shareswiki 2011 hotlist

Some more positive exposure from England, SharesWiki, has recommended RRL/S as its Number 1 pick on its annual 2011 Hotlist for speculative shares.

Cut and paste from Shareswiki,

2011 Shares Hotlist A Multi-Bag of Tricks
January 7, 2011 by Sam
Filed under News
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2010 was a great year for investing in mining and oil juniors with companies such as Encore Oil and Xcite Energy leading the way. With 2011 looming, its time to look ahead and predict the hot trends for the following year:

The 2011 Shares HotList
1. RRL

2. BAO

3. AGQ

4. EO

5. AST

6. BZT

7. PAL

8. SHG

9. XEL

10. AAZ

1. Range Resources (RRL) - 2011 could be RRLs year. Edison have stated in their latest report that they believe RRL can currently support a share price of 11.5p based on their assets. With near term exploration success in Georgia and Puntland and anticipated improved production rates at Texas and Trinidad, RRL could be the star of 2011.

Range are currently producing in Texas and still have 80% of their acreage to drill. The full area is expected to produce 1,970 barrels gross per day (RRL hold a 22% interest). The chance of success in Georgia is good and the gross reserve estimate is 613m barrels gross. The results will be known in Q1. Rig mobilisation is expected for Puntland in March and they also have a 10% interest in Trinidad which is currently producing 700 barrels per day which is estimated to improve to 3500 barrels per day by mid year.

CEO, Peter Landau, has shown exemplary skills in the management of RRL. RRL has had a colourful history, they were listed on October 2007 at 28p based solely on Puntland. The project did not materialise due to delays and Landau decided to acquire stakes in other assets (namely Texas, Georgia and Trinidad).

It is logical believe that the price should be above 28p before the Puntland spud in Q3 since the company has more assets (and cashflow) than back in 2007. By adding the initial 28p for Puntland and Edison current valuation of 11.5p, we can get a good idea of where the company should be if Puntland goes ahead this year, which is 39.5p and this figure does not take into account success in Georgia or the continued production work in Texas and Trinidad.

The strategy here is to accumulate a position sub 10p and then hold. The chances are that by Q3 the price will have exceed 10p (initial success in Georgia in Q1 should see it go to around 18p) whereby it will be possible to top slice and go for a final bet on Puntland (20% interest of 2 blocks in Somalia purported to contain between 4.4 and 20.8 billion barrels of oil based on previous drills by Conoco in the 1990s).

With a chance of 6 Bagging before the rig even arrives in Somalia, investing in RRL is not to be overlooked and even a 1 price target by year end is not out of the question when taking account of the facts.

Cheers

jamit01