Archives Page

Canada's Gold Rush
Wednesday, March 15, 2006

Since the high oil prices have hit the world markets Canada has seen a frenzy develop in its Alberta and Saskatchewan provinces. For this post we will focus on the tar sands in Alberta and the suspected tar sands in Western Saskatchewan. Many people have decided to play the potential of this region through Suncor or Birch Mountain (a recommendation by Mr. Jim Cramer form CNBC'S Mad Money). These two companies focus on the Alberta region and in the case of Suncor already have producing assets. Tar sands can be gathered in different ways, but the two most common are open pit mining and a process in which natural gas is used to heat up the bitumen (the oil containing sands) until the oil melts and can then be pumped up to the surface. The cheapest method is open pit mining, but with high oil prices natural gas is a viable alternative because usually that process can be performed at the $25 per barrel range max. Another company which I am going to recommend right now is Canwest Petroleum (CWPC) which I do own shares in and have owned shares in for the last 5 months. It has been good to me and I have no intentions of selling. Canwest is positioned very well in this region possessing two very promising concessions. They own 100% of Eagle's Nest located in the Northeast area of Alberta (a recent concession the same size sold to ChevronTexaco for $35 Million) where drilling will commence once the company finishes its drilling on Firebag East. Firebag East is the first tar sands project in Saskatchewan and so far the drill results are very promising. Firebag East is located to the East of Suncor's huge Firebag field. I am recommending CWPC at its current price of $4.90 and a price target of $10 by the end of the year.


theinvestar.com, LLC - read disclaimer