Everyone buys lotto tickets in the slim hope that by some miracle they can win it big. The truth of the matter is, it’s just as likely that your lotto ticket will turn into a Unicorn and give you a high five than it is to make you a winner.
Why spend that $2 a week when you can find a couple of micro cap stocks that have the potential to make you a big winner? I have two micro caps with the potential of finding billions, YES BILLIONS of barrels of oil. Let’s take a look:
This first one I’ve mentioned before: CGX Energy (CVE:OYL). They are exploring offshore Guyana, which is widely believed to hold similar oil resevoirs as offshore West Africa, since back when all of the continents were one, Guyana and West Africa were connected. Although, they’ve had their share of trouble – they drilled one duster and their second well (Jaguar 1) had to be stopped early due to safety concerns around high pressure – but there were good shows of oil. CGX collapsed on the news of the Jaguar well as funding concerns crept up. CGX is 35% owned by Pacific Rubialas, and has Repsol as its partner on the Jaguar well, so I think the funding will come and they will reassess the Jaguar well and re-attempt to drill that play in 2013. This play is big, and could hold well over 1 billion barrels of oil which would propel CGX stock into the $5-10 range from .25.
The second pick is Horn Petroleum (CVE:HRN). They are also chasing billions of barrels, but this one is in Somalia. Similar to CGX, Horn believes that they can find billions of barrels as they believe the trend from oil rich Yemen extends into Somalia. They recently drilled a duster and their stock price collapsed to .37, but they are still in early stages of exploration. Similar to CGX, Horn has big name backers as African Oil own 60% and they have the financial backing of the first family of resource, The Lundin family. Again if they can hit a big find they too can be propelled to the $5-10 range.
Horn and CGX have:
1) A geological trend with proven large hydrocarbon pools
2) Big name backers (so buy outs are also a possibilty for both)
3) The Monkey’s and Elephants stamp of approval
Again, as positive as these picks look they are still exploration plays and require financing to drill wells as they have no production to generate cashflow. So please keep an appropriate weighting for a high risk/high reward play.