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Sunday, September 27, 2009

Tiger Hedge Fund Manager Julian Robertson Predicts Armageddon - High Inflation

Tiger Hedge Fund Manager Julian Robertson Predicts Armageddon if Chinese and Japanese Don't Buy Our Debt.

CNBC's Erin Burnett (Erin Burnett Fan Club) interviewed legendary Tiger Hedge Fund manager Julian Robertson last week on Thurs 9/24/09. Robertson said the recession is temporarily over but we will see "Armageddon" if Chinese and Japanese don't buy our debt.
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Summary:

Earlier in the year Bill Gross said inflation could go to 6% or 7%. Robertson was on then and said "that would be conservative."

Robertson says we can grow and save our way out of it and that is the only way we will get out of being terribly dependent on the Chinese and Japanese.

Thinks inflation is a much higher risk than that of deflation.

Thinks interest rates will go to 15 or 20 percent if Chinese and Japanese won't lend us money.

Said US is selling mostly short term debt now because we can't sell our long-term debt to anyone but the Fed.

Said "history shows those who borrow short term usually get burned."

Said "spend, spend, spend... borrow, borrow, borrow" won't solve the problem unless we find a way to pay for the spending once we stop. Says if US savings rate goes from about 12% now to 25%, then this could help pay for the spending but it would be bad for the economy.

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "CD Rates at Largest US Banks" for the most recent table co


Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 144% (a double plus another 44% !) vs. the S&P500 UP at tiny 2.5% vs. NASDAQ down 3.2% (All through 9/30/09)

As of September 30, 2009, "Kirk's Newsletter Explore Portfolio" is up 25.8% YTD vs. DJIA up 10.7% YTD

Subscribe NOW and get the October 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)


US Treasury rates are so low, that they are paying less than long term inflation. See:



Thursday, September 24, 2009

Best CD Rates at the Largest Banks in the US

This table shows the best CD rates for the five largest banks operating in the United States. These banks are Bank of America, JP Morgan Chase, Citibank, Wells Fargo Bank, and HSBC Bank North America.

CD rates (APY) at the largest US banks (Current Data) for a $10,000 deposit.

Bank
CD Rates - APY in %
as of 9/24/09 for $10,000

6- Mo
1-Yr
18-Mo
2-Yrs
3-Yrs
5-Yrs
Bank of America (BAC)
0.50
0.95
1.00
2.10
2.30
3.01
JP Morgan Chase (JPM)
Bought WaMu -
Washington Mutual
0.75
1.25
1.50
2.15
2.25
3.00
Citibank (C)
aka
Citigroup & Citicorp
0.75
1.49
1.73
1.98
2.23
3.44
Wells Fargo Bank (WFC)
Bought
Wachovia - World Savings
0.30
0.60
0.90
15-mo
1.40
20-mo
1.90
27-mo
NA
HSBC Bank North America -
Branch & Telephone Rates
0.25
0.55
0.55
15-mo
0.75
0.75
1.01
HSBC Online Rates
1.10
1.85
1.85
15-mo
1.60


US Treasury Rate
0.19
0.38
NA
0.93
1.44
2.36

To see the table in full size with the current rates, click the
Bankrate.com says the average thirty year fixed rate mortgage is 5.25%:

Product Rate Last week
30 yr fixed
5.25% 5.20%
15 yr fixed
4.67% 4.66%
5/1 ARM
4.29% 4.30%

Any idiot off the street should be able to make money running a bank that pays rates this low then lends money out for mortgages at over 5%. (Assuming a return to sane lending practices where banks make loans to people who put up a 20% down payment and have income to repay the loan.)

World Savings used to offer great CD rates in California. World Savings was bought by Wachovia which continued to pay high rates to attract assets. Washington Mutual (WaMu) and Wachovia competed for deposits with each other by offering high rates.

To help save the banking system, the US eliminated some competition so the banks that are "too big to fail" can make money more easily. Wells Fargo, which had low rates all along, bought Wachovia. Likewise, Chase Bank bought WaMu. Now small savers have joined US taxpayers in bailing out the banks!"


