Something is Brewing at Oilsands Quest (Beyond Cramer's Endorsement)

On Friday, after trading down after lunch time (eastern time), Oilsands Quest (BQI) rallied from being down $0.12 to ending the day up $0.39, or by 6.7%.

After the close, it became apparent why. Clearly, someone got word that Jim Cramer would be talking about the stock in his segment. Jim Cramer mentioned BQI very favorably in a 6 ½ minute segment of his “Speculation Friday” show. In the segment, he mentioned that BQI could be a takeout target and could be worth about $16 dollars per share. He also said that, even if you discount the stock by 50%, he said it should be worth $8.34 per share. I would think that BQI could open up strong on Monday on the endorsement by Cramer.

From the volume on the stock (the stock has traded between 5-7 million shares per day over the last 6 trading sessions) and from the volume on the call options (the October $7.50 calls have been particularly active), I’ve got to believe there is still something other than Cramer’s mention of the company brewing. With the company presenting at two private conferences over the next few weeks, I would venture to guess a favorable operational update providing additional bitumen resource estimates could be imminent. We'll have to wait and see if I'm correct.

Disclosure: Author holds a long position in BQI

Comments

[Clavis:]

Interesting , more homework! Thanks

2008 Jun 22 01:45 PM

[Steve Ward:]

Other than speculation, BQI faces the hurdle of billions of dollars needed to build an upgrader and related infrastructure. BQI faces critical shortages of skilled labor and materials. In short BQI needs a partner with very deep pockets.
It still remains to be seen the extent and quality of the resource base as well. something may indeed be up, speculation is it.

2008 Jun 22 03:54 PM

[User 112088:]

the world and particularly the U.S. seems not to be aware that Canada has the second largest oil reserve next to Saudi Arabia in the world. We have all the oil we need from our neighbor to the north who happens to be our biggest trading partner. Canada could possibly hold the largest oil reserver in the world when the full discovery of oil sands reserve is realized

2008 Jun 22 04:32 PM

[User 112088:]

By the way talking about upgrader, Ivanhoe energy has a patented upgrader that operates on site and produces energy in addition. Ivanhoe just purchased a small tract to convert oilsands into a part synthetic sour crude which can be piped to a refinery. Problem solved.

2008 Jun 22 04:36 PM

[User 112088:]

Ivan stock is begining to rally. Could be a great stock.

2008 Jun 22 04:39 PM

[User 112088:]

bqi holds the largest land lease in alberta and sachcatchawan. Yes they are looking for a partner and it will not be to long coming.

2008 Jun 22 04:48 PM

[OJO Zafado:]

Oil recovered from oil sands still needs to be blended with regular crude before refining. The US gets 15% of it's nat gas from Canada. I continue to be amazed by bloggers and investors who reason that if a resource is in Canada it is the same as having it in a 51st state. Canada has recently had a 14% increase in it's currency against the US$ by pursuing a much sounder economic policy than the US. Here in the US we assume that tax cutting and massively increasing government spending is some kind of a solution. Next we will have the Democrats who are perceived as Tax and spenders. The Canadians have no powerful Senators from Podunct. They have a fully representative parlimentarian gov't. They have been dramatically increasing taxes on every plane for the last several years, and especially on Energy. They tax then spend. A near crisis was recently averted when it became a very real possibility that there might be a call for elections based on the "Tory" government revealing that the current accounts SURPLUS had shrunk to $C one Billion . Canada is not Venezuela or Russia, but do not think their resources are going to be cheap easy pickin's for the lower 48. As things stand now Canada will be increasing it's domestic consumption of nat gas to it's own economy, while at the same time huge amounts are diverted to Oil Sands projects. This is why Cranmer's prediction of $16 MM~BTU is spot on. It seems the technology for extracting oil from oil sands is continuously improving. Still it is very energy intensive in terms of what goes into the net end product. Currently it seems that less than 60% of the oil in a cubic Meter of oil sand can actually be extracted. The rest remains in the waste residue. The SAGD recovery process while dramaticaly reducing residue seems the most inefficient. BQI has had a great couple of months on the charts. They do indeed lack resources. The whole Canadian oil sands industry is still behind the curve in terms of ameliorating environmental degradation. The whole MacKenzie river basin is at risk environmentally. The charts just don't show that this stock was previously at near $8, 2 years ago before the name changed. So now I will just have to increase my next sell limit order to unload the shares I purchased near $7? After two years it is good to finally be out of the red and into the black. A double from here would not be that suprising.
Last Oct GACHF was a $1.35/share stock. Listening to Cramer you would have been out of that position at $3-$4. Now it is +/-$10? The pigs finally had their day and got a Presidential pardon? Too often a Cramer endorsement is just a kiss of death! Cendant, Montpelier Re and some paint manufacturer with lead paint exposure are just a few of his bombs.

2008 Jun 23 02:43 AM

[Tracy:]

Oilsands Quest has delivered on every promise they have made to their shareholders. This is a gem company, who has a professional, experienced management team running it. Chris Hopkins, President and CEO, is a man of his word. They have already proved reserves of 1.5 BILLION barrels as of last year. Shareholders are anxiously awaiting this past winters results, which are scheduled to be released any day now. The stock is taking off! America's need for oil isn't going away anytime soon!

2008 Jun 24 11:46 PM

[sunrises:]

Agree. There is something here. BQI is possibly a new quest worth considering.

2008 Jun 25 10:51 PM

[belmont:]

anyone know when bqi is presenting?

2008 Jun 27 10:46 AM

[sunrises:]

BQI is still very interesting. Possible for near-term rise & long-term?

2008 Jul 09 12:39 AM