Cdnx PCQ.V Thread

[cdnxtracker]

PETROLYMPIC LTD. @.35cts Utica play

Backed up the truck again this morning
and have been acquiring a larger position
in PCQ @.35-.36cts. If GMR.v starts to run here
this afternoon I think we see .40+cts close on
PCQ.v.
We are also awaiting news from PCQ which is
getting closer.

[Naamplao]

I thought a TA point of view might be useful here. I fail to see how the success of GRM.V affects the price of PCQ.V. There is no corporate relationship between the two companies though they appear to be drilling in the same area of Quebec Lowlands.

TA Analysis

Here is the SharpChart for the company

PCQ.V - SharpCharts from StockCharts.com

You can see that this stock has done nothing until the beginning of April. then it shot up to about $0.45...nice jump from about $0.07 a few days earlier. But why the jump? As far as I can see they just own property that has potential but they have not drilled a single well yet. The spike seems to be due to them riding on the coat tails of other companies in the area.

From the look in the chart....the pumpers have made money....now the stock interest is waning....look at the Accum/DIST...it is falling like a stone! The RIX has topped out...the RSI is falling

Here is the P&F chart



It is in freefall. Falling as fast as it rose. There might be a mild support at $30.00 You will see the in the 5 day chart to follow. But I see no evidence of a turnaround and rebound to $0.40 or so cents.

Here is the 5 day line chart from Yahoo.com



Look at the way the chart ended at the end of the day....no indication of an uptick here. In fact I can see a further decline in the conceivable future., potentially all the way to $0.18 which is the only real strong support I see in the P&F chart.

My prediction is a decline in share price...not a rebound

This stock may be a winner after its drilling program scheduled for the summer but that is a long time away and until this is completed if you buy this stock now...it is buying dreams IMHO.

[cdnxtracker]

Here is an interesting article now. Instiutional money starting to take
notice now. If QEC.t is worth $45.00, GMR.v $31.62. What does that
make PCQ.v worth? $15-$20?

Questerre, Gastem rated 'buy' in first Utica shale play ratings

Posted: May 06, 2008, 8:45 AM by David Pett
Energy

FraserMackenzie Ltd. analyst Patty Shao jumped into the Utica shale gas playlast week, initiating coverage on two of the play’s “first movers,” Gastem Inc. and Questerre Energy Corp.In doing so, Ms. Shao becomes the first analyst in Canada to formallyweigh in on the play, but based on the explosion in investor interestover the past month, she probably won’t be the last.

“Amongthe six juniors that are exposed to the Utica shale gas play in Québec,we believe Gastem and Questerre offer the best upside leverage throughtheir acreage holding in the ‘sweet spot’ of the Utica shales, she saidin a report to clients.

Of the two, Questerre has thelarger leverage to the play with an estimated 193,863 net prospectiveacres, including the royalty interest from its farm-in agreement with
TalismanEnergy Inc. Ms. Shao told clients she predicts a total unrisked netasset value for the company of $45 per diluted share.

ForGastem, she estimated an unrisked net asset value of $31.62 per dilutedshare based on an estimated 53,921 net prospective acres in Quebec andNew York State.

The analyst slapped “buy” ratings on bothcompanies but refrained from setting target prices given “the earlystage nature of the play and wide variances in potential outcomes.”

Thefour other junior explorers with Utica shale exposure that Ms. Shao didnot initiate coverage on, include Junex Inc., with 54,619 prospectivenet acres, Epsilon Energy Ltd., with 3,920 prospective net acres, AltaiResources Inc., with 46,019 prospective net acres and Petrolympic Ltd.,with 43,305 prospective net acres.

All six companies Ms.Shao mentioned in her report have seen their share prices more thanquaduple since Apr. 1. when Denver-based Forest Oil Corp.’s announcedfavourable drilling results in the Utica formation. Forest Oil comparedits results to the established Barnett Shale play in Texas, saying theeconomics of Utica could be more attractive because of its shallowerdepth and close proximity to gas markets.