One way to get four of the top five banks in a single investment is with the exchange traded fund XLF (XLF charts).
XLF Top Holdings % as of 8/31/09
J.P. Morgan Chase & Co. = 12.28
Bank of America Corporation = 11.01
Wells Fargo Company = 9.28
Goldman Sachs Group Inc. = 6.03
Citigroup Inc. = 4.11
% Assets in Top 5 Holdings = 42.70
Notes:
  • Bank of America or BofA (BAC stock quotes and charts) was "Nations Bank" before it bought Bank of America and took the name. BofA also bought Merrill Lynch officially as of January 1, 2009.
  • JP Morgan Chase (JPM stock quote and charts) bought Washington Mutual, fondly known as "WaMu"
  • Citibank (C stock quote and charts) is also known as Citigroup & Citicorp
  • Wells Fargo Bank (WFC stock quotes and charts) bought Wachovia Bank- that bought World Savings Bank)
  • HSBC Bank North America is the American subsidiary of UK-based HSBC Holdings plc. The Hong Kong and Shanghai Banking Corporation, also a subsidiary of HSBC Holdings, acquired a 51% shareholding in Marine Midland Bank of New York in 1980 and extended to full ownership in 1987. The banks continued to operate under the Marine Midland name until 1998, when the branch offices were rebranded as HSBC Bank USA.
A survey of large and small banks for best rates by term

Disclaimer: I own C (charts) and XLF (charts) in my personal account. I also cover C and XLF in my investment letter where I trade them around a core position currently in the money for both. I could sell all shares at any time to lock in my profits if my opinion sours on the sector as a whole.

Friday, September 11, 2009

DOW Gold Ratio at 9.66

The Dow Jones Industrial Average measured in how many ounces of gold it takes to buy the 30 stock DOW is up 37% from its 17-year March 6th low of 7.03. (Gold quote and charts) Despite that impressive gain, the DOW-Gold ratio remains 78% below its 1999 peak of 44.77.

Here is a chart showing the current Dow to Gold Ratio, the ratio of the price of the Dow Jones Industrial Average to the price of gold. When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Click chart courtesy of stockcharts.com for full size image

The markets, measured by the S&P500 (S&P500 Charts) and DIJA (DJIA Charts), may have recovered to new highs in 2007, but the DOW:Gold ratio told a different, truer story of just how unhealthy the US economy was.
  • Back in 1999, it took 45 ounces of gold to buy the DJIA.

  • On Friday March 6 of 2009 the DOW-Gold ratio hit a low of 7.03

  • As of Friday (September 11, 2009) it only took 9.66 ounces of gold to buy the DOW

  • Gold quote and charts
The scary part is the DJIA-to-Gold ratio got down near 1 in the early 1980s and was just under 0.2 in the early 1800s.

Which way do you think the DOW-Gold ratio is headed?


Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 144% (a double plus another 44% !) vs. the S&P500 UP at tiny 2.5% vs. NASDAQ down 3.2% (All through 9/30/09)

This 200 Year Dow/Gold Chart shows the DOW/Gold ratio from 1800 through August 2008.
chart courtesy of www.sharelynx.com (Click for full size image)

With the DOW:Gold ratio now at 9.66, it is trading below the green zone in the second chart. The ratio is oversold, but nothing says it can't get more "oversold."

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "Very Best CD Rates with FDIC" for a list of the best rates and terms.

US Treasury rates are so low, that they are paying less than long term inflation. See:
As of September 30, 2009, "Kirk's Newsletter Explore Portfolio" is up 25.8% YTD vs. DJIA up 10.7% YTD

Subscribe NOW and get the September 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

Saturday, September 05, 2009

Best Investment Newsletter - Up 131% in a Down Market!

Did your current investment newsletter tell you to raise cash by taking profits near the market top in 2007?

