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Wall Street Resources has been providing equity research and investment strategies to investors since 2003. Its specialty is educating investors on its investment management philosophy to combine low risk investments with inflation protection and high growth companies as an alternative to a... More
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Wall Street Resources, Inc.
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  • Initiating Research Coverage On Water Technologies International, Inc.

    Today we are initiating research coverage on Water Technologies International, Inc. (OTC:WTII):

    Water Technologies International, Inc. is an environmentally-friendly company engaged in manufacturing and distributing Atmospheric Water Generators (AWGs) that can optimally produce water from air anywhere on the planet where there is electricity, humidity (45% minimum) and temperatures exceeding 40 degrees F . These unique devices utilize a patent pending technology to produce clean, great-tasting and safe water from the humidity in the air. Leveraging this technology, the Company has existing products that can address the needs of billions around the globe in need of potable water and to provide fresh and inexpensive drinking water domestically for a number of large commercial applications.

    http://www.wallstreetresources.net/pdf/fc/WTII2.pdf

    Please feel free to call our office at 772-219-7525 if you have any questions or would like additional information.

    About WSR's Research Reports

    WSR's Research Reports - the company's flagship featured company reports - are 30 to 50 page comprehensive reports designed specifically for emerging growth companies. The scope of the report is broad and deep. WSR's top analysts dig into a company's background, business model, products, and financial strength. Then they look at the industry and where the company's model fits in, while scouring the company's website, SEC filings, and product profiles.

    Sincerely,

    Paul Silver
    Wall Street Resources, Inc.
    3545 SW Corporate Parkway
    Palm City, FL 34990

    772-219-7525 (telephone)
    772-219-3579 (fax)
    psilver@wallstreetresources.net

    Disclosure: I am long OTCPK:WTII.

    Additional disclosure: Water Technologies International, Inc. is an active client. Please refer to important disclosures at the end of the research report.

    Tags: WTII
    Mar 15 3:53 PM | Link | Comment!
  • Recent Deal Validates Higher Than Expected Per Acre Valuation In The Wolfcamp

    In late January 2013, Pioneer Natural Resources Co. (PXD) agreed to sell a 40% stake in 207,000 acres in West Texas's Wolfcamp Shale to Sinochem Group in a deal worth $1.7 billion. Sinochem agreed to pay $500 million in cash for roughly 82,800 net acres and will pay the remaining $1.2 billion by carrying a portion of Pioneer's share of future drilling and facilities costs. The deal is expected to close in the second quarter 2013. One analyst placed the value of Pioneer's land at about $17,000 an acre, well ahead of the analysts' expectations of $12,000 an acre, representing a 41.6% increase in value per acre. This compares to nearly $6,000 per acre paid by ConocoPhillips in September 2011. This valuation validation should serve as positive stock performance catalysts for publicly traded operators in this play, named below.

    As way of background, the Wolfcamp Shale is a shale formation located in the Permian Basin of Texas and New Mexico. The Wolfcamp Shale is an oil & natural gas zone located below the Spraberry Formation which is also an oil field. Directly below the Spraberry oil play lies the Dean sandstone and then the Wolfcamp oil shale formation.

    For years, E&P companies have been drilling the Spraberry field which was discovered in 1943 by a farmer in Dawson County. Production didn't really start until 1953 in Midland Texas where companies drilled the Spraberry Formation as well as the Dean Formation. Due to advances in technology including horizontal drilling, companies have been tapping into the Wolfcamp Shale and are realizing huge success, creating a giant land grab for mineral rights land leases. The Wolfcamp oil discovery is even causing exploration companies to rework old wells now that horizontal drilling has caught fire. Activity levels in the Wolfcamp now mirror those in the Eagle Ford Shale, Granite Wash, Niobrara Shale, and Bakken Shale.

