www.NaturalGasStocks.com (NGS), a global investor website for the natural gas sector, is pleased to offer an updated exclusive commentary on energy stocks: "Going With What Works: Another Energy Stock With Solid Insider Buying”. The article is part of the ongoing "Insiders Corner” column, by well-known financial writer and author Michael Brush. Mr. Brush also writes a weekly market column for CNBC on MSN Money. Mr. Brush has covered business and investing for the New York Times, Money magazine and the Economist Group.

[ClickPress, Thu Feb 24 2005] POINT ROBERTS, WA. February 24, 2005 - www.NaturalGasStocks.com (NGS), a global investor website for the natural gas sector, is pleased to offer an updated exclusive commentary on energy stocks: "Going With What Works: Another Energy Stock With Solid Insider Buying”. The article is part of the ongoing "Insiders Corner” column, by well-known financial writer and author Michael Brush. Mr. Brush also writes a weekly market column for CNBC on MSN Money. Mr. Brush has covered business and investing for the New York Times, Money magazine and the Economist Group.

NaturalGasStocks.com is a portal under the InvestorIdeas.com umbrella. The NGS site does not make recommendations, but offers a unique information portal to investors to explore news, articles, and recent research.

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Date: March 16, 2005
Keynote Speakers: Neal Dingmann, M.S. Howells & Co., Energy Analyst, Prabhas (PR) Panigrahi, EKN - Managing Director of Research
Format: Audio and Power Point Presentations

NaturalGasStocks.com includes a growing list of public companies in the sector. For our list of companies involved in natural gas, click here:

This Weeks Feature:
Going With What Works: Another Energy Stock With Solid Insider Buying
By Michael Brush

Small-cap energy companies whose insiders are snapping up shares have been an excellent place to pick up phenomenal returns. Since it usually pays to go with what’s working, let’s take a look at another one that looks like a buy because of recent insider activity: Tri-Valley (TIV).

Before we get to the details on this stock, which I think could triple or more in a year or two, let’s take on the skeptics who might make the following challenge. “Yes, energy stocks where insiders are buying have done well, but they’ve only gone up because energy overall has been a top performing sector this year.”

They are right about the first part. But they’re wrong on the second, because small energy companies where insiders are buying have done way better than most other energy stocks. For some evidence, let’s look at the four energy stocks in my Jan. 14 Insider’s Corner column. (For Insider’s Corner headlines, click here: http://investorideas.com/insiderscorner/.

Two of those stocks, Goodrich Petroleum (GDP) and Infinity (IFNY), are up an impressive 54% in the five weeks since that column ran. Another, PetroQuest Energy (PQUE) is up 43%. Even the worst performing stock from that column, Chesapeake Energy (CHK), has gained 22%.
In other words, all of them have simply trounced the iShares S&P Global Energy Sector exchange traded fund (ICX), which advanced 14% in the same time frame.

Another great example: Parker Drilling (PKD), the very first stock I introduced in Insider’s Corner last Nov. 30. In the three months since then, it’s up 27%, compared to gains of just 7.9% for the iShares S&P Global Energy Sector exchange traded fund in the same time frame.
Now here’s a closer look at Tri-Valley, another one that should outpace the energy sector overall.


Tri-Valley is a Bakersfield, California-based energy company with lots of moving parts, including a minerals division that will get spun out to shareholders at some point soon. But let’s just focus on what looks like the most interesting piece: the company’s natural gas fields in and around Bakersfield.

Here’s the bottom line: A report last summer by Charles Strain and Associates, a reputable energy sector analyst, put the net asset value (NAV) of Tri-Valley’s Bakersfield projects at $47.46 per share. The stock recently traded at around $13.

NAV is derived by discounting back the value of future production, to understand what the projects are worth in the present. The Charles Strain report uses conservative assumptions, including a $25 per barrel price of oil. Oil recently traded for twice that amount. Sure, mistakes and surprises can happen along the way. But basically it looks like Tri-Valley is still trading way below where it should be, despite the recent breakout from the $10 trading range for the stock.

The Charles Strain report looks at what Tri-Valley might produce going down to depths of 12,000 feet in the Bakersfield area. But Tri-Valley says reserves actually reach down as far as 45,000 feet, and it may be possible to produce well into those depths. This isn’t clear, because structures are different in California than anywhere else where production has occurred so deep. “So this is pioneering effort,” says chief executive F. Lynn Blystone. “But if we are successful, we will in effect open up the third century of the oil business in California.”