Mine did! I took profits to increase the cash position of my most aggressive "explore portfolio" to 30%.
Did your current investment newsletter tell you to use cash raised when the markets were near their highs to buy a blue chip DOW stock when the markets were at their lowest levels in 13 years?

Mine did! When the markets made a 13 year low, I had cash in the portfolio and told my subscribers to use some of it to buy some General Electric (GE Charts) shares at $6.76.
Click to view full size GE chart courtesy of stockcharts.com

Doubled Money in a Down Market!

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 144% (a double plus another 44% !) vs. the S&P500 UP at tiny 2.5% vs. NASDAQ down 3.2% (All through 9/30/09)

As of September 30, 2009, "Kirk's Newsletter Explore Portfolio" is up 25.8% YTD vs. DJIA up 10.7% YTD

Did your current investment newsletter tell you to use cash raised from when the markets were near their highs to buy a speculative, very high growth telecom growth stock when the markets were at their lowest levels in 13 years and that telecom stock was making an all time low?

Mine did! I had cash in the portfolio and told my subscribers to use it to buy some some Finisar (FNSR Charts) shares at $0.24.
Click to view full size chart courtesy of stockcharts.com

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 144% (a double plus another 44% !) vs. the S&P500 UP at tiny 2.5% vs. NASDAQ down 3.2% (All through 9/30/09)

As of September 30, 2009, "Kirk's Newsletter Explore Portfolio" is up 25.8% YTD vs. DJIA up 10.7% YTD

HURRY! Subscribe NOW and get the September 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

More information:

Friday, September 04, 2009

ECRI International FIG Summary - Expectations for Future Inflation

The Economic Cycle Research Institute, ECRI - a New York-based independent forecasting group, in a series of five press releases last night, updated their outlook for international inflation. (More about ECRI). Below is a summary of ECRI's international Future Inflation Gauges (FIG) for July 2009.

Eurozone (Germany, France, Italy & Spain)
EUROZONE FUTURE INFLATION GAUGE SLIPS
  • ECRI’s Eurozone Future Inflation Gauge (EZFIG) edged down in July. The value of the EZFIG lies in its ability to predict cyclical turns in Eurozone inflation.
  • The EZFIG eased to 84.6 (1992=100) in July from 85.0 in June, though its smoothed annualized growth rate rose to -16.7% from -19.1%. The EZFIG was pulled down mainly by declining inflationary pressures in Germany.
  • Its latest dip notwithstanding, the EZFIG has begun to stabilize, after plummeting to an all-time low in March. If this pattern persists, consumer price deflation in the Eurozone may become less of a threat.
FRENCH INFLATION PRESSURES REMAIN SUBDUED
  • ECRI's French Future Inflation Gauge (FFIG) rose slightly in July. The value of the FFIG lies in its ability to anticipate cyclical swings in the French inflation rate.
  • The FFIG ticked up to 98.4 (1992=100) in July from 98.3 in June, as its smoothed growth rate rose to -3.1% from -4.0%. The gauge was boosted mainly by an inflationary move in a measure of raw materials prices.
  • As forecast by the earlier plunge in the FFIG, French inflation plummeted drastically starting last summer, and subsequently slid into negative territory. With the FFIG remaining near June’s record low, French consumer price deflation is likely to persist for the time being.
GERMAN FUTURE INFLATION GAUGE FALLS
  • ECRI's German Future Inflation Gauge (GFIG) decreased in July. The value of the GFIG lies in its ability to anticipate cyclical turning points in the German inflation rate.
  • The GFIG declined to 72.1 (1992=100) in July from 73.8 in June, though its smoothed growth rate inched up to -33.4% from -35.2%. The gauge was pulled down mainly by a negative contribution from a measure of loans.
  • As correctly forecast by the earlier plunge in the GFIG, German inflation remains far below its earlier highs. With the GFIG nearing a seven-and-a-half-year low, German consumer prices are likely to remain restrained.
ITALIAN FUTURE INFLATION GAUGE EDGES UP
  • ECRI’s Italian Future Inflation Gauge (IFIG) ticked up in July. The value of the IFIG lies in its ability to anticipate cyclical turning points in the Italian inflation rate.
  • The IFIG rose marginally to 95.1 (1992=100) in July from 95.0 in June, as its smoothed annualized growth rate rose to -4.9% from -6.2%, mainly due to a positive contribution from a measure of supplier deliveries.
  • As anticipated by the earlier plunge in the IFIG, Italian inflation has fallen sharply since mid-2008. However, the IFIG has been creeping up in recent months, indicating that there is little deflation danger in Italy.

