opportunities abound

[setliff]

with this pull back. kog, crzo, gpor, hp-----all for sale.

[dan_s]

For those who believe oil prices are going higher, and who doesn't, Denbury Resources (DNR) is a solid bet.

Here is what I think we have to look forward to:
1. Q4 results are going to be solid for all of the Sweet 16.
2. The market will notice that Q4 results were achieved with lower oil prices than we have today.
3. Year-end reserve reports should be impressive, especially for TGA and all of our Bakken companies. Higher proven reserves lowers the DD&A rate and thus increases reported earnings. For a Full Cost company like TGA, the increase in earning could be dramatic.
4. My focus is on cash flow from operations. Cash Flow pays the bills not the reported earnings. Production and cash flows are going up in 2011.

Based on my Net Income and Cash Flow Forecasts, which are based on $80 oil and $4 gas, the earnings per share and cash flows per share for every one of the S-16 will be higher in 2011.

I urge all of the Premium Members to take a hard look at our E&P Watch List. During the next few months we will be building company profiles and detailed forecast models for each company. I'm sure we will find a few that deserve to be promoted to the Sweet 16.

[ghrcap]

I bought some more Gastar (GST) late today. They presented at the BMO conference in NYC today, and the stock was advancing before Russ Porter began his remarks, essentially repeating what I heard last week in SF. The BMO host asked some good questions at the end to clarify further the liquids potential in their Marcellus play, which is worth the present stock value alone, in my view.

A poster at Yahoo attributed the move today to some good news leaking out on an Eagle Ford oil window well presently being completed.

I believe Global Hunter will initiate coverage on GST soon. I know they like the fact GST has no bank debt outstanding and can cover 2011 CAPEX with cash and cashflow. Porter told me last week only a huge home run in the Eagle Ford, requiring much more immediate effort, would ever cause them to issue equity in 2011. Of course, it would be done at higher price levels as a result of the success.

[adamlloyd]

And let's not forget past Sweet 16 member Nexen. With Brent around $95 the cash flow from their North Sea properties must be approaching $3B p.a., or $5-6 per share. Now if only they could get production going at Long Lake.......

Adam

[dan_s]

I love Nexen (NXY). It is heavily weight to oil. Just too many good ones to have them all in the S-16.

You guys need to take a hard look at our E&P Watch List. We have started working up profiles and forecasts on them. I will have one for FST by this weekend.

NXY and ECA not on the Watch List because they became too difficult for this analyst to forecast. Still they are great companies. I'm trying to get Nexen to host a luncheon for us this year. They are sending some people to the Petrobank luncheon next Thursday.