Ithaca Energy on a North Sea Odyssey

Nov 1st, 2010 – Comment

I would let this horse run and see if it can break through $2.40. The real kicker will be the success of their activities in the Athena field in Q3 of 2011.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Hi Lou

I’m avid follower of your column, you offer great insight on stocks
and investing. I want to get your view on IAE, the stock has since
recovered from its trading range of 1.60 to 1.85 during the summer and
its broken what I thought to be its resistance level of 2.20 it has
traded back down to 2.05 – 2.10. In your technical opinion is there
more upside to this stock at current levels given that insiders has
already bought into the stock at the 1.60-1.85 level.

Your opinion is appreciated.

George

Hi George,

Thanks for your interest and support, it is very much appreciated. One thing I want to advise is that you need to conduct your own due diligence. External analysis  should serve as a starting point in the search for further and better particulars on an investment, not as the only source of information in your investment decision making process. Lets examine the charts for Ithaca Energy Inc. ( IAE TSXV) and see if there is more gas in the tank.

The three year chart depicts the recovery of the shares of IAE from the late 2008 lows to the high of April 2010. There has been a pull back with some interesting patterns worth noting. The MACD generated a sell signal at the top in April  of 2010 after which the stock began a sell off all the way to $1.60 where it found support. The MACD then generated a buy signal in July of 2010 which saw IAE move up to$2.29.

Currently IAE  is netting  about 4,862 barrels of oil per day from their interests in various plays in the British North Sea. They have recently had their plans for the Athena Oil Field approved and expect to add 4,950 net barrels of oil per day to their production by Q3 2011.

The six month chart  illustrates the run from the lows of $1.60 and the resistance at $2.40. The MACD signalled the move  up from $1.80 in late September 2010 to $2.30 in early October.

I think that the stock has the opportunity to move higher given that they have four wells that they are working over that could add to their production. The first work over well that they completed saw output jump from 260 barrels of oil per day to 680 barrels.

I would let this horse run and see if  it can break through $2.40. The real kicker will be the success of their activities in the Athena field in Q3 of 2011.

Happy Capitalism!

Categories: Energy
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