SPANISH FUTURE INFLATION GAUGE RISES
  • ECRI’s Spanish Future Inflation Gauge (ESFIG) increased in July. The value of the ESFIG lies in its ability to anticipate cyclical turning points in the Spanish inflation rate.
  • The ESFIG rose to 74.7 (1992=100) in July from 72.6 in June, as its growth rate jumped to -13.0% from -23.1%. The gauge was pushed up mainly by a positive contribution from a measure of producer prices.
  • As predicted by the earlier upturn in the ESFIG, Spanish consumer prices have begun to pick up from their earlier lows. With the ESFIG further distancing itself from its record lows, Spanish inflation is likely to rise further in the months ahead.
United Kingdom: RESTRAINED U.K. INFLATION PRESSURES
  • ECRI's United Kingdom Future Inflation Gauge (UKFIG) inched up in July. The value of the UKFIG lies in its ability to anticipate cyclical swings in U.K. inflation.
  • The UKFIG ticked up to 98.7 (1992=100) in July from 98.6 in June, as its smoothed annualized growth rate rose to -7.0% from -9.4%. The gauge was pushed up mainly by an inflationary move in a measure of vendor performance.
  • The UKFIG rose marginally from June’s record low in its latest reading. Thus, inflation pressures in the U.K. economy remain subdued.
Japan: JAPANESE FUTURE INFLATION GAUGE DIPS AGAIN
  • ECRI’s Japanese Future Inflation Gauge (JFIG) continues to decline. The value of the JFIG lies in its ability to anticipate cyclical swings in Japanese inflation.
  • The JFIG slipped to 96.4 (1992=100) in July from 96.5 in June, though its smoothed annualized growth rate ticked up to -2.1% from -2.3%, mainly due to a negative contribution from a measure of joblessness.
  • Japanese inflation plummeted in the second half of 2008, and consumer prices have been easing for the past year, as anticipated by the earlier plunge in the JFIG. With the JFIG slipping further in July to a new record low, deflationary pressures are still mounting.
Korea: KOREAN FUTURE INFLATION GAUGE TICKS UP
  • Korean inflationary pressures rose a bit further in July, according to ECRI's Korean Future Inflation Gauge (KFIG). The value of the KFIG lies in its ability to anticipate cyclical swings in the Korean inflation rate.
  • The KFIG inched up to 97.4 (1992=100) in July from 97.1 in June, as its smoothed annualized growth rate jumped to 0.3% from -1.1%, mainly due to an inflationary move in a measure of joblessness.
  • Korean inflation has risen marginally in recent months, as predicted by the earlier cyclical upturn in the KFIG. With the KFIG rising further in July to a nine-month high, Korean inflationary pressures are clearly edging up.
Canada: CANADIAN FUTURE INFLATION GAUGE INCHES UP
  • ECRI’s Canadian Future Inflation Gauge (CFIG) ticked up in July. The value of the CFIG lies in its ability to anticipate cyclical turning points in the Canadian inflation rate.
  • The CFIG increased to 95.1 (1992=100) in July from 94.7 in June, as did its smoothed annualized growth rate to -3.3% from -5.4%, mainly due to a positive contribution from a measure of commodity prices.
  • Canadian inflation slipped in its latest reading, but remains close to June’s seven-month high, as anticipated by the earlier upturn in the CFIG. Meanwhile, the CFIG has risen in a somewhat pervasive and persistent pattern since last spring, indicating that Canadian inflation pressures are creeping up.
Commenting on the data, Lakshman Achuthan, managing director at ECRI said
  • "Despite the widespread optimism about Eurozone growth, underlying inflationary pressures are essentially non-existent.

