May 8, 2010

[dan_s]

This has been one heck of a week for the EPG crew (basically just Kim and I).

We have the expected bugs of a new website to fight through and Kim is doing an excellent job. Plus, I had another "gig" I needed to attend to up in Dallas on Thursday. While I was on the road the Market went crazy. The U.S. dollar strengthening against the Euro is the primary reason for the drop in oil prices.

I'm about half way through updating all of the Sweet-16 forecast models. All of the companies in the S-16 have reported solid 1st quarter results. Even ATPG's small loss was expected. In fact, if you take a look at my ATPG forecast model you are going to notice that production is going up sharply from here as they tie in new wells to the Telemark Hub and the Canyon Express Pipeline. ATPG is one of the most heavily shorted stocks in the Market. As a result it can make some wild moves. I do not see much downside from here as it is trading at less than 1X by Cash Flow Per Share forecast for 2011.

Two more that really look good to me are Gulfport (GPOR) and Kodiak (KOG). Both have solid as a rock Balance Sheets and both are on-track to deliver strong production growth this year.

If you live in the Houston area I hope you can make it to our EPG luncheon on Friday, May 14. Sweet-16 member GeoResources (GEOI) is hosting. Frank is a good speaker and GEOI has a strong story. They have a significant new joint venture in the Bakken Shale to tell us about.

We now have almost 80 "Founding Members". Our goal is to build our membership to 500 by year-end. Please send our website link to anyone who you believe can benefit from this network.

Dan Steffens, Managing Member