It has been a rough couple weeks for Oil & Gas explorers, and Jacka Resources was no exception. The stock price was punished last week, against all logic – given that Jacka have:

• Received ministerial approval for the Ruhuhu block in Tanzania (Jacka will be Operator with 100%) and
• Just commenced the much anticipated drilling of their large appraisal well in Tunisia (contingent resources in excess of 100 million barrels), with results expected in the next few weeks.

This recent market carnage has thrown up an excellent opportunity for investors (and traders), because when a stock with upcoming drilling results has been so oversold in a terrible market… you can be sure that investors will be piling back in once the market settles down, their fear is replaced by greed and their sudden realisation that drilling results are just around the corner!

The team at The Next Oil Rush were so perplexed by the Jacka stock price that we did some investigation to find out what on earth is going on – and we are confident that there may be a bounce back in the very near term – and here is why:

First of all, what happened with the stock price? Fear and a (rumoured) forced institutional seller

The shocking bloodbath across the junior sector last week may explain the Jacka stock price weakness, with rumours of a forced institutional seller exasperating the situation. Some participants in the December options underwriting (who got in at 20c) probably started freaking out when they saw the price suddenly falling, further adding to the selling pressure.

This perfect storm of carnage resulted in a 30% drop last week, on relatively small volume. We note that the drop in stock price was nothing to do with any negative material event announced by the company.

But storms do pass. We are expecting a significant bounce back by Jacka in the coming weeks (possibly a trading opportunity here) leading up to the drilling results. On a positive note, we also hear rumours that the forced institutional seller has finally offloaded all their stock as of a few days ago, which if true would remove a significant amount of pressure on the stock price. We may even see a few of the trigger happy sellers from last week sheepishly buying back in once they have cooled their heads and got their nerve back.

How many times has fear caused you to sell out of a stock on a bad week, only to regret it a few weeks later when everything is back to normal? Take the advice of Warren Buffet:

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.”

The small cap explorer market was certainly fearful last week – especially with Jacka. Hopefully you took advantage of the fear… so what is going to change the market back to being greedy…?

Why should Jacka bounce back in the near term – Drilling, Drilling, Drilling!

Everyone loves a good drilling result, and with Jacka’s much anticipated Hammamet-3 appraisal well in Tunisia having started drilling last week, we are only a few weeks away from knowing the result and potentially only days away from hearing about initial oil shows (finger crossed). Jacka have promised drilling updates EVERY WEDNESDAY – we are hoping for early oil shows in the drilling results which is always well received by the market.

How many times have you seen an oil explorer’s stock price rise in the weeks leading up to drilling results? We believe Jacka will be no exception, and starting from such a heavily oversold position should prove for a very interesting few weeks, especially with their promised weekly updates.

Conclusion

The weakness in the share price over the last few weeks has thrown up some amazing opportunities.

The Jacka value proposition is still as strong as ever (take a look at our original Jacka article here for a reminder) and we are still extremely bullish for the longer term.  The stock is currently heavily oversold and trading well below its fair value, so could be a nice trade for those with a short term view (however, always remember the risks when drilling!), or an excellent entry point for those who are happy to stay for the longer term (like us).

We are confident the price will be bouncing back in the near term, especially with rumours of the forced institutional seller finishing their offload, and lead up to drilling results – The Next Oil Rush will be watching with great interest over the next few weeks.

The team at The Next Oil Rush has been busy launching our new Mining Focused website – The Next Mining Boom. We have just published an article about an up and coming gold explorer that we are very excited about, you can view the full article here (free and no subscription required, as always):

www.nextminingboom.com/index.php/lead-geologist-quits-mining-super-major-to-start-own-company-after-uncovering-once-in-a-lifetime-gold-project/?utm_source=NORML

Hopefully this company will give us some short term joy in an otherwise dreadful junior explorer market….

It’s been a shocking week in the junior resources sector – small cap resource companies stock prices have been punished across the board, and sabre rattling and general postulating by Kim Jong Un probably hasn’t helped much either, with the Next Oil Rush Stock Portfolio not able to escape the small cap carnage.

Portfolio Updates:

Elk – (ASX:ELK) Elk continues to tick all the boxes on its way to producing oil from its flagship project, with CO2 injection at Grieve underway and all going smoothly. Construction of chemical mixing facilities on Elk’s other project (Ash Creek) is nearing completion, and should be ready to start EOR activities this month, and we are very excited about the expected news flow for ELK in the coming months. Remember that Elk is the only ASX listed company employing EOR – check out this article for more a great summary on EOR

Jacka – (ASX:JKA) Jacka is expected to spud its long awaited Hammamet West-3 well (in Tunisia) in the coming days, after experiencing a couple of months delays due to the contracted drilling rig being held up on its previous project (typical contractors.. always late!). Jacka also recently announced an aggressive work program for its mutli-billion barrel target in Somaliland (with Tony Haywards Genel Energy), which is scheduled to spud in early 2014. Aside from also announcing ministerial approval for its Tanzanian “Ruhuhu” license, Jacka is making a lot of progress on all fronts which should be reflected in share price in the coming months. For our original write up on Jacka, click here

Africa Oil – (TSX:AOI) Africa Oil is cashed up after raising over $CAD 230 Million, and with partner Tullow Oil, has started to aggressively accelerate its drilling program in Kenya and Ethiopia, with government approval to conduct exploration and evaluation concurrently, to fast track proving commercial viability of its existing discoveries, while still exploring for new oil. All eyes are on the coming results from the Sabisa well in Ethiopia, which if successful, will open up a potentially HUGE new basin. Results expected any day now…

Swala – the Swala IPO is currently scheduled for Friday April 12^th, and will be listing under code SWE – we are watching with great interest.