  • "The UKFIG rose marginally from June’s record low in its latest reading. Thus, inflation pressures in the U.K. economy remain subdued."
Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 131% (over a double!) vs. the S&P500 DOWN 1.7% vs. NASDAQ down 7.9% (All through 9/5/09)

As of September 5, 2009, "Kirk's Newsletter Explore Portfolio" is up 18.8% YTD vs. DJIA up 7.6% YTD.



More information:

Tuesday, September 01, 2009

GeoGlobal Exploration Activities Update

PRESS RELEASE: (KirkLindstrom.blogspot.com Sept. 1, 2009) - GeoGlobal Resources Inc. (GeoGlobal or the Company) (NYSE Amex: GGR Charts) disclosed today an update of certain of our exploration activities conducted during the quarter ended June 30, 2009 and through August 31, 2009.



For commentary and my current outlook for GGR, read "Kirk's Investment Newsletter"

Exploration Highlights:

- Production Commences at Tarapur and Proven Reserves announced

- Drilling to Commence on KG Onshore Block in the First Quarter 2010

- KG Offshore Block Field Development Plan submitted on Deen Dayal West

- Testing completed on KG#21, KG#33 and KG#19 on the KG Offshore Block

- KG#20-SS to commence drilling on KG Offshore Block

- Drilling continues on Ankleshwar Block

Tarapur Block

Tarapur 1 Discovery Area

As previously reported, first production in Tarapur commenced on different dates throughout the month of May 2009 from the three discovery wells (Tarapur 1, Tarapur P and Tarapur 5). Total gross production from these three wells for the second quarter ending June 30, 2009 amounted to 22,125 Bbls of oil. In addition to the oil production, a total of 16.1 MMscf of natural gas was produced and flared off. Upon tie-in of additional wells, it is the intention that the natural gas will also be contained and sold. The Company's participating interest share of this production is 14%.

It is expected that three further development wells (TD-1, TD-2 and TD-3) will come on stream during the third quarter of 2009. As previously reported an independent engineering report which covers the three currently producing wells along with the three development wells that are expected to come on stream during the third quarter, reported that the Company's share of total proved reserves for these six wells is 0.245 million stock tank barrels (MMSTB).

There are eleven additional wells which are drilled, tested and awaiting tie-in to the oil tank storage facilities. GSPC as operator is currently in the process of preparing and filing the necessary declarations of commerciality and field development plans pursuant to the provisions of the PSC in order to bring these additional eleven wells within the Tarapur 1 Discovery Area onto production before the end of the fourth quarter of 2009.

Krishna Godavari Onshore Block

In a recent Technical Committee meeting held July 8, 2009, it was agreed among the parties to pursue the 3D seismic and the drilling commitments simultaneously, by identifying prospects and locations based upon the available reprocessed 2D seismic data and related geoscientific information allowing us the ability to meet our Minimum Work Program commitment for Phase I within the necessary timelines, being February 15, 2012.

Three priority locations have been proposed by us to the operator, Oil India Ltd. These locations have been reviewed by and agreed to by Oil India Ltd, as well as a third party engineering firm. All of these locations have multiple prospects in both the shallower (Eocene - Miocene) and the deeper (Cretaceous - Jurassic) zones.

All necessary steps are currently being undertaken by Oil India Ltd. in an effort to commence the drilling of the first of twelve exploration wells by the first quarter of 2010.

Krishna Godavari Offshore Block

Deen Dayal West Field Development Plan

On June 18, 2009 GSPC submitted the Deen Dayal West field development plan in accordance with the provisions of the PSC to the Management Committee for approval. The Deen Dayal West field development plan currently encompasses fifteen wells, which includes recompleting four wells already drilled (KG#8, KG#15, KG#17 and KG#28) along with eleven development wells yet to be drilled.

