To OTC Journal Members: 
 

Penny Stocks- I Guess We Just Love Them

It was no contest. The score was about 600 to 2. About 600 readers said they'd like some unique penny stock ideas. 2 told me not to bother. Even with a 2 man filibuster, this would still pass even in Congress. Majority rules. So far, I've got 3 I'm looking at, and today's is the first and possibly most timely.

I've decided to start with a high risk resource idea. This company is like Julie Child. It has the recipe. I use the metaphor because I recently saw the movie "Julia and Julia" with Meryl Streep. Julia Child was famous for her recipes, and this resource company is simply following a recipe- add the flour, eggs, sugar, butter, and baking soda, put them in the oven, and you end up with a cake. 

The same recipe can be followed with a resource company. First, identify the property- in proximity to where others are making money. Get the rights to explore, get some money raised, bring in some experts to advise you, and then start drilling. The stocks will generally trade up into the drilling program, and then sell off once the results are in unless the results are a gigantic surprise to the markets.

Today's idea is a company baking a natural gas cake in Wyoming smack dab in the middle of the most prolific natural gas structure in the Green River basin, second only to Texas in nat gas production in the US. There is wide spread belief Nat Gas is one of the key components in the future of our energy use- it's the cleanest of all the major energy resources. It's used to fuel most of the power plants in the US. 

I decided to introduce this one first- we're on the front end of a major awareness campaign for this stock. I insisted on being first out, just before the drilling starts in an area that has a 97% success rate.

Read on.....
 

Grid Petroleum (OTC BB: GRPR): Profits in the First Bite of this Cake

Little known and under followed Grid Petroleum is about to get noticed by investors. The company is following a Julia Child style tried and true recipe for success- and when I say success, I don't mean I know the company is going to be a monster long term success story- for today's purpose, I'm just referring to the stock price- in between now and when the company actually announces some drilling results, I believe the stock will do really well and you will make money- but only if you act while the stock is still at the bottom of its trading range. Long term is anybody's guess, but these recipes work time and time again.

Grid Petroleum is an oil and gas exploration company focussing on natural gas properties in Wyoming. To be successful with the recipe, you need a few ingredients. First, find a top notch management team. Second, identify some prolific properties with a high probability of recoverable reserves. Third, raise some capital to pursue the exploration rights on the aforementioned properties. Fourth, do your studies and identify where to drill. Fifth- raise the necessary capital to start drilling. Sixth- start drilling and keep your fingers crossed.

Now- here's the most important concept investors need to know and understand: This stock is going to trade very well up to the point at which they actually announce their first drilling results. 

That's right. Attention Penny Stock Lovers- you have to own these stocks up to the point at which they actually drill? Why- because the mystery of potential fuels the investor interest in the stock. 

So, where is this company? Are we ready to put the cake in the oven? 

• GRPR has the management team- see their bios at www.gridpetroleum.com- very experienced guys
• GRPR has locked down the properties by acquiring the rights to the Jonah Prospect in Sublette County, Wyoming- one of the richest hydrocarbon formations in North America. GRPR has four separate properties spread across 4,000 acres.
• GRPR has raised an initial $300k with a pledge from an institutional investor of $5 million to finance the initial drilling programs.
• Drilling will commence sometime soon- to be announced.

The Jonah Fields are located in Western Central Wyoming, a little Southeast of Jackson Hole. This particular geographic location already boasts 500 producing natural gas wells, and contains an estimated 26 Trillion cubic feet of natural gas. The Jonah property now owned by GRPR is estimated to contain 300 billion cubic feet of natural gas. The estimates were compiled by NYSE resource giant Schlumberger (NYSE: SLB) for GRPR.

In 2007, there were 3112 wells drilled and completed in this region, and 92.4% found commercially viable natural gas. This is one of the richest hydrocarbon formations in the US- and part of the Green River Basin geological formation.

Independent studies have been conducted by Schlumberger. It was determined an average well, using 40 acre spacing, could hold anywhere from 1.0 – 3.0 BCF of recoverable gas. On the higher side, it is estimated that recoverable gas from each of these wells could be as high as 3.0 – 5.0 BCF per well. 

Therefore, the properties now controlled by GRPR could contain anywhere from 37 BCF to 1.3 TCF of recoverable gas reserves. That's right - 37 Billion with a "B" to 1.3 Trillion with a "T" cubic feet of nat gas could be recovered over the life of these properties.

Looking at this chart, I can tell you I don't believe there could be a more perfect time to pounce on this stock. This stock was about $.80 back in March when the company signed it's LOI to acquire the Jonah Propect properties. In pretty short order, the stock ran from $.80 to a high of $1.70- that's a 112.5% ROI. in 2.5 months.

Now, the stock has come back to the starting line, and the company has been quiet since last May as it completed the acquisition of the properties, and arranged the financing for the drilling. 

So- here's the next steps. Get ready to drill, and announce you're ready to fire it up soon. That's likely to put a charge in into this stock. Get back on the audience recognition program- let the world of speculative investors know what you've got going. I had heard there would be some pre open news this morning related to the drilling program, so check your news feed for the latest 411.

Then what happens? Likely an inclining stock price as you see on this chart from March to Mid April. The stock moved 112% in that time frame, and I believe it's going to happen again.

An interesting Penny Stock? You asked for it, and you got it. A long term barn burner? Too early to call. Why now? It's known as the "Thrill of the Drill". It's the mystery of not knowing the outcome that will drive the stock price higher.

GRPR closed at $.78 x $.80 yesterday. I would suggest accumulating right up to $.90. As always, with any BB stock you have to check your quotes and know your markets. Please go to http://www.otcmarkets.com/stock/grpr/quote for the most accurate quote. Your real time quote provider or brokerage firm is not likely to have the best hybrid quote. It will likely be just the bulletin board quote, and it won't be right.

I like this stock to head right back to the $1.70 level it enjoyed back in April. I believe you might see it happen between now and the end of August. From yesterday's close, this represents a 112% ROI- if it moves on to new highs from there, great. Your SSL should be 20% on something risky like this, so let's say $.64- or whatever stop loss level allows you to sleep at night. 

Home Page : www.otcjournal.com
Email Questions or Comments To: editor@otcjournal.com