Strong Buy Recommendation Oil Sands Quest (AMEX: BQI) $4.35 12-Month target
$12.00
This stock is an oil sands play, that’s poised to more than double within 12
months and more than triple within 24 months.
Oilsands Quest has projects in the oil and gas industry in Western Canada with
an emphasis on oil sands and oil shale exploration.
Oilsands Quest currently owns the largest single continuous piece of oil
sands (aka. “tar sands”) land holdings anywhere in the world. While they
also own oil sands exploration permits in eastern Alberta, Canada, Oilsands
Quest is the originator of Saskatchewan’s emerging oil sands industry.
Exploration for commercially viable oil sands deposits has traditionally focused
on Alberta Canada, the province west of Saskatchawan. But it’s in the untapped
province of Saskatchewan where Oilsands Quest has had highly successful oil
sands exploration results (specifically the northwest region).
By applying its technical expertise to develop multiple global-scale
discoveries, they are aggressively exploring their 700,000+ acres of contiguous
oil sands. The company’s Saskatchewan oil sands permits (100% owned) now total
over 500,000 acres.
Based on strong exploration indications, after drilling only 5% of their massive
land holdings, Oilsands Quest believes they’re are already currently sitting at
more than 10 billion barrels. They estimate that’ll likely increase
significantly over the next 12 months.
Their main project right now is their Axe Lake Discovery in northwest
Saskatchewan, a world-class bitumen resource. Just in Axe Lake alone, they
estimate sitting on 2.5 billion barrels, 1.5 of which is already classified as
discovered after only 2 years of drillings.
Independent labs will examine all drilling data and producing a report sometime
this fall. The results are very likely to support what management is claiming (a
barrel count of an estimated 1.5 bil barrels.)
Oilsands Quest has been accelerating their activities at its Axe Lake Discovery
in preparation for their field pilot program in the first half of 2008. Oilsands’
planned field test of the reservoir is intended to evaluate reservoir response
to varying pressures and temperatures.
They restructured the company with awesome new management team in August 2006.
Before joining Oilsands Quest, the President & CEO, Christopher H. Hopkins lead
the exploration team Synenco Energy that found 2.2 billion barrels in Alberta.
He and his team are proven oil sands finders. He brought that same management to
Oilsands Quest to work on their discovery efforts.
As they continue drilling programs through the winter in Saskatchewan as well as
Alberta where they estimate to have 4-5 billion barrels, I think probable
discoveries will likely move the stock closer to $8.00.
ABOUT OIL SANDS INDUSTRY
Oils sands (aka, tar sands) are a mixture of sand or clay, water, and
extremely heavy crude oil.
Conventional crude oil is easily extracted from the ground but tar sand deposits
must be strip-mined or made to flow into producing wells using steam and/or
solvents. These processes use a great deal of water and require large amounts of
energy, so there’s a higher cost in producing oil from Tar sands.
But costs of producing oil from tar sands are going down due to technology, and
the price of oil is high, making tar sands a highly profitable venture.
The world’s largest deposits occur in Canada, a politically friendly country.
This volume places Canadian proven oil reserves second in the world behind those
of Saudi Arabia. Alberta, Canada is capable of being a major player on the world
oil market for the rest of this century. (Oilsands Quest’s land holdings are
strategically located in Alberta and just over the Alberta/Saskatchewan
boarder.)
The Alberta Energy Utilities Board (AEUB) estimates there are 1.6 trillion
barrels of bitumen resource in place in Alberta.
Realizing the Potential of Canada’s Oil Sands Resources
North America’s energy needs are increasingly being met by Canada’s oil sands.
Canada is now the largest single supplier of oil and refined products to the
United States.
By 2020, the oil sands are expected to provide 80% of Canada’s oil production.
Oil Sands Quest At A Glance
Current Price: $4.90
52Wk High: 5.51s
52Wk Low: 2.37
Avg Vol: 2.54M
Earnings: 2007 (-0.50) est. 2007 (-0.06)
Share Statistics
Shares Outstanding6:186.47M
Float:181.05M
% Held by Insiders4:4.18%
% Held by Institutions4:22.00%
Market Cap (intraday)6:7917.44M
Balance Sheet
Total Cash (mrq):53.36M
Total Cash Per Share (mrq):0.286
Total Debt (mrq):0
Total Debt/Equity (mrq):N/A
Current Ratio (mrq):6.478
Book Value Per Share (mrq):2.355
Cash Flow Statement
Operating Cash Flow (ttm):-37.41M
Levered Free Cash Flow (ttm):-90.33M
