To OTC Journal Members:
 

Market Comment

Despite the tug of war between the Bulls and the Bears in the technology heavy NASDAQ, there is little doubt we are experiencing a Bull Market in the energy sector. Increasing demand, coupled with decreasing supplies in crude oil and natural gas have led to exorbitant price hikes in these commodities over the past year.

Large energy companies are reaping windfall profits, partially at the cost of the consumer. March quarterly numbers for the energy behemoths look like technology related results. Here are several examples:

• Chevron (NYSE: CHV) quarterly profits: up 53%
• Texaco (NYSE: TX) quarterly profits: up 45%
• Sempra Energy (NYSE: SRE): quarterly profits: up 58%
• Enron (NYSE: ENE): quarterly profits: up 20%

When you have substantial growth in an individual sector, it is usually reflected in the prices of the large cap stocks first, followed by the small and microcap sector stocks.

Energy prices at these high levels lend themselves to increasing sales and profits for small North American companies whose resources have much greater value with commodity prices so high.

In a recent speech, President Bush referred to Canada as a primary potential source of new supplies of Natural Gas and Crude Oil.  As we pointed out in our March 26th edition, CBS Marketwatch published an article on March 15th, siting Atlantic Canada (The Newfoundland Region) as a primary area for a source of Natural Gas and Crude.

There are several sectors one could choose from in the energy field as an investment target. You could invest in exploration companies, production companies, infrastructure companies, or energy delivery companies (utilities).

The OTC Journal offers you the alternative of investing in a small but growing company involved all four areas. In our opinion, this maximizes your upside potential while minimizing your downside risk.
 

More News From Energy Power Systems LTD (OTC BB: EYPSF)

In our profile release dated February 12th, we stated we believed Energy Power should be accumulated with a $5.60 price target over the next six to eighteen months.

Nothing has changed, and we are more optimistic than ever, as the company is executing its vertically integrated business plan. 

On the infrastructure side, Energy Power's M&M Engineering division will enjoy at least $20 million in revenues this year as business is brisk in the Newfoundland region of Atlantic Canada.

Depicted here is the Newfoundland Transshipment Terminal on which M&M has done a lot of the construction. Contracts for the $4 billion upcoming White Rose project from Husky Oil will begin the award process in September, and M&M is expected to enjoy a significant surge in business as a result.

If you took advantage of recent short term market weakness and accumulated some of this stock during this past week in the $2 range you are to be congratulated. In the $2.50 range there is still more than a double in this stock up to our target price.
 
 
 

Energy Power New Release

On Friday, just after the market closed, Energy Power released news on its latest acquisition. This move by management is in keeping with the business plan which was laid out to the editors of the OTC Journal when we reviewed the company's prospects back in January.

Energy Power announced it had acquired a 20% interest in three Natural Gas producing wells located in Alberta, and managed by BP Amoco and Talisman Energy. These properties will provide valuable monthly cash flow to the company.

The company now has an infrastructure division with M&M, and oil and gas producing division with increasing cash flow, and exploration division with its property on Prince Edward Island, and a power division developing on the power starved Indian sub-continent.

If you like this sector and this company please continue to accumulate with $5.60 in mind. The stock rebounded off a low earlier this week, but there is plenty of upside left to the previous high of $3.75. If it could break through the previous high, $5.60 could be near at hand.

Here is the complete text of the news release for your review:
 

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