Ron MeiselsWestern Oil Sands Inc.WTO.TOWEAK BUYOct 17, 2005
Has done exactly like the rest of the oil stocks and is in a correcting phase with the rest of the oils. Should start to find support at around the $20/22 area. Start nibbling here, but be aware that the sell off is not over.
Being acquired by Marathon (MRO-N). He is buying it for the sum of the parts of the valuation. Basically what you are getting with the Marathon take out is cash and about 33% of stock. You also get a junior international exploreco, Western Zagros in Kurdistan, where there are significant light oil deposits. Market is not fully valuing this company.
Marathon Oil (MRO-N) has made an offer to acquire. Part of the deal was for them to spin off their Kurdistan assets. Stock has been trading at a premium to the offer that could mean the market thinks a higher bid is coming or if the market is ascribing more value to the Kurdistan asset than originally thought. He feels it is the latter. Be surprised to see a competing offer come in.
This is 20% of Shell’s oil sands project. Has terrific leverage to doubling its production over time. Little worried that the stock is moving up on rumour.