Hopefully the junior Oil & Gas explorers market will pick up in the next few weeks, to coincide with the expected news flow from Elk, Jacka and AOI, and while we are waiting for that, make sure to take a look at nextminingboom.com and our new article:

www.nextminingboom.com/index.php/lead-geologist-quits-mining-super-major-to-start-own-company-after-uncovering-once-in-a-lifetime-gold-project/?utm_source=NORML

Good Luck with your investments

The Next Oil Rush

It’s been almost a month since we first wrote on Elk Petroleum and the guys over at Elk’s Grieve project have been busy, putting the processes in place to deliver oil (and dollars) in to Elk’s bank accounts and therefore shareholders hands in 2014.

One of the most significant announcements in a long time for Elk is that CO2 injection has commenced at Elk’s flagship Enhanced Oil Recovery (EOR) Grieve project in Wyoming, USA. Investors have been waiting patiently for years for this date, so it is a cause to celebrate and great for those that got in to Elk shares recently.

So, what exactly does this mean?

Well, Elk’s MD Bob Cook says it best in the actual announcement found here:

‘Today is the starting point for the recovery of a significant quantity of Grieve Crude oil’

Did you read our Enhanced Oil Recovery 101 in our original Elk article? And how Elk is chasing new EOR opportunities  in the good ol’ USA? AND has a joint venture with $7 billion goliath in the EOR game, Denbury Resources?

If not, here’s the link again:

To see how it all works have a look at a video on EOR using CO2 injection and what Elk is aiming to achieve:

Denbury’s plan of development for Grieve released

Denbury Resources (Elk’s JV partner, 65% owner of the Grieve field and the one spending all the money to get the Grieve field into production) recently released its 2013 plan of development for Grieve.

This document spells out how Denbury is planning to undertake the re-pressuring of the reservoir and that that they are committed to spending big dollars to get into production at Grieve. The full Denbury document is confirmation of releases Elk have putting out but in somewhat more detail and comes from the majority owner/operator of the field. Read more…

That’s right, you heard correctly – this junior company WILL NOT fail to find oil. A bold statement you say? Well read on to find out how this is possible…

Are you sick of oil exploration companies you are invested in spending millions of dollars drilling high risk holes that turn out to be empty? Tired of anticipating huge discoveries and massive share price returns, only to be slapped in the face with a dismal drilling result, while the share price plummets and your money disappears before your eyes?… AGAIN!

Wait until you hear about this company. How can they possibly guarantee oil? I thought all small cap oil investing was supposed to be high risk?

At The Next Oil Rush we are always on the lookout for the next big thing, or trying to uncover a hidden gem, and we think we have found a junior oil company that is going to rock the foundations of traditional small cap oil investing in Australia, by using a little known technique to extract EXISTING oil reserves from abandoned fields… oil that was previously considered un-extractable… you won’t believe how much oil is generally left in place after an oil field is abandoned.

It’s a well known fact that when an oil discovery is made, the “easy” oil is extracted using natural pressure in the oil field and maybe pumps.   When the pressure drops and the pumps stop producing oil, the field is abandoned… right?

Take a guess at the percentage of oil that is usually left behind in an oil field because it cannot be extracted using traditional technology (natural pressure and pumps). Is it 15 percent? 30 percent? The answer will be revealed later in the article, and you won’t believe it.

This junior company we have found is snapping up abandoned oil fields in the good ol’ US of A, and they plan to use “Enhanced Oil Recovery” (EOR) technology (also known as tertiary recovery technology) to squeeze out almost as much oil as was originally extracted from the fields before they were abandoned!

I can just imagine the previous owners of the oil fields openly sobbing and rocking back and forth in the fetal position after they find out how much oil is being extracted from the “depleted” fields they gave away for peanuts.

On top of all this, this $40 million company has caught the attention of a $7 billion US goliath of Enhanced Oil Recovery. Our company has inked deals that will allow them to sit back while this EOR goliath uses all of its expertise and does all the work, but more on this later. Read more…

Happy New Year!

We’ve been very busy over the last few weeks at NextOilRush and are looking forward to an exciting 2013, and hope to launch our shiny new website soon.

Jacka Resources (ASX:JKA) is trading strongly and we are looking forward to expected news flow around commencement of this months drilling in Tunisia and also government approvals for new permits in Tanzania.

We have also been researching an exciting small cap oil play called Elk Petroleum (ASX:ELK).

Elk Petroleum employs EOR (Enhanced Oil Recovery) techniques that utilise proven technologies to extend the life of otherwise depleted oil reservoirs. EOR is very big in the USA right now, and accounts for over 10% of US production, Elk is currently the only company listed on the ASX that is employing this technology… we’ll tell you more soon.

We look forward to publishing a full article on Elk Petroleum in the next week or so.

Remember – you heard it here first!

Wishing everyone a Happy and Prosperous 2013.