David Pett

[Naamplao]

This article is not about Petrolympic at all??? Agreed that this company has an interest in the general area...but we are talking potential Apples/oranges here.

Also I thought it would be instructive to post comments to this Financial Post article that can be found at Questerre, Gastem rated 'buy' in first Utica shale play ratings - FP Trading Desk

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by Jonathan Blake
May 06 2008
12:42 PM


I find Ms. Shao's numbers difficult to understand as they significantly conflict with legal filings and company presentations. Furthermore, the "first mover" standpoint above is inaccurate as Junex and Altai have been in the play well before Gastem and Questerre. I am also unsure what she means by the sweet spot as many factors enter that calculation (geological, geophysical, facility, pipeline, topographical, etc). The gastem acreage is not necessarily the sweet spot and much of the Forest and Junex acreage is on top of pipelines; unlike much of the Gastem, Questerre, and Talisman acreage. Pipeline costs will be enormous in this undeveloped area, and it will greatly reduce ROI's.

This is a very complicated play for anyone that has not worked for at least 10 years in oil and gas development. I believe a great amount of experience is required from financial, geological, and petroleum engineering standpoints; all of which I was unable to determine about Ms. Shao from Fraser Mackenzie's website. I am very skeptical. It is important to note that the website says that she is an associate, rather than an analyst as stated in this Financial Post article (associate's are often recently out of university and treated as trainee's due to their low experience). Regardless, the fact many analysts are jumping into the play well after the discovery is indicative of their low experience in the play.

By interviewing company executives and by analyzing press releases, corporate presentations, annual reports, and inter-company contracts the NET acres in the St Lawrence Lowland shale area are:

Junex 724,600 net acres

Questerre 350,000 net acres

Altai 167,500 net acres

Gastem 153,200 net acres (only 17,043 in the heart of the Utica play , Mr Shao includes the royalty burdened New York farmin in Gastem's acreage which is clearly out of the heart of the play, and far from the discoveries)

These values assume that the companies exercise their "working interest back-ins". Thus Gastem and Forest would lose acreage due to back-ins from Junex, Talisman, Questerre, and Epsilon.

Note that the Junex acreage above does not include the 4 million acres it owns in the Gaspe area targeting Ladyfern plays, or the Trenton zones that were not farmed out to Forest in the Utica area.

Although most investors have been confused, the market is now starting to realize that Junex and Altai have the most stock price upside; with Junex clearly being the dominant land holder in both Utica shales and conventional zones.

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by East Coast
May 07 2008
10:55 AM


Mr. Blake

You seem knowledgeable and informed. Do you have a background in oil and gas?

Please continue to provide information on an educational basis.

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by Jonathan Blake
May 07 2008
12:25 PM


Thank you. I feel it is important to temper the often one sided views of the financial analysts and media. Many incentives governing Wallstreet and the media are not favorable to the small retail (or even large institutional) investor. Not only that, but many analysts are analyzing oil stocks despite the fact that they have never worked in the industry and do not have a technical background.

Yes, I have an O&G background of 15 years. I have successfully led geoscientists and engineers to both explore and develop large unconventional and conventional plays. I have an engineering degree and advanced finance degrees.

Please keep in mind that this play and the balance of power among players is still highly uncertain. The $31/share numbers thrown around in the article are almost worthless as they are unrisked (meaning they calculate the risk as 0% and a 100% success is assumed in the $31 and $45 per shr numbers). No experienced oil and gas professional or executive would run a business or make investments based soley on unrisked numbers. Unrisked numbers should largely be ignored. Whenever evaluating a reward, you must always pair it with risk.

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by Jonathan Blake
May 07 2008
12:31 PM


Also please note that the FP articles and Frazer Mackenzie analyst reports are very one-sided by focusing on Gastem and Questerre. Furthermore, many of the FP and FM articles can not be commented on as with this one. Given the flood of articles with a narrow focus, caution is warranted and one must question both incentives and intentions.

