Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Run Like a Deer

Deer Creek Energy accepted an all cash takeover bid from Total Energy for C$25 a share yesterday. That created a nice 39% pop for shareholders. Deer Creek is an oil sands development company with landholdings north of Fort McMurray.

Oil sands projects offer great leverage to rising oil prices. Reserve numbers are relatively straightforward to calculate and there is little exploration risk. There are considerable technical risks as costs for equipment and labor are going through the roof.

Not to be outdone, Connacher Oil and Gas announced a reserve estimate for their Great Divide oil sands property. Shares closed up 57% on the day. It may take some time for that move to be digested but speculators will be looking for oil sands exposure based this week's moves.

Not Advice
I currently own Connacher Oil and Gas

Try the Big Picture Speculator free for 30 days.