Another top official was replaced in the next chapter of the ongoing issue with the Internal Revue Service. Lois Lerner, who was in charge of the division which targeted tea party groups and disclosed their activity, was put on administrative leave. She is is being replaced by acting IRS veteran Ken Corbin, who will be stepping up as head of the exempt organizations division. Lerner had declined requests to resign and is now on paid leave. In her questioning with the House committee, Lerner stated her innocence but did not answer any questions while invoking her Fifth Amendment right. Republican senator Charles Grassley, said “The agency needs to move on to fix the conditions that led to the targeting debacle. She shouldn’t be in limbo indefinitely on the taxpayers dime.”

Procter & Gamble (PG) announced that they will be placing former CEO, A.G. Lafley, back at his post. This move was made as the company is trying to ignite growth in the face of extreme global competition. The current CEO, Bob McDonald, will be retiring on June 30 and has held the position since 2009. Lafley held the office previously from 2000 to 2009 and has stepped in immediately to begin the transition period. His new title will also include president and chairman. Board director, Jim McNerney, said “A.G.’s track record and his depth of experience at P&G make him uniquely qualified to lead the company forward at this important time.”

Abercrombie & Fitch Co. was trading down over 12% on Friday after announcing their disappointing earnings report. The company said that comparable store sales were down 17% when compared to last year and there was quarterly net loss of $7.2 million, or 9 cents per share. Analysts were expecting a loss of 5 cents per share on revenue of $941.6 million. Chairman and CEO, Mike Jefferies, said “The first quarter proved more difficult than expected on the top-line due to more significant inventory shortage issues than anticipated, added by external pressures.”

That’s all for the day.

All the best,

Jack Aubrey

The post Procter and Gamble (PG) Restores Lafley Back To CEO Post appeared first on Oakshire Financial.

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Gotta respond to a number of talkbacks from last week’s letter on the site.  It seems there’s a world of confusion out there regarding gold – where it came from and where it’s going – and we’re going to damned our doest to clear it up.

We’ll start with the following.

Gold is a must-own asset.  We’ve been saying that for years, believe it in our bones and absolutely nothing will make us change our minds.

Is it the only asset one should own?

Not by a longshot.

And why not?

Because the price of gold fluctuates, and as many of our good readers have taken positions in gold in order to make a buck from it, we’ve endeavoured to apprise them of major turning points in the metal so that they might better be able to grow their asset base and avoid losing capital while sitting on dead money.

But it seems not everyone was listening.

You Can Buy a House in Detroit

With apologies to those of you from Motown, a simple question.

Had you bought a home in downtown Detroit in 1990 for a hypothetical $100,000 and paid for it and fell in love with it, and held onto it dearly and planned to retire off the appreciation in value of the thing, and then watched as the city fell apart and your home’s value declined, first to $93,000, then to $85,000, then to $70,000, $60,000, $36,000, before finally coming to rest at $28,000, would you say to yourself –

“No, sir!  I’m not selling.  I believe in this.  It will come back.  I will eventually be rich from that $100,000 investment.  It’s crazy to take a loss now.”

The question is obviously rhetorical.  The truth of the matter is bad investors hold losing positions.  Good ones take losses – quickly – and then redeploy.

So when our good reader, Michael Miller writes –

You are ignoring history. ALL FIAT CURRENCIES FAIL. Hyper inflation is proceeded (sic) by things you cannot live without going up in price … until the savers of worthless unbacked fiat paper money realize they are holding worthless paper. I will trust my gold over a little wood, cotton, fancy printing and ink that the government calls trillions of dollars.

– we can do little but shake our heads.

By this would-be teacher of history’s all-or-nothing logic, the inevitable failure of fiat currencies means we should never possess the stuff? – ever?

Worthless paper?

I guarantee you that the fair Mr. Miller’s rhetoric is little more than bluster.  He’s been holding his gold (and living untroubled with his dollars), while missing out on great money-making opportunities for two full years, because, after all, ALL FIAT CURRENCIES FAIL, and we wouldn’t want to invest in anything that might make us a little more of that smelly fiat currency in order to buy more gold down the road, now would we?

