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Torrent Energy
Makes New High (OTC BB: TREN); Drilling To Commence in November |
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In August I published a couple of
short term trading ideas in microcap stocks. Perfisans (OTC BB: PFNH)
was featured with their new, low cost, specialized microprocessor. Torrent
Energy was featured with their coal bed methane project in Coos Bay,
Oregon.
By the end of August PFNH was
looking good on a 50% move, and TREN was languishing at a 15% loss.
Today, the roles have completely reversed, which is probably reflective
of the overall market. The chip stock has come back down to where it started,
and the energy stock is making new highs. Energy stocks are market darlings
these days. On the microcap side, we have joined the energy party with
TREN
and HYPD which woke up two weeks ago and looks like it wants to
challenge its old highs.
Here's an excerpt from our original
presentation on TREN.
Torrent Energy was formed
for the express purpose of developing a CBM (Coal Bed Methane) project
in the Coos Bay area in Oregon, along the Oregon/California border. Here's
a map of the area. The original with version with the keys was simply too
large for today's edition, but this gives you the general idea.
To date, Torrent has acquired
the rights to 60,000 CBM rich acres in the Coos Bar area, and intends to
acquire 40,000 more acres before year's end.
Using results from several test wells
which were drilled in 1993 and 1994, independent reservoir engineering
firm Sproule Associates (one of the largest three in North America)
estimates there are approximately 780 bcf (billion cubic feet) of CBM "Natural
Gas In Place" contained within Torrent's first 50,000 acre parcel. This
is not to be confused with proven reserves. Proven reserves are what Torrent
will set out to establish over the next several years.
Most analysts estimate 1 bcf (billion
cubic feet) of natural gas has an unextracted value of approximately $1
million. Therefore, if the 780 bcf of natural gas Sproule Associates estimates
is in the ground becomes proven reserves over time, this property could
have a value ranging upwards of $780 million. This estimate was
provided on the first 50,000 acre parcel the company acquired. Since then,
they have acquired an additional 10,000 acres, and are looking to acquire
another 40,000 acres before year's end.
Today, just after the market closed,
TREN
issued a press release containing two important features. First,
TREN
announced it would commence drilling at six already identified locations
in early November. The six hole coring program is expected to commence
in early November and take approximately two to three weeks per hole in
order to properly complete the coring and sampling process. The analysis
of the coring samples should be complete within sixty days. After watching
HYPD
over the last couple of weeks, we have first hand experience watching what
can happen when coring results are announced.
Secondly, TREN announced it
had retained Capital Financial Media to embark on a major exposure campaign.
The company is investing a substantial amount of capital to make sure there
is an audience for their results. The early look we had at this idea could
pay off as more investors learn about the Coos Bay project and early results
are delivered.
Torrent Energy is just getting
rolling. Early independent estimates from Sproule have the potential value
of the "Total Gas in Place" at $780 million. The maket is
saying the company is currently worth $17 million, suggeting
plenty of upside. Their program to prove out the reserves begins this year.
The first wells will be drilled in November. Sproule also estimates it
could take as many as 300 wells to fully develop the area.
This one its in its infancy and is
riding the energy wave. I believe higher levels are imminent. Go
here to read today's press release.
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