Six wells (KG#16, KG#19, KG#21, KG#22, KG#32 and KG#33) are awaiting further appraisal before the preparation and submission of a declaration of commerciality pursuant to the PSC can be supported.

KG#21 Well

The KG#21 exploratory well commenced drilling on September 22, 2008 using the Perro Negro 3 (PN-3) jack-up drilling rig. The well is located approximately 1.36 kilometers northwest of the KG#8 discovery in approximately 60 meters of water depth in the southwestern portion of the KG Offshore Block in the Deen Dayal North-west fault block. The well was slightly deviated and was drilled to a depth of 5,656 meters being a total vertical depth of 5,467 meters. The objective of the KG#21 location is two main targets with the primary target being the Lower Cretaceous sequence which was unable to be tested in the KG#31 exploratory well due to mechanical problems and the secondary target being the Upper Cretaceous fan deposits.

GSPC as operator originally planned a total of seven drill stem tests on the KG#21 well in the Lower Cretaceous sequence over the 722 gross meter interval of 4,920.5 to 5,642.5 meters. GSPC subsequently settled on four drill stem tests over the sequence in the Lower Cretaceous and one drill stem test over the sequence in the Upper Cretaceous, the results of which are as follows:

- DST-1, the first drill stem test was conducted by perforating 37.5 net meters over the gross interval 5,593.7 to 5,642 meters. This successful DST-1flowed during clean-up, on a 36/64 inch choke at a stabilised rate of 20 MMscfd gas and 2,600 barrels per day water with 4,670 psi (pounds per square inch) flowing well head pressure. During the main flow, on a 20/64 inch choke, the well flowed at a stabilised rate of 10 MMscfd gas and 1,200 barrels per day water with 7,220 pounds per square inch flowing well head pressure.

- DST-2, the second drill stem test was conducted by perforating 25 net meters over the gross interval 5,517 to 5,567 meters. DST-2 flowed during clean-up, on a 24/64 inch choke at a stabilised rate of 1.5 MMscfd gas and 500 barrels per day water with 1,000 psi flowing well head pressure.

- DST-3 was conducted by perforating 20 net meters over the gross interval 5,425 to 5,474 meters. DST-3 flowed during clean-up at a stabilised rate of 0.65 MMscfd of gas with 270 psi flowing well head pressure.

- DST-4 was conducted by perforating 56 net meters over the gross interval 5,193 to 5,321 meters. DST-4 flowed during clean-up at a stabilised rate of 1.0 MMscfd of gas with 530 psi flowing well head pressure.

- DST-5 was conducted in the Upper Cretaceous by perforating 15 net meters over the gross interval 3,592.5 to 3,630 meters. DST-5 flowed during clean-up at a stabilised rate of 6.5 MMscfd gas and 600 barrels per day condensate with 2,530 psi flowing well head pressure.

With the successful completion of these drill stem tests, the well has been suspended and the Perro Negro 3 (PN-3) jack-up drilling rig has been de-hired.

KG#33 Well

The KG#33 appraisal well commenced drilling on November 4, 2008 using the Atwood Beacon jack-up drilling rig. The well is located approximately 6.5 kilometers northeast of the KG#8 discovery in approximately 109 meters of water depth in the southeastern portion of the KG Offshore Block in the Deen Dayal East fault block. The well was directionally drilled to a total depth of 5,126 meters being a total vertical depth of 4,596 meters. The objective of the KG#33 location is to explore the hydrocarbon potential of the Lower Cretaceous sequence in the Deen Dayal East fault block and correlate to the KG#16 discovery well.

GSPC as operator conducted three drill stem tests on the KG#33 well over the 313 gross meter interval of 4,555 to 4,868 meters, the results of which are as follows:

- DST-1, the first drill stem test was conducted by perforating 5.0 net meters over the gross interval 4,828 to 4,868 meters. This DST-1 flowed during clean-up, on a 20/64 inch choke, at a stabilised rate of 0.7 MMscfd gas with 800 pounds per square inch flowing well head pressure. DST-1 was subsequently stopped and the operator performed a hydraulic fracture over the same 5 meter interval. The result was DST-1A which had an increase in flow through a 16/64 inch choke to a stabilized rate of 6.3 MMscfd gas with 5,500 psi flowing will head pressure.