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by East Coast
May 07 2008
7:13 PM


Mr. Blake

Many thanks for your replies. Just as I thought, you are indeed 'seasoned'.

My interest is in unconventional gas resources. A few years back I studied new drilling methods for tight sands and shale gas. In either of these, it is important not to damage the formations by way of pressure or fluids. Reverse-circulation-center-discharge drilling seems to be the method that circumvents the problems caused by conventional drilling practices.

Having said that, in New Brunswick, Corridor Resources recently drilled through its producing sands and down into its Fredrick Brook shale gas package (using air) and is currently producing from an open hole. While it is still in the test stage, this shale gas package is 1160 metres thick and contains naturally fractured rock. Given all the 'excitement' in and around the Marcellus and Utica shale situations in other Appalachian areas, why has New Brunswick been overlooked? My pardons if it seems as if I'm in any way promoting here, as I'm not, but the shale rocks of this area are both naturally fractured and are very thick indeed, two of the most desired criteria, as you may very well know.

Allowing shale formations to be able to produce is still on a learning curve in many areas. Perhaps, we have here, many of the right conditions required not only how to learn, but to see those successes put into practice. Granted, this appears to speak well for New Brunswick, but it also speaks well for shale gas potential in general as shale gas appears to be a great source of future production.

I decided I would look at Ms. Shao's qualifications as an Analyst of oil and gas projects...they are here Fraser Mackenzie - Research Analysts - Patty Shao

Patty Shao
Research Associate
Energy - Oil & Gas and Renewable

Ms. Shao graduated with a Bachelor of Business Administration with High Distinction from the University of Toronto in June 2006. She took a specialist program in Management (Finance) and a minor in Economics. As part of her co-op experience, she worked for General Motors in corporate finance. She also held a position as a research analyst at Watson Wyatt, where she analyzed findings on executive compensation and corporate performances.

Ms. Shao is currently enrolled as a CFA Level III candidate.

Hmmmm...she may be a competent person in many areas but she certainly doesn't show an in-depth knowledge of the Oil and Gas industry...does she? And she is not an Analyst...she is a RESEARCH ASSOCIATE. I have an tendency to agree with Mr. Blake's comments on the article....caution is required on this stock.

[cdnxtracker]

I never said it was article specific to PCQ. It is an article on the Utica
gas find and the players in around that area. PCQ is just one of the many
land holders in Gaspe and the Lowlands. No question JNX.v is the largest
land holder in the area, and in Gaspe. They also hold a large number of
shares in PEA.v (who also holds land in Gaspe and was not mentioned in this
article because it is not Utica Shale.) and theyalso hold GMR.v shares.

Anyway, my point was this. Analysts, brokerage houses, whatever you want
to call them research associates, yada yada yada are taking notice of the
area and are pushing these stocks on clients very aggressively. PCQ is the
last of the Utica shale plays to be trading below $1.00 and that could be for
the simple fact it is late in filing it's financials because it is a fairly new
listing in December 2007. A news releases was put out by the company and
it was explained in great detail. PCQ also disclosed that this would be
finialized by June 30th. In my opinion once this is taken care of the uncertanity will be eliminated and the shorts will no longer be able to hold
this stock down. PCQ also has up coming news regarding it's seismic work
and drilling targets for 2008. This will probably quickly follow the news on
the financials being completed in my opinion. Then we see the real action begin on PCQ. Until then we just sit tight and accumulate all we can while
the weak hands sell ever so foolishly. PCQ holds land in both Gaspe and the
Utica region.