Recent insider activity suggests the valuation work by Charles Strain is on target and the stock will be moving higher. A Tri-Valley director purchased $208,000 worth of stock for $8.40 in early January, according to Thomson Financial.

Directors also exercised 570,000 shares in options, at prices of 50 cents to $2.43 since early December. But more importantly, they did not sell the shares. What does this mean? It suggests they see much bigger gains ahead for the stock, and they wanted to realize the tax effect of exercising options now, before the stock gains play out. In short, it’s a bullish sign.

Bottom line: I already own shares, but I’d buy more right now and hold for a triple in a year or two.

At the time of publication, Michael Brush owned shares of Tri-Valley.
Disclaimer: http://www.naturalgasstocks.com/insiderscorner/Disclaimer.asp

Previous Insiders Corner Energy Stocks Feature: Insider Money Says the Rally’s Not over For These Four Natural Gas Plays
Featured Public Companies: (NGS is compensated for featured company profiles)

Avalon Gold Corporation (OTCBB: AVGC) has an undivided 85% working interest in a giant gas field lease in the prolific natural gas producing Uinta Basin, located in the US Rockies, Utah. The lease comprises 13,189 acres with a potential 4 TCF recoverable gas and is overpressured by a 0.55 – 0.85 gradient. Avalon states that its Uinta Basin Prospect has the potential of being a Giant Gas Field similar to the Drunkards Wash Field and the Jonah Field, both recognized gas fields. The Drunkards Wash Field, just south of Avalon's prospect area, is estimated to be between 2-4 TCF of recoverable gas. The Jonah Field Overpressured Gas Plain, which is analogous to the Company's prospect area, has similar overpressuring, depth, reservoir rocks and is estimated to be 2.5+ TCF. http://www.avalongold.ws/

Heartland Oil & Gas Corp (OTCBB: HOGC) Heartland is developing approximately 915,000 acres of coal bed methane lands in the Forest City Basin (FCB) in the state of Kansas, USA. Using an 80 acre spacing the acreage is expected to provide approximately 10,000 drill locations. The company currently has 89 wells, in eight pilots including 55 CBM wells that are currently dewatering and/or venting gas, 26 CBM wells awaiting stimulation and 8 saltwater disposal wells. Heartland's recent acquisition of Evergreen Resources' FCB assets and $44.5 Million financing provide for long term growth. http://www.heartlandoilandgas.com/

Petrol Oil and Gas, Inc. (OTCBB: POIG), is producing oil, gas, and Coal Bed Methane at properties in Eastern Kansas and Western Missouri. Recently, the Company acquired 71 CBM producing wells in Southeast Kansas on 10,000 acres flowing about 3,000 Mcf per day. The new property has the potential for another 100 drillable sites, and the Company plans to utilize cash flow generated from this project to fund the aggressive drilling program currently underway. http://www.petroloilandgas.com/

Silver Star Energy, Inc. (OTCBB: SVSE), is committed to the exploration and development of oil and natural gas reserves throughout western North America. Company management is focused on an acquisition program targeting high quality, low risk prospects provided via key strategic partnerships. The Company has its first producing gas well being tied-in to pipeline in California, and excellent prospects both there and in Alberta. http://www.silverstarenergy.com/

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InvestorIdeas.com Disclaimer: www.InvestorIdeas.com/About/Disclaimer.asp, InvestorIdeas is not affiliated or compensated by the companies mentioned in this article. Michael Brush is a freelance writer.

Disclaimer: ECON is a privately owned corporate communications company specializing in: media relations, investor relations, and research on public companies and industry sectors, for the investment community. Nothing on our sites should be construed as an offer or solicitation to buy or sell any specific products or securities. All investments involve risk. Past performance does not guarantee future results, therefore investigate before you invest! Although we attempt to research thoroughly, we offer no guarantees as to the accuracy of any information presented. We encourage all investors to use our sites only as a resource to further their own research. The site is compensated by its "Featured Companies," as outlined in our on-line disclaimer at www.InvestorIdeas.com/About/Disclaimer.asp. It's featured companies, Avalon Gold Corporation: Four thousand dollars per month. Third party IR firm. Heartland Oil and Gas Corp.: Two thousand dollars per month, plus ten thousand options at three dollars and fifty cents. Petrol Oil and Gas, Inc.: Four thousand dollars per month, plus six thousand dollars per month in one forty-four shares. Silver Star Energy, Inc.: Three thousand dollars per month. Disclaimer: http://investorideas.com/About/

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