Hold your water, Miller – we still love you.

The Rise was Investment Driven

Separately, good reader Stephen Benedict, writes that the rise in gold came about as result of –

… the sense of impending doom brought about by the 2008 financial crisis… Another was the massive amount of money printing by the Fed and the expectations of high inflation. Perhaps another is the historic amount of debt we’ve run up.

And another friend, Eldon Bloedorn, tells us that it’s rather simpler than all that –

Dollar is rising. What else is there to talk about?

Well, gentlemen, maybe.  Just maybe.  But we don’t think so.

As we’ve shown here before, both gold and silver have been in decline for two straight years.  Remember that!  Two straight years!

And during that time there was plenty of post-crisis doom, lots of QE ‘money-printing’, no surcease in the running of the debt – and the dollar, dear friends, has fluctuated in a range both up and down for the last four years, during which gold rose, and then fell.

Here’s the chart from last week’s letter for the buck –

None of these are the real reason why gold and silver have moved as they have.

The real reason is simpler than all get-out.

And it goes like this.  (Forgive us if it sounds repetitive – it is.)

Gold rose on the back of increasing investment interest in the metal.  And fell as that interest waned.

C’est ca!

There was a massive surge in volume at the top, as the monthly chart for gold, below, shows –

While silver was even more blatant about it –

Yet neither of the above charts show any great selling panic.

And until they do, both metals are headed lower.

Though there is one bright spot.

Look at the miners –

After losing over 60% of their value, the Market Vectors Gold Miner ETF (NYSE:GDX) did show a burst of volume (in blue).

But will this be just another “premature capitulation” for the gold bugs?

Or is a new gold bull actually being conceived?

Either way, count on GDX leading the pack higher when the bottom is finally put in.

Many happy returns,

Matt McAbby, Senior Analyst, Oakshire Financial

The post Getting In Arse Backwards With Precious Metals (GLD) appeared first on Oakshire Financial.

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The fabled North Slope is home to the two largest oil fields in North America, over 10 other producing fields, and has established industry infrastructure already in place to support exploration, drilling and transportation needs. And, as I noted at the time, U.S. energy policy is increasingly focusing on exploiting the vast untapped known domestic oil reserves that lie within our borders, both to wean ourselves off of foreign oil dependence, and reduce the thorny geo-political problems that go along with it.

When I last wrote about Polar, the company held the rights to a 5,701-acre (8.91-square mile) North Slope onshore parcel called Franklin Bluffs Project, located on Alaska’s prolific North Slope, on which it was beginning to execute an initial exploration and development program. Polar is also involved in the development of the Hemi Springs Project, a 40,698-acre (63.59-square mile) onshore parcel also on Alaska’s North Slope. Both projects are in close proximity to where industry heavyweights Haliburton, Schlumberger, ExxonMobil, ConocoPhillips, BP & Chevron currently have working interests.

At the time I wrote that original piece, POLR was what’s known as a “zero trader”—an over-the-counter issue which has experienced little or no trading volume, similar to an IPO on bigger exchanges. That’s all changed dramatically over the past month, as POLR shares have begun to attract some significant buying interest due to several significant corporate developments.

During the first week of May, Polar announced two noteworthy appointments. On May 1, the company named David Gross to their Advisory Board as Head of Alaskan Exploration. According to the company, Gross worked for Chevron— assigned to the Cook Inlet of Alaska as its Exploration Area Geologist. After evaluating and thinning Chevron’s existing leasehold, he developed and had drilled an exploration prospect on the Kustatan Peninsula.

Five days later, the company named Donald W. Brizzolara to its Advisory Board as Chief Geological Advisor. Brizzolara has 25 years of experience in oil and gas exploration and development geology, and consulting experience for firms such as ConocoPhillips and Shell.

The most likely catalyst, however, for the growing interest in POLR shares lies in an announcement made the same week. That’s when the company issued a release of conclusions from a new Geological Study by Gross and Brizzolara saying the Hemi Springs acreage could represent total recoverable petroleum reserves of approximately 558 million barrels of oil (MMBO). The Hemi Springs Project area is only about one mile south of several producing oil wells in the Prudhoe Bay Unit. It also lies less than a mile west of the all-weather Dalton Highway and is crossed by the Trans-Alaska Pipeline System.

