: Streetwise Reports 11/21/2017 An oil E&P company has acquired rights at low cost in the prolific Permian Basin that it is now exploring and producing. The price of oil has been rising in recent weeks, with West Texas Intermediate Crude now fetching $57 per barrel. The Permian Basin, a prolific oil and gas producing area spanning West Texas and southeastern New Mexico that some people have called “America’s Saudi Arabia,” has attracted the attention of majors such as Exxon (XOM:NYSE) and Chevron (CVX:NYSE). Earlier this year, Exxon acquired acquired about 275,000 acres of leasehold in the Permian Basin from companies owned by the Bass family, with an estimated 3.4 billion barrels of oil equivalent. Chevron has been active in the Permian Basin since the 1920s and holds about 2 million net acres of resources. The company has produced over 5 billion barrels from the area. Another company active in the Permian Basin is Amazing Energy Oil & Gas Co. (AMAZ:OTCQX). Amazing Energy has rights in a contiguous 70,000-acre block in the Permian that is adjacent to the prolific Yates Oilfield, which has produced over 1.6 billion barrels of oil. The company’s neighbors include Kinder Morgan (KMI:NYSE), Oxy Petroleum (OXY:NYSE), Pioneer Natural Resources (PXD:NYSE), ConocoPhillips (COP:NYSE), Jagged Peak Energy (JAG:NYSE), Diamondback Energy (FANG:NASDAQ) and Apache (APA:NYSE). “Amazing Energy is in the unique position in this 70,000-acre contiguous block with special long term right that we believe will keep up secure for many years in the future,” Amazing’s CEO Willard G. … Continue reading