To OTC Journal Members: 
 

What Might Have Been

Drill Baby Drill. The words of Vice Presidential Candidate Sarah Palin when asked what she would do to end our nation's energy dependence. It became a rallying cry until British Petroleum temporarily spoiled the party with the Gulf of Mexico fiasco.

While the message may have lost some of its power with the public thanks to BP, it still resonates with oil and gas exploration and production companies. My feeling on drill, drill, drill? Find a small company that plans to drill, drill, drill. Invest while it's cheap. When the drilling starts, the stock will go up. Sell some or all before the drilling results are published.

Why? What if the results are poor? You're out. What if the results are great? The stock is probably just blipping up in front of "Buy the Mystery, Sell the History". Want to look at a case in point. Forget the big boys. How about an idea that was featured in this publication?

Do you remember Eagleford Energy (OTC BB: EFRDF). On August 26th, I called it the David in the Land of Goliaths, and pointed out the company was going to stick a couple of drill bits in the ground in pretty short order.

Not many responded to the idea, so let's see how it worked out. 

The entry level was about $1.20. You had to wait a month. Then, as the drilling got going, it was off to the races. Today the stock is $1.80. You walked away from 50% on your money in a couple of months. I understood the reluctance. The market hadn't begun to take off, and EFRDF was an exploratory company only- no revenues yet.

So, what if I could find you a small stock- but not that small- trading on AMEX? The company already has a number of producing wells, and is teaming up with one of the behemoths to stick some bits in the ground and try to find hydrocarbons. 

This company is trading at just under $3.50 on the AMEX, and generated $.05 in EPS last quarter. What if I told you the stock was quiet with no one watching? And, what if I told you It's likely to move up rapidly with a volume surge?

The drilling is about to start in short order, and the stock is quiet- on one is watching. However, I suspect this will change in short order, and investors will be willing to pile in- starting with you.

And- the icing on the cake- the company is buying back its own stock in the open market.

I think this one could be great for a trade. I know Monday's trade did not work out, but don't let that discourage you. As soon as you think it won't work out, we have a monster win. This case is a bit different story. You can own this one for the fundamentals, or for a trade. 

On the Drill, Drill, Drill issue- not only did I find Eagleford- over on EmergingChinaStocks.com, in the "Tom's Special Picks" section, Tom has recommended one that has made a new high every day this week. It's a North Sea Heavy Oil play trading on the TSX and the London AIM exchange.

I'm planning to release this new idea at the close tomorrow. Stand by. We're due for a really good one. You will love this idea, and I'll bet it's $5 To $6 within 60 days.

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