Earlier this week, Polar added fuel to the fire by announcing that it had signed a Letter Of Intent (LOI) to acquire a 100% working interest in 12offshore oil and gas leases (approx. 19,662 acres in total) in Alaska’s prolific North Slope region as of May 20, 2013. The leases are collectively known as the North Point Thomson Project, located about 60 miles east of Prudhoe Bay, North America’s largest oil field, along the northern border of ExxonMobil’s Point Thomson Unit (PTU). The PTU represents an estimated 295 million barrels of oil.

Polar Petroleum Corp.’s President and CEO, Daniel Walker, commented: “The proximity of the North Point Thomson Project couldn’t be overlooked, from bordering ExxonMobil’s Point Thomson Unit, to Rosneft’s interest in that project, the Badami Unit to the immediate west, nearby oil discoveries and significant exploration well results. Alaska’s energy industry is clearly investing in the development of this area, and we’re fortunate to be positioned in the middle of that activity.”

As you can see from POLR’s stock chart below, market participants have been trying to position themselves in Polar shares as well. You can see the small candles at the beginning of May that coincided with the Advisory board and geological study news. The share price rise was rapid, with POLR powering its way up from about $2.00 on April 29, striking an all-time top of $6.25 per share on May 14, with over 1 million shares changing hands that day. In fact, trading volume has been impressive throughout the month of May, weighing in at between 200,000 – 1.3 million shares per session. In recent dealings, shares have consolidated down to the $4.50 level.

When we first profiled POLR, the stock was selling at $2.00; early investors would likely be wise to consider at least securing their profits while the stock is at it’s current level.  This represents an over-100% profitable return… Not bad for a month.

For those not so lucky, remember: While buoyant market conditions may be responsible for some of the enthusiasm surrounding POLR shares, market participants appear to like what they see in Polar’s North Slope prospects. If you too like what you see, keep in mind that POLR has experienced an extremely rapid price run-up, and may need some time to consolidate its recent outsized gains. That said, this is an interesting over-the-counter issue which bears watching over the coming weeks and months.

Good luck with this play and with all your other trades!

Warren Gates, Senior Analyst, Oakshire Financial

The post Revisiting The Alaskan North Shore and Polar Petroleum Corp (POLR) appeared first on Oakshire Financial.

Federal Reserve Chairman, Ben Bernanke, gave a speech on Wednesday morning that announced that there needed to be more signs that the economy is recovering before easing up on their monetary stimulus. He said that the rising cost of unemployment and inflation is still below the Fed’s target rates. Bernanke said, “Monetary policy is providing significant benefits,” following it up with strong consumer spending numbers and higher household wealth income. The Federal Reserve continues to buy $85 billion in Treasury and mortgage bonds each month. Douglas Borthwick, managing director of Chapdelain Foreign Exchange, said “I believe the Fed, while feeling more confident in the economy bottoming, is not yet comfortable with ending QE and the U.S. economic crutch it offers.”

Shares of Saks Inc., owners of the upscale store Saks Fifth Avenue, were skyrocketing on Wednesday morning after news hit that they may be seeking a sale of the company. This came one day after the company reported results that topped analysts expectations. Revenue at stores open at least a year were up 5.9% and the forecast for the rest of the year is between 4% and 6%. It was announced by The New York Post that the company hired Goldman Sachs to “explore strategic alternatives” which does include a possible sale. They have been taking steps to merge physical stores with their online stores. Saks currently owns roughly two-thirds of their stores and the net worth of the real estate alone is estimated to be worth at least $1.5 billion. Shares were trading up over 15% on Wednesday.

All the best,

Jack Aubrey

The post Saks Shares Spike On News Company May Be Seeking Buyers appeared first on Oakshire Financial.

Credit rating firms are considering further downgrades to certain eurozone countries. 

Many countries are still burdened by debt, and credit rating agencies are concerned about the lack of economic growth and the reluctance to seriously attack debt. As a result, there is a possibility that more downgrades could be coming.

