Going North for Oil

Robert Hsu, June 19, 2008

With oil prices breaching record highs almost every week, we are forced to shell out more money at the gas pump every time we fill up our tanks. This is putting quite a pinch on people's wallets, especially considering that the price of almost everything else you want to buy is going up, too.

One thing that would greatly alleviate oil prices would be a new oil find. However, many current oil reserves are being maxed out. Because of this, companies are scouring the earth for new oil supplies, and they found one – in Canada's oil sands.

Oil sands represent the bulk of Canada's 179 billion barrels of proved reserves. (Compare that with 262 billion barrels of conventional crude for Saudi Arabia.) Oil sands are generally mined or steamed from thick sand and clay deposits, and are then processed to produce light sweet crude. That process is costly, however, and oil sands production only became economically feasible after oil passed $50 to $60 a barrel.

I think oil sands have the potential to be a major part of the solution to the global energy crisis. Our new recommendation this week is a major oil sands play. That's why I am recommending a company that is involved in extracting oil from Canada's rich oil sands.

This company has crude oil and natural gas conventional operations in domestic and international basins, along with oil sands mining projects. It currently produces over 610,000 barrels of oil equivalent per day and an enterprise value of approximately $55 billion. And, it is responsible for about 10% of western Canadian natural gas output.

The company is working on a significant mining project in Canada. Drilling indicates that there is an estimated 16 billion barrels of bitumen in the area, with approximately 6 to 8 billion barrels of recoverable reserves and contingent resources. This would boost its output this year and next year, as it is added to four other major development projects that the company is involved in.

To learn more about this company -- its name, ticker symbol, financials, and my specific buy-below price -- become an Asia Edge subscriber today!

Sponsored Links

What's happening in the world's major foreign markets right now? Will current events affect the stocks in your portfolio? Read InvestorPlace Asia's Top Stories to find out everything you need to know in order to stay on top of global economic news.

more...

Every country has its own special customs and traditions. Being familiar with a country's culture can often make a difference in whether you gain or lose from investing in its stock market. Check out our culture section to learn more about the societies of the world's fastest-growing emerging economies.

more...

There's a lot happening around the world today, and it's important to know how it's affecting your investments. Watch the latest videos covering important Asia topics!

more...