I have staff around the world constantly monitoring Internet chat rooms in a search of early movers. If they find something interesting, I make a few calls to see how real it is. After all, the Internet is 99% garbage, and 1% inspiration. That’s how I found Houston based independent exploration company Harvest Natural Resources (HNR)
HNR has a nice little business developing fields in Venezuela, Gabon, Oman, Indonesia, and China, for which it receives payments from local governments. It recently bought into the Antelope Field in the Duchesne Basin in Northwest Utah, which almost immediately hit a gusher. This one well is thought to be worth more than the rest of the company’s entire operations, implying there is a latent double in the stock. Although the grizzled veterans with oil stains permanently under their fingernails I talk to have known about this field’s potential for years, it is little known outside the industry or in the stock market.
Sure, I know you’ve heard this one before. But the company stands up on its own, even if the Utah angle turns out to be a fairy tale. The company has no debt, and fits in nicely with my own long-term view that oil assets of every description, from the majors to the indies, pipeline companies, and service companies, will do well over the long term. The only way I could be wrong is if Ben Bernanke figures out how to create a new barrel of oil with a printing press.
This one might be worth a punt. At the current share price you can buy the company for its existing business and get the Antelope field for free.
By. Mad Hedge Fund Trader