The news hasn’t phased the euro in forex trading, though. The 17-nation currency is making headway against the dollar and the pound, both of which have their own problems to contend with. 

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• Latest Forex Trading Software
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The broad based USD weakness was key overnight due to position adjustments ahead of FOMC Chair Bernanke’s congressional testimony tomorrow….

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Founded in 2003 and based in Albuquerque, New Mexico, Homeland Resources Ltd. (HMLA) is an exploration and production company focused on developing relatively low-risk North American oil and natural gas reserves.  The company’s current focus is on the continued exploration and development of its property portfolio comprised of working interests in the Smoky Hill Project (5% interest) and the Liberty Ridge Project (5% interest) in Oklahoma.  Homeland Resources is also seeking to expand its portfolio to include additional interests in North America.

Unlike so many young OTC issues in the energy sector, Homeland already has interests in producing wells. Specifically, the company’s Smoky Hill Production Program in south-central Oklahoma includes three separate prospects—the Marshall, the Bradley and the Patton. The first wells in all three prospects, the Marshall-1, the Bradley-1, and the Patton-1, are production wells already generating monthly revenues for the company.

According to Homeland management, as of December 31, 2012, the wells had produced a gross cumulative 158,034 bbls of oil and 37,591 Mcf of natural gas. Based on 3D seismic, project geologists previously estimated a potential 625,000 bbls of oil to be developed at the three Smoky Hill target locations.

Recently, however, it’s the company’s other Oklahoma drilling location, Liberty Ridge, that’s been making headlines. At the end of April Homeland outlined its proposed Phase 1 Liberty Ridge drilling program. The company said that it and its partners have isolated eight initial prospects that will represent Phase-1 of the Liberty Ridge drilling program. These prospects are the first of many new wells planned to be drilled at the project over the next several months. All eight prospects in Phase-1 have been sufficiently analyzed and determined to be high-grade targets. 

“The planned Phase-1 of the Liberty Ridge drill program consists of new wells targeting eight high graded prospects selected from the previously announced and confirmed 34 prospects identified at the project so far,” said Armando Garcia, President of Homeland Resources. ”These first eight prospects were determined utilizing the project’s proprietary 3D seismic database that covers the entire 83,043 acres or 130 square miles that make up the Liberty Ridge area.”

Expectations are quite high for Liberty Ridge, as historically oilfields in the project area have produced from 1 million – 13 million barrels of oil.  The exploration and development objectives at Liberty Ridge consist of drilling potential new multi-zone wells targeting 2nd Wilcox sand, 1st Wilcox sand, Trenton dolomite, Simpson dolomite, Viola limestone, Hunton limestone, Bartlesville sand and Redfork sand oilfields.

Two weeks after the drilling plan was announced, Homeland reported that they, in conjunction with their partners, were about to spud the first well at Liberty Ridge. The projected depth of the initial Liberty Ridge well is targeted for 5,650 ft. The well site was selected based on positive indications and analytics from a proprietary 3-D seismic survey conducted by the operating partner. Anticipated time to reach that well depth is three weeks.

“This is a great day for Homeland Resources and its many patient shareholders as we begin the next step to unlocking the great potential of the Liberty Ridge Project,” said Armando Garcia, President of Homeland Resources. “Based on our assessment of the project, we are optimistic that we should receive positive results from this first well, and will continue to have high expectations for the entire Liberty Ridge Project, insofar as we think that it could have significant economic impact on our Company in 2013.”

The drilling dates for the remaining four prospects in Phase-1 will be announced when confirmed by Homeland’s operating partner. Drilling for Phase-1 is expected to potentially take several months, after which point Homeland and their partners will outline details for Phase-2. Drilling at Liberty Ridge for Homeland and their partners is expected to take place from 2013 through 2014.

All of the positive news flow from Liberty Ridge has lit a fire under the shares of Homeland Resources. Trading volume picked up noticeably over the past five sessions, with a minimum of 400,000 share changing hands, dwarfing the most recent 3-month daily average of about 90,000 shares.

By the middle of last week, HMLA had lifted to a new 52-week high of $0.27 per share. From that point, profit-taking set in, with the shares closing at $0.21 in recent dealings.

