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In the junior oil sector, it is hard to find growth stories. Maybe the company has success with one or two good wells, and then it is years before production grows again due to financing, regulatory or geological hiccups.

However, Coastal Energy (OTCPK:CENJF) has had a terrific, almost entirely hiccup-free, run. Adding to its attractiveness as an international play, its oil is priced based on the Brent Crude benchmark, which continues to outperform WTI.

Coastal Energy had a great 2011 as growth from offshore oil assets in the Gulf of Thailand entered production, however, it does not appear the growth story in 2012 is done yet as the company moves from vertical to horizontal wells. Coastal also has onshore natural gas production that is benchmarked to Brent Crude, resulting in a significant premium compared to other natural gas markets.

Market Cap - a little over $2 billion
Trades - Pink sheets in the USA, CEN on the TSX

For the third quarter (ending Sept 30, 2011), total production averaged 12,028 boe/d (10,191 bbl/d offshore and 1,837 boe/d onshore). However, on the last day of the third quarter offshore production was approximately 15,500 bbl/d and onshore production was approximately 2,000 boe/d, giving a grand total of 17,500 boe/d.

Since then, growth has continued. At their Bua Ban North field, A-06 (initial 1000 bopd), A-07, A-08, A-09, A-10 (horizontal, initial 3000 bopd), A-11, B-09, B-10 and B-12 all appear to have hit oil. Coastal has had a very high success rate, with only a handful of wells failing to hit commercial reserves in the last few years. I've entered the initial production results of the wells where they have been provided, presumably those that have been provided are amongst the best wells. In their last press release, they stated that they will be drilling two more horizontal wells and that the remaining offshore wells would be in production by mid-February. While they have to make up for any previous decline in their older wells, it appears they should easily increase production. Even with conservative 400 bopd for the wells lacking data, that would make initial production 6,100 bopd from these wells. The upside to that number is large, there could be other wells closer to 1,000 bopd. The next two horizontal wells may have far more success, the results from the A-10 horizontal well show the greater potential for production versus standard vertical wells.

Onshore, work on a side track well, in which they have a 36.1% interest, has begun drilling. Again, given benchmarked price for natural gas in Thailand, this provides significant upside for Coastal.

Longer term, Coastal has significant other holdings that it has not yet drilled, but plans appear on the table for 2012.

Exiting 2012, they could exceed 30,000 boepd with all of these upsides playing out. Even with only a few successes, they will still see a healthy rise in production in 2012.

The risks should be apparent to any investor. There is no guarantee that they will continue to find more oil, eventually they must hit the limits of this current deposit. There is no guarantee that Thailand will remain friendly to foreign investors. I think the latter has had a significant effect in limiting the stock price. Thailand has been politically turbulent the last few years, although it has remained largely peaceful.

OCZ Technology (NASDAQ:OCZ)

Market Cap - Around $450 million

Moving parts in computers, with perhaps the exception of the fan, are going the way of the Dodo. In particular, the old spinning-disk traditional hard-drive, which we have all known since our first desktop PC, has reached its limit. (This isn't the first we've seen of the removal of moving parts. With MP3s, movie files and large flash drives, who still uses their DVD or, aghast, their CD drive?) As the early internet prediction that our data storage would increasingly take place online comes to fruition, traditional HDs are struggling to access data at the speeds we require. This is where solid-state drives (SSDs) arrive to replace their predecessor. While currently more expensive, they are blindingly fast. Top of the line notebooks already come with a solid-state boot drive for the OS, although a traditional hard-drive still handles most of the storage.

Cloud computing networks provide their users with the ability to store their documents, music and movies online, which involves massive amounts of data being uploaded and downloaded from their servers. Pressed by the need of teenagers everywhere to see the newest Twilight in only the highest of high definition, cloud computing providers are turning to SSDs to handle the massive requirements of ever higher definition media and more and more vampire trilogies.

Sales of SSDs make up nearly 95% of OCZ's revenue, so it is near a pure play on SSDs as you can get. Year over year revenue growth last quarter was almost 100%. If everything goes right, OCZ should now become consistently profitable. The floods in Thailand have caused the cost of traditional HDs to jump, giving many companies sufficient reason to make the switch to the faster SSD. And, as with all technologies, the price of SSDs will come down to the point where traditional HDs simply disappear. Moving parts create far more heat and use more electricity, in addition to their data speed limitations. SSDs are still in their infancy. Simply wander over to a computer part provider and you will see that the cost of small drives and larger drives are several times their traditional HD competitor, although this, like all technology, will come down with time. As SSDs become more broadly adopted, the companies producing these drives will reap the benefits of their patents.

I would note that it is currently amongst the companies with the highest ratio of shorts to float on the NASDAQ.

The risks include the competition in China or elsewhere make near identical products for a fraction of the price, but that seems unlikely given the technological barriers at this point. Micron Technology (NASDAQ:MU) and Fusion-io (NYSE:FIO), who also make SSDs, have had problems with margins on SSDs, although they both have higher margins than OCZ. They are both worth taking a look at if you are interested in this market.

Overall, I like how OCZ is positioned to grow as the SSD market replaces the traditional HD. It is worth noting that the CEO of Micron Technologies died on Friday in a plane crash. Micron is a much larger rival of OCZ, with a market cap over $8 billion.

Source: 2 Picks For Risk-Seeking Investors: Coastal Energy, OCZ Technology