Energy demand
keeps rising – and rising particularly fast in China and the rest of the
developing world. And it’s increasingly difficult to find and extract more oil,
gas, coal, uranium, etc.
The lousy infrastructure is creating huge bottlenecks and helping push energy
prices higher.
Short-term fluctuations in the prices of energy stocks are quite normal,
depending on the weather and trading strategies of the moment. But it’s crystal
clear that the trend is up, and then up some more.
Bad news for consumers but great news for investors like us!!!
We’ve been making a bundle on this locked-in trend at ChangeWave Investing:
enjoying 20% aftertax income from our energy trusts; 84% gains in Meridian
Resources; 94% gains in NS Group; 69% gains in Chesapeake Energy; and 158% gains
in Matrix Services, among others.
And that’s just the first course in the feast of profits yet to come.
Essentially, there are huge reserves of oil in Canada – Saudi Arabia-type huge –
locked up in heavy sands. Extracting oil from oil sands is not a drilling
business, it’s a mining business, and one which was not – until fairly recently
–terribly profitable.
But two things have changed. The technology has gotten much better. Oil prices
have moved higher. And today, anything north of 30 bucks a barrel makes oil
sands the real deal.
Oil sands have become THE long-term oil play in the world. And over the next few
years, this extraction technology will become the major source of new oil for
the United States.
Think I’m kidding?
In 2005 – for the first time ever – Canada delivered more oil from “oil sands”
than from conventional wells! And production is expected to more than double
within five years.
Every time you use this oil to heat your home, or the gas derived from it to
drive your car, you’ll being thumbing your nose at OPEC.
And that, my friend, has me whistling “O Canada.”
The stock I want you to own is Connacher Oil and Gas (TSE: CLL). It is an
easy DOUBLE to start – and a possible 5-BAGGER over the next 2-3 years.
And while we’ve already made a lot of money in “oil sands,” this company is the
best value we’ve uncovered so far.
That’s because it controls 311 million barrels of recoverable reserves, but when
compared to the stock prices of other firms, it’s severely undervalued. A bona
fide BARGAIN! In fact, by our calculations, the stock is worth double its
current value right now.
You see, most companies take many years to get all the elements of large-scale
mining in place. But Connacher should be extracting 10,000 BOE/day (barrels of
oil equivalent) by fourth-quarter 2006.
Why the difference?
Connacher uses steam-assisted gravity drainage (SAGD) technology to extract
bitumen from the tar sands. The technology doesn’t work everywhere, but where it
does, it’s CHEAPER and QUICKER to get the oil out.
With oil around $60, this company could easily see cash flow over $1 (Canadian)
per share by this time next year. And that leads to money-doubling profits — at
least — for you and me.
Over time, as increasing production grabs more Wall Street eyeballs, this could
be a $20 stock.
A while back, I told my readers to buy Suncor, a big-name play on Canadian “oil
sands”. We later sold it for 99% gains. Now today, I want you to own another oil
sands stock – one with much, much larger profit potential! Buy Connacher Oil
and Gas under $5.00.