It’s not unusual to see these kind of price swings in OTC issues, especially given that HMLA shares hadn’t touched $0.23 at any point over the past two years, and long-suffering shareholders may have taken the opportunity to cash out. If buying interest continues, however, along with positive company drilling results, I would first look for that $0.23 resistance point to be re-taken on high volume as a signal that shares may once again be ready to make their way up to, and through their new $0.27 zenith.

As always, do your own due diligence, trade carefully and good luck!

Warren Gates, Analyst, Oakshire Financial

The post Turning the Corner With Homeland Resources (HMLA) appeared first on Oakshire Financial.

General Electric reported that they will be receiving $6.5 billion in dividends from the finance portion of the company. This is one of the first steps since the GE has begun to work on shrinking the GE Capital finance sector of the company. The payments will come in the form of $2 billion in earnings dividends and $4.5 billion in special dividends. GE did pay first-quarter dividends in April of $445 million. Jeffrey Immelt, chief executive officer, said “This announcement is consistent with our goal to reduce the overall size of GE Capital and for it to return significant cash to GE.”

AOL announced that they would begin another round of layoffs at Patch, a firm the company purchased, in an attempt to strengthen their bottom line. The layoffs will include nearly 40 employees from a total staff of around 140. This will directly result in shrinking the current total of 20 offices down to 9. AOL acquired Patch.com in 2007 and has since been trying to make the move profitable. AOL put $50 million into Patch after their split with Time Warner. They are hoping the downsizing efforts will help make Patch.com more profitable.

Campbell Soup Co. announced that soup sales rose 14% in the most recent quarter. This is the largest quarterly gain for the company in over five years. Campbell raised their full-year outlook on earnings. In the fiscal third-quarter, which closed on April 28,  the company announced a profit of $181 million, or 57 cents per share, which is compared with last years $177 million, or 55 cents per share. Sales were up 15% to $2.09 billion. The large sales jump was helped by the company acquisition of Bolthouse Farms, which contributed 11% of the growth total. They raised their full-year earnings estimate to $2.58 to $2.62 per share.

That’s all for the day.

All the best,
Jack Aubrey

The post GE Capital Announces Billions In Dividends appeared first on Oakshire Financial.

Euro is firming today, gaining ground against the US dollar as policymakers insist that the eurozone will remain intact. 

There are risks to the eurozone, however. The International Monetary Fund insists that Cyprus is going to need more bailout support from the rest of the EU.

Additionally, there remains difference in opinion between Germany and France as to how to proceed. Germany is insisting that France get some of its budget issues under control.

Even with all of this difficulty, though, EU policymakers insist, ahead of an upcoming meeting, that the eurozone will be preserved — at all costs. 

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The post Euro Firms, Even as Concerns Arise in the Eurozone appeared first on Oakshire Financial.

The bullish news comes to us by way of the Kitco website, where we’re seeing the beginnings of a shift in sentiment.

Remember, Kitco is one of a handful of die-hard, gold cheerleading websites, where the most bully of the gold-bullish go to find succour and commiserate in a sort of internet-based transcendental meditation cult for gold bugs the world over.

So what does a perusal of the lineup on that site reveal?

First, that the bulls have lost something of their hardheadedness.

There are some who will never capitulate, to be sure. But even among the staunchest old-time gold and silver peddlers, we’ve noticed something of a shift toward a more neutral stance on gold’s prospects, if not an outright negative one.

Buy or Die?

The Kitco site, of course, allows for sell recommendations on gold. It’s just that any such advice would be tantamount to self-imposed exile to a Bengali leper colony.

Bad words are simply not spoken about this commodity that’s lost nearly 30% of its value over a 20 month period. Only talk of when the inevitable bottom will arrive and just how far and how fast the PMs will climb thereafter (once the baddies are outed), is permitted.

Call it a sort of golden political correctness.

In any event, we’re encouraged by the sound of the badmouthing we found there from some otherwise notorious bulls.

Here’s a quick sampling of the headlines –

Stocks Soar, Metals Lag

Further Declines in Gold

The Problem with Gold

Silver Finds Short-Term Support,

But Some See Big Picture As Down

Gold Prices to retest $1350/oz

When Will the Gold Bull Resume?

