Retired Life
Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.
(Music plays)
Announcer: “Welcome
to the Big Picture Speculator Podcast featuring Jim Letourneau, the
Big Picture speculatorrr…” (music continues)
Jim Letourneau: “Today
is Friday, January 25th 2008 and we are interviewing
Duncan Hamilton from Greentree Gas and Oil. I’m an
Investor Relations Consultant to Greentree Gas and Oil and I
think it’s pretty interesting company. So welcome
Duncan.”
Duncan Hamilton: “Oh,
hi Jim. How are you today?”
Jim Letourneau: “Good.
Good. Can you may be just give us a bit of a background on
yourself and how you got involved with Greentree?”
Duncan Hamilton:
“Certainly Jim. I’m a professional geologist and, I
started in the business back in the early 80s. I was sort of
destined I thought to go into mining, but literally at the last minute
I opted to go to the oil industry and started off with Petro-Canada,
when, you know, business was flying in the early 80s, we had big
budgets and it’s a good time to get into business and the place
to be - you know terrific training and the opportunity to
drill lots of wells. So, you know it was a good time to be in the
industry for
me. After Petro-Canada I did a short stint with Shell Canada,
worked the east coast off shore which was a bit of a change from
working Western Canada. Subsequent to that, I had an opportunity to
join an eastern-based company which was actually the exploration arm of
what is now Enbridge. So that was right around 1990. And we were quite
active in the northeastern U.S. and Ontario and had
lots of success. It kind of take us up to the mid 90s and at which
point, it was actually called Consumer’s Gas, but now
Enbridge, decided to sell off all of our assets and give way to other
exploration business. And all of our stuff was purchased by what is
now Talisman Energy. So that sort of puts me up into both 1996 and
that’s when I started with Greentree right from the
ground floor and ah, this will our 13th year of
operations.”
Jim Letourneau: “Okay.”
Duncan Hamilton: “So…”
Jim Letourneau: “So
you’re quite familiar
with Ontario and all of Greentree’s projects and using them
from start to where we are today. What kind of production rates
do you have right now and what percentage is natural gas versus oil?”
Duncan Hamilton: “Ah,
Jim as we speak, um, our production is around 110 BOE’s a day.
And about 80% is natural gas. As it turns out natural gas production
is hugely stable so it’s a typical long life reserves that are
at that spot where there’s very limited decline and in fact, we
could actually sometimes increase production. Our oil production on
the other hand, fluctuates a lot because some of it is
water-flood production and another big portion of it is a new field
that we’re bringing on to flood. So at this point, we’re
about 80% natural gas, but we’re working very hard to bring
that up to more towards a 50-50 mark.”
Jim Letourneau: “I guess very few companies that were natural
gas weighted have done very well in the last year or two. It’s
been tough for all of them. What’re
you guys looking to do to increase oil production and maybe if you
can point to may be ah, what you think your production at the end of
2008?”
Duncan Hamilton: “Our
target for ah, in 08 is in the 200 to 250 barrels per day range. Our
target was higher that that probably last year, but with the
markets, the way they are and the prices being kind of sort of
depressing, and the natural gas market, we’ve had to slow down
substantially. But we still have pretty, you know, we still have a
fairly aggressive ah, target for this year. Most of our
production is going to be added on the oil side. We still have some
natural gas operations that are moving ahead, but most of our efforts
are towards oil, and the oil work we’re doing is all shallow
production. And when I say shallow, it’s literally at about 125 meters
below the surface or 400 feet and it’s very
low risk stuff and at these prices pretty decent upside.”
Jim Letourneau: “Do
you want to talk about some of those projects?”
