15million buy at 2.2, page-20

A lot of these smaller producers are going to make easy big money in the future - oil ain't gettin' any cheaper, we ain't finding a billion barrels of oil every 12 days and China and India currently use about 1 barrel of oil per day per person, the US is 16!!!!.
So which way is demand (and hence prices) going?









Signs Show Oil Sands Will Continue to Reward Investors

By Michael J. DesLauriers
08 Aug 2005 at 11:43 AM EDT


TORONTO (ResourceInvestor.com) -- While investors have been racking up significant gains in the Canadian Oil Sands stocks over the past year, the ride may just be beginning. According to a recent 138-page report by Raymond James, “the best time to buy an oil sands company was five years ago, the second best time is today�. The report is aptly entitled: The Oil Sands of Canada - The World Wakes Up: First to Peak Oil, Second to the Oil Sands of Canada.

Raymond James makes the point that the “low-hanging fruit� of global oil reserves have been picked. To find new, substantial reserves, producers often have to deal with extreme conditions, like drilling in ultra-deep water, the severe High Arctic, or in politically-unstable areas.�

Venezuela, Russia and the Caspian Sea are clearly far less attractive than Alberta. Furthermore, the governments in the first two seem increasingly intent on helping out the Chinese at the expense of the west, and in the third case, ownership of the deposit is hotly contested.

The report also points out the obvious but often overlooked fact that, “The world, with current consumption of 83 million barrels of oil per day, consumes a staggering one billion barrels every 12 days. There certainly is not a billion barrel pool discovered every 12 days.� While that is really quite obvious, it is rarely put in writing so clearly and provokes a great deal of forbidding thought.

As far as peaking is concerned, Raymond James believes that it will take place in the next 5 to 10 years and lead to much higher prices.

The report concludes that, “every investor should be exposed to the oil sands sector in a significant way because it provides growth from a known resource at a time when global oil production is getting more difficult to add, and demand continues to increase. Moreover, the oil sands resource is economic to develop and it occurs in a politically-stable country that happens to be next door to the largest energy consumer in the world.�

How to Play It

Listed below are most of the publicly traded vehicles operating in the Alberta Oil Sands:

Blackrock Ventures Inc. [TSX:BVI], Canadian Natural Resources Limited [TSX:CNQ], Canadian Oils Sands Trust [TSX:COS.UN], Connacher Oil and Gas [TSX:CLL], Deer Creek Energy Limited (the recent subject of a takeover bid [TSX:DCE]), EnCana Corporation [TSX:ECA], Husky Energy Inc. [TSX:HSE], Imperial Oil Limited [TSX:IMO], Nexen Inc. [TSX:NXY], OPTI Canada Inc. [TSX:OPC], Petro-Canada [TSX:PCA], Shell Canada Limited [TSX:SHC], Suncor Energy Inc. [TSX:SU], UTS Energy Corporation [TSX:UTS] and Western Oil Sands Inc. [TSX:WTO].

Most of these companies are producing from the area and plan to expand in the coming years. Many of them are at or near 52-week highs and all have performed exceedingly well this year.

Conclusion

Raymond James is not alone in its call for a continued run in the Oil Sands shares. In his institutional client conference call Friday (the substance of which was reported in the Globe and Mail’s Saturday edition of the Report on Business), Don Coxe, chairman and chief strategist at Harris Investment Management told listeners that he too believes that what we have witnessed may well be only the first wave of enthusiasm for this story.

While shares in companies involved in the oil sands have rewarded investors with big profits, there would appear to be a confluence of factors at play, which will extend gains well into the future.