You can call it anecdotal, throwaway proof of nothing, but we haven’t witnessed anything like it for close to a decade. Go and look for yourself.

The skinny is – things are starting to turn. Keep your powder dry.

Technical Proof

We’re also encouraged by what we see from the technicals – more from silver than gold, and more an emerging picture than one that’s already clear – but one that does point toward a bottom.

Here’s a look at the weekly chart for SLV, the iShares Silver Trust ETF, a stock whose career has been downright gruesome relative to her big sister, GLD. SLV has lost 55% in 24 months. Please pay especial attention to her RSI reading.

As you can see from the weekly RSI (in red, at bottom), we’re now very close to achieving an oversold print for silver. We note, too, that this is the second such venture into the RSI 20 neighborhood in the last two months.

The first was registered when SLV broke below long term support just below $26 (upper blue line, at top). And the second is now upon us, with the five week support line crumbling just last week (lower blue line)

Our feeling is that a dip below RSI 20 is now an inevitability on the weekly chart, and because it will have been the second such ‘attempt’ at oversold, as it were, we believe it will be the last.

Warning! Danger! Sirens! Warning!

Dear reader – please don’t take this as a call to begin purchasing SLV shares or anything even remotely related. On the contrary, an oversold read from the weekly RSI could yet be anywhere between two and twelve weeks away, and though we believe it will come sooner rather than later, we’re not committing to any time frame. We’ll let the charts speak for themselves. And when we’re convinced a bottom has been put in, we’ll say so.

Be warned, too, all who believe they can front-run the technicals, that silver may yet fall another 25% from these levels. Please do not be in a rush. When the capitulation is upon us, the ensuing price decline could be momentous. Wait for it. Look for a volume spike (blue box), and don’t get caught jumping in while the momentum is still on the downside.

Just before we leave it, please now have a brief gander at the daily SLV chart.

Two items bear discussion here. First, the momentum is clearly down on the daily chart. The slide below support has yet to be resolved on a volume basis and certainly by way of an oversold RSI reading (red box). Both of these items, we feel, are still in SLV’s future. All that remains is to see how far the stock will fall before those two triggers are hit.

The second item we’re following is the distance between SLV’s current price and her major moving averages, which remain clumped some 35% above last Friday’s close (blue oval at top). This is a situation that’s begging for a remedy, and whether the relief comes now (and leads to further price declines later), or SLV goes into the dumper now (before recovering), we’ll have to just stand by and see.

In Short –

Silver direction – down.

Duration of decline – as long as it takes.

Your Trade For the Week

We’re going to close with a recommendation that’s unrelated to gold and silver, although we do want to encourage those who have been out of the PM pool to get their bathing trunks ready and start heading to the change room. It’s been a while since we had a dip, and the water is beginning to warm again.

Our trade for the week is based on a smell that’s arisen in the last few days that we feel might turn into a something of a stink before long, so we’re taking some money off the table in preparation. Why let good money go stinky, after all.

On the first of April, in Now Everyone is a Speculator, we recommended you purchase a deep-in-the-money CALL on the S&P 500. The action since then has been almost perfectly straight up, and we’re just a tad worried.

The bull is on. All systems are go. Nothing great to be concerned about.

We just have an inkling, an itching, based on nothing but our experience and feel, that we should close the position.

Wall Street Elite recommends you close your SPY December (2015) 90 CALLS at the market (now trading for $77.16). That’s a profit of 15% in just seven weeks.

With kind regards,

Hugh L. O’Haynew, Senior Analyst, Oakshire Financial

The post Hope For The Precious Metals Close The SPY appeared first on Oakshire Financial.

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Before getting into the specifics of what seems to be driving NORX’s price north, let me briefly refresh your memory about the company. At the beginning of April, Norstra announced that it had entered into a farm-out agreement with Summit West Oil, LLC. for the South Sun River Bakken Prospect, a 10,000 acre tract, with most leases extending for 10 years.

