Athabasca Oil Sands Corp (ATH.TO)

It is a renters stock. Every month there is something to get worried or excited about. Had some exciting news recently about a joint venture with a Chinese company for 1.3 Billion. It is a ‘Put’ stake. That is why it is up a $1.50 in the last two trading weeks. They will continue to spend a lot of money drilling. Management has had to jump through a lot of huddles over the last couple of years and the market is still leary. It could have upside to $12-$13 but there is always something that could bring it back down. Now may not be a bad time to look at it though.

The Keystone pipeline is secondary to what this company is doing. Have a bunch of oil sand assets, mostly in Alberta, which they are able to extract value from. Recently sold off a joint venture interest to PetroChina and waiting for ultimate approval of Dover. That way they can put the asset to PetroChina in exchange for $1.3 billion cash, which amounts to about $3.25 per share. Have good assets which they are going to joint venture as well.

Watching with great interest. With the last decision on the Dover approval it has a period of time where PetroChina (PTR-N) has a chance to review if they are going to be exercising. Clock is ticking on the 30 day period. Also, have a conventional operation in the Duvernay, which is extraordinarily expensive per well. If it pops on good news from PetroChina, he would Sell.

His model price on this is $1.71. EBV is $8.72. If it transitioned past his EBV line he would be interested in this.

Have a great thermal project in the oil sands. It is hung up on an issue with first nations. It is in front of the regulators and he expects a ruling any day. Wait for the resolution. In other parts of operation they have done a very good job. Down side will be very limited.

They should be coming out with a critical announcement next Tuesday. There will be a ruling for either them or a 1^st Nations band. It is expected they will rule in this company’s favour. If they do, it will unlock the ability for them to sell a particular asset to PetroChina for $1.3 billion, which is worth $3.30 per share.

Great assets but unfortunately, this is one of those “over the horizon” types of projects. Thinks 1^st production will be coming on late in 2014. In today’s environment, nobody wants to pay much for the future. Until they start producing oil in reasonable quantities, the price will remain the same and there is no dividend.

It is undervalued right now. The light oil properties are probably worth $7-8/share. Thinks total assets are $10-$20/share.

This sector has been kind of bearish since 2011. He sees an attempt at basing because the chart shows a low and the stock price is a little higher right now. There is a possibility of a new uptrend possibly developing but he would want to see a bit more evidence. If it can hold out, you are looking at a target of about $11. He would be cautiously optimistic on the stock.

Likes this. Continue to have talks for joint ventures on some of their large oil sands plays. They already did one with Petro China on their Dover property. That coupled with their currently producing 5000 barrels a day in the Alberta deep basin, it could easily grow to 10,000 barrels. There are just some issues with infrastructure that they weren’t able to get the processing plants to process the oil and gas. These factors would certainly move the stock.

(A Top Pick July 16/12. Down 45.05%.) Since the recommendation, the government banned further takeovers by state owned enterprises and also announced they were looking at a new carbon tax, which decreases the value of oil sands properties. Currently this is trading at a point where you could simply value it on their light oil business and get all of their oil sands for free.

(Market Call Minute.) Would classify this as a Hold to a Sell. They are waiting for a deal with the Chinese to help get the capital to bring the play on line.

Ridiculously cheap. The light oil assets alone could justify the current stock price. The big play on this one is obviously the oil sands. They have a $1.3 billion Put with the Chinese. Plus their investment in the Dover project in which investors are worried it will not get approved. The asset value is well north of $20. Management is buying aggressively.

It has struggled this year, dropping through $10 support. Perfect storm of things going wrong. COO left the company and other issues added to take the stock down.

Company has had a tough go. Company has been under a lot of pressure and the president just left a week ago. There is a lot of uncertainty right now.