Monday, April 04, 2005

Is that a really big truck on your front page, or are you just happy to sell me oil sands?

Nice article on oil sands in Globe and Mail titled "The Athabasca oil sands story".

Served with a side of Raging Oil Bull:

Can the strength in natural resources last? Absolutely, insists raging oil bull Kenneth Heebner, who had three of his four Capital Growth Management funds among the quarter's top 100 funds. Energy investments helped drive the $1.1 billion CGM Focus fund up 10.1%. The case for continued gains: "Demand growth in China isn't slowing down," Heebner says, "and there's accelerating demand from India and other parts of Asia." Leigh Goehring, whose $655 million Jennison Natural Resources (PRGWX ) fund rose 9.8%, is also gung ho on energy. His 65% weighting in oil is the highest it has been in his 13 years at the fund.

While Heebner's top holdings include large caps such as Amerada Hess (AHC ), Goehring focuses on companies with projects in the Canadian oil sands. There, the high-cost process of extracting bitumen out of oil sands has become more economical as oil prices have risen. His favorite pick in the sector is Opti Canada. (His fund was a backer of the company when it was private.) He also likes Canada's Suncor Energy (SU ). "Companies with access to long-lived, robust reserves will be the winners," says Goehring. "For practical purposes there are unlimited reserves in the oil sands, and these companies are still cheap."

Quote from article linked above.