Under the terms of the agreement, Norstra is providing $200,000 for short term working capital with the goal of completing a first well into the Bakken Oil Formation by December 31, 2013. After that, the company will finish a minimum of two more wells by the end of 2014. If Norstra completes the first three wells on target, it will retain a 100% working interest in the entire farm out acreage.  If the company doesn’t complete all three wells by the end of 2014, it will only retain interests in the completed wells.

One week after I profiled Norstra in mid-April, the company announced that its management and technical team had met with its South Sun River Project operator to review current operations and establish detailed guidelines for a planned drilling program. Norstra currently has over 14 miles of seismic lines ordered from QEP Resources and PacSeis. It is expected that the reprocessed seismic data will be in place at some point in May or early June. Once the review of the seismic lines is complete, the company’s geophysical consultant will reinterpret the data, prepare a geophysical presentation to management and suggest the first drill locations.

Significantly, Norstra also announced that preliminary review of the seismic suggests an abundance of thrust sheets in the area. As a result, Norstra requested additional acreage from Summit West Oil where the blocks have been noted from the preliminary review, and Summit West agreed to add 2 full sections (1,280 acres) to the project based on the same terms as the original Farmout Agreement. This brings the total prospect size to over 11,300 acres.

“Adding the additional acreage at this point is a very important step for Norstra to ensure that we give the company and our investors the best possible opportunity to drill the first wells on our lands,” said Glenn Landry, Norstra’s CEO. “We were always planning to increase our land position over time, and after reviewing the first technical data during the operational meetings, we decided to accelerate that process. Everybody is looking forward to getting the surface casing set for the first test.”

Last week, more good news came from an unexpected source—the U.S. Geological Survey (USGS). The USGS announced that they were doubling the reserve estimate for the Bakken and Three Forks Formation in Montana, North- and South Dakota. The USGS stated that the formations could contain an “estimated 7.4 billion barrels of undiscovered, technically recoverable oil.” That’s double the original 2008 estimate of 3.65 billion barrels. The USGS also considers Bakken and Three Forks to be the largest continuous oil formations in the continental United States. This is the same oil formation that Norstra is targeting on their lease holdings.

In fact, several geologists have commented that the USGS reserve estimate numbers are probably conservative. John Harju, associate director for research with the Energy and Environmental Research Center at the University of North Dakota, said he views the USGS figure as the lower limit of the amount of oil that will be recoverable from the Williston Basin. Dr. Don Van Nieuwenhuise, the University of Houston’s geosciences department, said the USGS numbers are conservative and based on looking at “sweet spots” within the formation. “

Adding fuel to the fire, Continental Resources, the largest leaseholder in the Bakken region, believes the USGS estimate to be quite modest. “The USGS generally is very conservative in their estimates,” Harold Hamm, Chairman and CEO of Continental. In 2010, the company estimated that the Bakken field contains roughly 24 billion barrels of technically recoverable oil—about 3x the new USGS figure— out of 577 billion barrels of total oil in place. In 2012, Continental boosted its total oil estimate by 56 percent, to 903 BBO, but has yet to revise its recoverable estimates.

These latest developments related to Norstra’s Bakken claims have been greeted by market participants with enthusiasm. In very much the same way NORX shares were grinding their way higher in April, they have continued to uptrend on solid volume. During 21 of the last 26 trading sessions, volume has exceeded the 600,000 share level—quite notable for a relatively unknown over-the-counter issue. Equally significant from a trading trend perspective, shares have lifted about 15% during the one-month period stretching from April 15 – May 17. The rise has been relatively steady, punctuated by one significant pull back to $0.66, but the uptrend resumed from there.

As I noted in my first story, although Norstra is still in its very early stages of development, the company is prospecting in an oil-rice with proven reserves only a short distance from where it will drill its first well, and where several large multinational energy companies are already in active production. In April NORX defied a significant fall in oil prices and continued to challenge its then 52-week top of $0.57. If good news continues to flow from the company as it pursues the oil riches of the Bakken Shale, and the price of crude continues to hover within striking distance of the $100 per barrel mark, NORX’s current share price could continue to capture higher all-time highs.

Good luck with this and all of your trades!

Warren Gates, Senior Analyst, Oakshire Financial

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