    According to an article in Oil and Gas investor www.google.com/url, IP rates often exceed 1,000 BOE with a 90% oil and liquids mix. This data comes from more than 60 wells drilled. Pioneer projects ultimate recoveries from Wolfcamp horizontals in the range of 350,000 to 500,000 BOE. Operators claim that this region is perfect for an oil shale: high in organic content; filled with silica and therefore brittle; having good porosity and natural fractures; and in the optimal thermal maturity window to product oil. An analyst at Global Hunter Securities stated that:" We expect the horizontal Wolfcamp in the southern Midland Basin to emerge as a major new unconventional oil play in the U.S."

    Estimates have the Spraberry Shale holding up to 10 billion barrels of oil as well as 3 trillion cubic feet of natural gas. Global Hunter estimates the play's potential recovery resources range from 4.2 to 8.8 billion BOE, compared to USGS's Bakken estimate of 4.3 billion BOE. Some of the hot spots of the Wolfcamp are in Upton County, Midland County, Andrews County, Irion County, Loving County, Pecos County, Winkler County, Glasscock County, and Howard County.

    There are numerous operators exploring the southern Midland Basin Wolfcamp oil shale that may benefit from this new high valuation watermark, including but not limited to Approach Resources (AREX), ConocoPhillips (COP), Laredo Petroleum Holdings (LPI), BHP Billiton (BHP), Apache Corporation (APA), Devon Energy (DVN), Pioneer Natural Resources , and EOG Resources (EOG).

    Approach Resources

    Approach Resources, Inc. is an independent oil and natural gas company headquartered in Fort Worth, Texas. Its core operating area is in the Permian Basin in West Texas, where it has drilled over 695 wells since 2004. It targets multiple, oil and liquids-rich formations in the Permian Basin, and operate over 165,700 gross acres.

    (click to enlarge)

    ConocoPhillips

    ConocoPhillips explores for, produces, transports and markets crude oil, natural gas, natural gas liquids, liquefied natural gas and bitumen on a worldwide basis. Its portfolio includes legacy assets in North America, Europe, Asia and Australia; growing North American shale and oil sands businesses; a number of major international development projects; and a global exploration program.

    (click to enlarge)

    Laredo Petroleum Holdings

    Laredo Petroleum is an independent energy company with headquarters in Tulsa, Oklahoma. Laredo's business strategy is focused on the exploration, development and acquisition of oil and natural gas properties in the Permian and Mid-Continent regions of the United States.

    (click to enlarge)

    BHP Billiton

    BHP Billiton operates as a diversified natural resources company worldwide. The company engages in the exploration, development, and production of oil and gas; mining and refining of bauxite into alumina, and smelting of alumina into aluminum metal; and mining of copper, silver, lead, zinc, molybdenum, uranium, gold, and diamond, as well as development of potash deposits. It is also involved in the mining and production of nickel products, manganese ore, and manganese metal and alloys, as well as in the mining of iron ore, metallurgical coal, and thermal coal.

    (click to enlarge)

    Apache Corporation

    Apache is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina.

    (click to enlarge)

    Devon Energy

    Devon Energy Corporation is a leading independent oil and natural gas exploration and production company. Devon's operations are focused onshore in the United States and Canada. We also own natural gas pipelines and treatment facilities in many of our producing areas, making us one of North America's larger processors of natural gas liquids.

    (click to enlarge)

    Pioneer Natural Resources

    Pioneer Natural Resources is a large independent oil and natural gas company. Pioneer is one of the most active drillers in Texas' Spraberry/Wolfcamp oil field in the Permian Basin and the Eagle Ford Shale play in South Texas.

    (click to enlarge)

    EOG Resources

    EOG Resources, Inc. is one of the largest independent (non-integrated) crude oil and natural gas companies in the United States with proved reserves in the United States, Canada, Trinidad, the United Kingdom and China.

    (click to enlarge)

    It is challenging to measure how much this new valuation comp may impact these stocks. Determining the exact number of acres in this play and getting a breakdown of producing vs. non-producing Wolfcamp acres is not typically disclosed in public filings. However, given the information, one could estimate that, all else being equal, the companies' non-producing acres in the Wolfcamp are now worth approximately 44% more than prior to this recently announced deal. In addition to this land bump, as these acres are drilled out, the production based on the available data to-date should boost production levels (and PV-10) and be accretive to each respective stock.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: APA, AREX, BHP, COP, DVN, EOG, LPI, PXD, long-ideas
    Feb 15 5:38 PM | Link | 1 Comment
  • Interview With Black Ridge Oil And Gas, Inc.'S CEO Ken DeCubellis

    (click to enlarge)

    12 month chart

    Paul Silver of Wall Street Resources interviewed Black Ridge Oil & Gas, Inc.'s CEO Ken DeCubellis, in November of 2012. Here is the transcript from the interview.