[cdnxtracker]

Yes indeed. Now that financials are completed these guys can get on with business and
announce something similar to what PEA did last week. PCQ is a much better play then
PEA.v but because we had no financials the big players stayed away and the knew no news
would come until after that.
Now we have our financials completed and it is time to go back up over .40cts. This has fallen
behind because of the lack of news and promotion. Now the game is on and news will very
quickly start rolling in my opinion. A lot of rumours about a JV deal with the likes of JNX or GMR,
and possibly even one of the majors in Talisman or Forest Oil.
At best this play should be trading around .50cts right now without news once these financials
came out. If they had come out earlier in the day I suspect we would have seen .40+cts. But we
always have tomorrow and probably a gap up now in the morning. Congrats to those who hung
on to this throughout the turbulance now we get rewarded and shortly after we get $1.00 plus like
the rest of the Quebec players in the area. Mark this post!
See you on the tape!
CdnxTracker

[cdnxtracker]

Maps of St. Lawrence Lowlands Claims

The 3 maps are claims in the Quebec area. They include
an overview of the Quebec claims, Gaspe' claims, and St.
Lawrence Lowland claims.

St. Lawrence Lowlands:
• 56,600 Hectares
• Secondary gas pipeline runs through claims and connecting
to main Gaz Metro line
• Estimated gas reserves in region in excess of 100,000 McF
• Talisman drilling in St. Lawrence Lowlands and producing 110
Mcf/day in Appalachian Basin
• Other exploration companies currently active include Junex,
Gastem, Squatex and Amque

http://www.petrolympic.com/PetrolympiappMar07v10.pdf

[cdnxtracker]

Wow! News after the financial statements
being filed. Who knew? This was so
bloody predictable and the company wasted
no time at all in putting out a news release.
Now we still have at least 2 more NR's in my
opinion.

1. Being the seismic program/drilling program
for 2008 any day now.
2. A possible JV deal with with either GMR or JNX
in the coming days.

I didn't sell a single share today just for the
record. I am in this one LT and for over $1.00.
Never thought it would come tomorrow, but with this
news now we may see $1.00+

[cdnxtracker]

Petrolympic to acquire 30% interest in Squatex claims
2008-05-15 18:07 ET - News Release
Mr. Mendel Ekstein reports

PETROLYMPIC TO ACQUIRE A 30% INTEREST IN ALL SQUATEX PROPERTIES

Petrolympic Ltd. has entered into a binding letter of agreement with Ressource & Energie Squatex Inc. pursuant to which Petrolympic will acquire a 30-per-cent legal and beneficial interest in 36 exploration permits totalling 672,438 hectares in the St. Lawrence Lowlands in Quebec.

Upon signing of the agreement, Petrolympic made an initial payment of $500,000 to Squatex in order to cover certain outstanding payments on the permits.

In order to complete the acquisition of the interest in the Squatex properties, Petrolympic is required to make additional cash payments of $1-million on June 30, 2008, and $1-million on July 31, 2008, with $1.8-million of such payments to be used for exploration of the properties and $200,000 made available to Squatex for its working capital. If Petrolympic does not make these payments for any reason, it will convert the initial $500,000 payment to an 8-per-cent equity interest in Squatex.

The transaction remains subject to Petrolympic's satisfactory due diligence.

We seek Safe Harbor.

[cdnxtracker]

Well as you can see in the map below, Squantex and PCQ(the brown blocks) are now joint ventured and their land trends all the way up right next with Talisman, Junex, Gastem and Questerre.Usually companies like to JV because it gets the market excited and they can work together because they own so much land that it would take a heck of alot of drilling to drill it all up. PCQ has now positioned themselves in the heart of the discovery. This is going to go ballistic right into next week.

Questerre has a $644 million dollar market cap with 179 million shares outstanding trading at $3.60

PCQ only has a $42 million dollar market cap right now, If PCQ were to climb up to even a $300 million market cap with only 70 million shares out, would still be valued less than Questerre but trading at approx $4.28 dollars per share. I believe they can do better though because they are right in the middle of the gas discovery!

Like i said before, $1.75 target first, then $2.25 followed by $4+ dollars.


Click on the link below for map, goto page 21:

http://www.molopo.com.au/canadian_pres_4_08.pdf

[cdnxtracker]

WOW! What a ride this has been from under .30cts
and up over $1.00 to a high of $1.24 today. Took
a ton of profit today and still holding a sizable position
just for fun.