Duncan Hamilton: “Yes certainly. We have other oil projects but
right now we are really focusing on the shallow stuff. It’s
pretty low cost in terms of, you know, capital required, because
of the shallow depth. We’re looking at about $70,000 per well. And given the low risk part of it as well , it’s
a good spot to be, you know, with the market the way it is. And with
the shallow oil we’re working on a large
regional trend, where there have been a number of discoveries and
they’re all related to one big large extensive fault complex. There’s one main pool that’s made of about
just under 11 million barrels to date. We are developing a new pool,
south of there, right on the trend. Partially with Wavefront
Energy and Environmental Services, twe did have to deal with
them. That goes back over a year ago, where we would work together
developing the northern section of the pool with their technology and
that’s ongoing as we speak. In addition to that we own
an older pool, which has been on production for close to 50
years, We’ve reevaluated that pool and we were quite confident
that a lot of the pool wasn’t developed properly. So we’re
looking at doing some infill drilling within this older section of
the pool because according to our calculations, we believe there’s
a million a million and a-half barrels of oil left to be recovered in
the area. It is low risk and we have all the infrastructure set up.
Duncan Hamilton:
“Actually, at this stage of the game, given the way the market
is, we’re quite fortunate to have a portfolio of these low risk
projects, where we can, the best we can do is to fund our
operations at a cash flow because as it is, the market’s a
little difficult right now, to raise capital. So we’re doing,
you know, whatever we can with our existing cash flow.”
Jim Letourneau: “Okay.
Now, what’s the current market capital of Greentree and do
you think the shares are fairly valued, and if not, what could you
point to investors as to what the upside is?”
Duncan Hamilton: “Ah,
Jim, with the current, well looking at our prices today and of
course, most stocks are down significantly and I don’t have to
give in to that one, but um, the trading price today are only 0.8¢.
We’ve got 45 million shares outstanding so that puts our
market cap under 4 million. Um, based on our reserves report from
last year, which is going to be upgraded significantly for this year,
I believe, you know, based on our net asset value that are stock at 8 cents is significantly undervalued, I think we should
be in the mid teens at least.”
Jim Letourneau: “Okay.”
Duncan Hamilton: “And with the uptick and what I project for increased reserves, I
think that we should be worth more up into the 20s if not better.”
Jim Letourneau: “Okay.
Well that’s a very significant
upside from the current levels. I was going to maybe just ask
you what’s your longer term outlook for natural gas prices. I've started to read that some bigger investors are kind
of taking, making big investments and say, “look we can
wait a couple of years for things to turn around, but we think it’s
a good time to get into the market?” What do you see in the
natural gas market?”
Duncan Hamilton: “Well,
I try to stay as attuned as I can to the market conditions and, of
course, prices have been depressed for a bit of, you know, for
a certain time frame here now. My projections, for next year are
at least what we’re prepared for is possibly another year of
gas in the $7 to $8 range. I don’t think it’s obviously
the longer term. I think, you know, the opportunity is terrific. But
we’re kind of preparing ourselves for another year of, you
know, prices in the $7 to $8 range. I should point
out if you know, right now that I’m talking about a"made in Ontario
price" because we get about $1.25 per mcf premium over Alberta prices.”
Jim Letourneau: “Right.
We didn’t talk about that. And what are your royalties in
Ontario?”
Duncan Hamilton: “Yeah,
and that’s the other thing our royalties are a maximum of
12.5%.”
Jim Letourneau: “Wow.”
Duncan Hamilton: “So
we have that on our favor as well and you know obviously, gas
prices get up to the $10 or $12 per Mcf range that $1.20 isn’t
quite as important, but as, you know, at today's level it is.”
Jim Letourneau: “I
think it helps.”
Duncan Hamilton: “It’s
a nice cushion to have. So you know, I haven’t
lost optimism on the natural gas market, but on the other hand, we
are going to focus on oil to get us back into more of a 50-50 mix.”
Jim Letourneau: “Okay.
Well we’ve been speaking with ah, Duncan Hamilton from
Greentree Gas and Oil. Duncan, is there anything else you’d
like to talk about today?”
Duncan Hamilton: “Well
I guess there are a couple other little things. We’re
doing some kind of interesting projects where we can stay back and
try to increase production and reserves without additional capital
funding and one example is we’re in the midst
of doing a substantial deal with U.S. Steel Corporation and essentially they have 7000 acre industrial property with a steel
mill and uses 30 million cubic feet per day. We’re quite
confident that there's an indigenous gas supply sitting under the
steel mill. So we’re moving forward with them to develop
natural gas right under their plant and of course, send it into the
plant. So that’s kind of an interesting project and, it’s
got huge scale ability. And we’re also working with
another group, a large real estate corporation that again is
looking to develop natural gas under their extensive land holdings.