    Question: You have many years of experience working with large, traditional energy as well as renewable energy companies. How would you compare those experiences? What was it about Black Ridge that attracted your interest?

    Ken: Working at Black Ridge Oil & Gas is really the best of both worlds. We are a vibrant, start-up company with a great team of entrepreneurs and subject matter experts. It is a lot of fun working with this team and in this environment. Plus, the return potential in the oil play in the Bakken is incredible. We have an opportunity in the Bakken with our business model, if we execute our strategy, to return a significant amount of value to our shareholders.

    Question: 2012 was really the beginning for Black Ridge Oil and Gas. You have made enormous progress in a very short period of time both from a production/operation as well as a financial perspective. Can you go over the major accomplishments?

    Ken: Our relationship with Dougherty Funding, LLC and our $20 Million Credit Facility is the biggest accomplishment the Company has had in 2012. As a non-operator, when you get down to it, we are really just a financing partner to our operators. So, obviously, having access to low cost capital is critical. Also, with our second quarter 2012 results and our production estimate of 300 BOEPD for the third quarter of 2012, we are developing our leases at a rapid pace and are cash flowing. This growth rate has been nice to see this year and it demonstrates the value of our business model.

    Question: As a Bakken-focused company, what trends are you seeing vis-à-vis drilling costs and activity? What are your expectations over the next 12-24 months in the Bakken?

    Ken: The good news is that we are seeing drilling and completion costs come down. Our operating partners have prioritized this and we are beginning to see the results. I expect AFE's to be in the $8 Million to $9 Million range for 2013. At these levels and 500,000 EUR wells, we would anticipate making 3X cash-on-cash returns.

    Rig counts have pulled back into 190 range, which is below the peak levels we saw earlier in the year.

    Older, inefficient rigs have been retired, which is a good thing. We are also seeing more downspacing in the heart of the play, but I don't expect a big increase in downspacing until additional takeaway capacity is added in the 2014/2015 timeframe.

    Question: How would you describe your overall strategy? How are you different from other small cap Bakken companies?

    Ken: First, we are a non-operator and we have no plans to alter the business model. We believe that the inherent low cost structure in the non-op model will give us superior returns over the long term. Secondly, active portfolio management is a critical part of our business philosophy. We are not taking a shot gun approach to the play, but instead are laser focused on specific geographies and partnering with specific operators. As such, we believe we can achieve better than average Bakken returns over the long haul.

    Question: Can you address your capital needs as well as the status/timing of moving up to a major exchange?

    Ken: We currently have sufficient capital to execute our development and growth plans for 2013. Regarding moving up to a National stock exchange, that is definitely in our plans. We would qualify now based on the two year operating history standard subjection to completion of certain prerequisites which we believe we will be able to meet. However, I want to take a measured approach to this. It is important that we execute on our plans and demonstrate the rapid monetization of our leases into production and cash flow so that when we migrate to a National stock exchange, we have significant momentum behind the company.

    Question: What is your opinion on the price of oil?

    Ken: I have a very bullish view of oil prices in the next 3-5 years. The last four years have been challenging for the global economy, but we are beginning to see positive signs of economic improvement. I remain upbeat that the folks in Washington DC will find an acceptable resolution for the fiscal cliff situation so that we can keep the positive economic momentum going.

    Thanks Ken!

    Disclosure: I am long OTCQB:ANFC.

    Additional disclosure: Our firm provides consulting services to Blackridge Oil & Gas. Full disclosure information can be found at:www.wallstreetresources.net/disclaimer.asp

    Tags: ANFC, Oil Gas, Bakken
    Dec 05 11:56 AM | Link | Comment!
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