And that’s kind of unique, you know, it’s hard to deal
with position in the market place right here in southern Ontario, but
um, yes, we’ve, you know, we’ve got a couple of
interesting things on the go.”
Jim Letourneau: “So,
no shortage of projects at the moment anyway?”
Duncan Hamilton: “No
shortage of projects, but like a lot of industries, I could use a
little help. (laughs)
Jim Letourneau:
(Laughs). “I guess everybody’s, yeah everybody runs to
that sometimes. There really is a shortage of trained technical
people out there in mining and in oil and gas. And it’s not
like people are willing to ah, you know, there’s just a lot of
competition for you know experienced labor right now. So, that’s
a common theme in the lot of the companies we talked to. Duncan,
thank you very much for your time today. Last chance, anything
else you’d like to talk about?”
Duncan Hamilton: “No Jim, I think that’s probably more than enough. I don’t
want to put anybody to sleep.”
Jim Letourneau:
(Laughs). “I don’t think that’s going to happen.
Duncan Hamilton: “Thank
you.”
Jim Letourneau: “I
don’t think that’s going to happen. There are some
nuggets in there. Some really good stuff. So, thank you again for
your time today, Duncan. Duncan’s with Greentree Gas and Oil,
the symbol is GGO.V on the Venture Exchange. Thank you very much
Duncan.”
Duncan Hamilton: “Thank
you Jim, my pleasure.”
(Music plays)
Jim Letourneau: “That
concludes this episode of the Big Picture Speculator Podcast, I’m
an Investor Relations Consultant to Greentree Gas and Oil. Duncan
Hamilton was kind enough to do the interview for us today. The
symbol is GGO.V. If you want a list of more podcasts, please check
out www.bigpicturespeculator.com.
I am in Cabo San Lucas this week but through the magic of "the internet" I can still be productive. I suspect this strange desire to be productive will fade over the next few days as the sun, sand and serenity slowly seep in. Mexico is synonymous with silver and my first trip to Mexico was courtesy of Endeavour Silver (EDR.TO) to see their Guanacevi mine operations. They continue to expand production and make acquisitions.
Brad Cooke of Endeavour Silver (EDR.TO) talks about:
Listen to an interview with Brad Cooke.
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Today we were fortunate enough to chat with Louis Paquette of Emerging Growth Stocks. We discussed the current state of the markets and Louis hints at about a solid gold investment ETF.
The January 20-21, 2008 Cambridge House Vancouver Resource Investment Conference is the first resource show of the new year. We interviewed Cambridge House President, Howard Fitch, to tell us more about the show.
Click here to listen to the interview with Howard Fitch
My Odeo Channel (odeo/d4f3323fdc9f2cfa)
I spoke with Lori Walton, President, CEO, and Director of Firestone Ventures (FV.V) on January 10, 2008. Lori discusses the Sonora gold project in the Yukon and the Torlon Hill zinc project in Guatemala.
Click here to listen to the interview.
I spoke
with the David Russell, President, CEO and Director of Apollo Gold in late December.
I spoke
with Darren Lamothe of Diversified Industries (DVS.V) yesterday. Darren led CFR Chemicals Inc. from sales of $206,000 in 1996 to just under $12,000,000 in gross revenues for the twelve months ending October 31, 2007. Things are looking great for 2008 as Diversified recently announced:
With our first quarter recently completed we are pleased to announce our revenues will be approximately $5 million, up 70% from the same period last year.
I own shares of DVS.V. I am an investor relations consultant to DVS.V
I spoke with Dino Cremonese of Teuton Resources Inc. (TEU.V) last week. Today they announced some amazing drilling results from their Treaty Creek property:
Download big_picture_speculator_podcast_tueton_resources_inc. (TUO.V).mp3