- DST-2 was conducted by perforating a net interval of 34.5 meters over a gross interval from 4,692 to 4,752 meters. DST-2 recorded flow during clean-up, on a 16/64 inch choke at a stabilised rate of 0.9 MMscfd with a 700 psi flowing well head pressure.

- DST-3 was conducted by perforating a 5 meter interval from 4,596 to 4,601 meters. A hydraulic fracture job was conducted over this interval resulting in a stabilised flow during clean-up through a 24/64 inch choke of 4.8 MMscfd with a 1,730 flowing well head pressure.

With the successful completion of these drill stem tests, the KG#33 well has been suspended and the Atwood Beacon jack-up drilling rig has been de-hired.

KG#19 Well

The KG#19 exploratory well is located approximately 11 kilometers northeast of the KG#8 discovery in approximately 198 meters of water depth in the southeastern portion of the KG Offshore Block in the Deen Dayal East fault block. The KG#19 well commenced drilling on May 2, 2008 using the Essar Wildcat self propelled semi-submersible drilling rig. The well was suspended after setting the casing at 889 meters so that the Essar Wildcat rig could be repaired with a new 15,000 psi blow out preventer. The Essar Wildcat rig resumed drilling the KG#19 well on January 1, 2009. The well was vertically drilled to a total depth of 5,357 meters being a total vertical depth of 5,351 meters. The objective of the KG#19 location is to explore and probe the hydrocarbon potential of the Lower Cretaceous sequence in the Deen Dayal East fault block.

The KG#19 well was successfully logged and a seven inch liner was run to total depth. GSPC had originally identified two zones for testing covering the intervals 4,440 to 4,535 meters and 4,800 to 4,960 meters. GSPC subsequently chose to conduct only one drill stem test. DST-1 was conducted by perforating 33 net meters over the gross interval 4,455 to 4,530 meters. DST-1 successfully flowed during clean-up at a stabilized flow rate of 3.8 MMscfd gas and 70 barrels per day of condensate with a 2,440 psi flowing well head pressure.

GSPC, as operator has elected to suspend the KG#19 well and move the Essar Wildcat to a new location, the KG#20-SS.

KG#20-SS Well

The KG-20-SS is expected to commence drilling in early September, 2009 using the Essar Wildcat self propelled semi-submersible drilling rig. The KG#20-SS is located approximately 5.22 kilometers to the northeast of the KG#19 well in approximately 480 meters of water. The well is planned to be drilled vertically to a depth of approximately 5,275 meters. The objective of the KG#20-SS is to explore four targets with a strong amplitude signature on seismic in the Lower Cretaceous Sequence in glauconitic sands similar to that which was encountered in the KG#19 well.

Carried Interest Dispute on the KG Offshore Block

GeoGlobal and GSPC continue to have discussions to seek to resolve the previously announced dispute between them relating to GSPC's claim under the terms of the Carried Interest Agreement. As at August 31, 2009, no definitive settlement agreement has been entered into.

Ankleshwar Block

On February 26, 2009, GSPC as operator applied for a six month extension of Phase I to September 30, 2009 to complete the exploratory drilling commitment of fourteen wells, which approval has been granted.

Drilling of the three exploratory wells (Ank-34, Ank-36 and Ank-37) which commenced during the second quarter of 2009 is now complete and two of those wells are currently testing. Two exploratory wells (Ank-35 and Ank-38) which commenced drilling in August 2009 continue to drill.

As at August 31, 2009, ten wells have been or are being drilled on this block. Of those ten wells, two are currently drilling, one (Ank-21) is suspended awaiting the submission of the oil discovery appraisal plan, two are testing (Ank-34 and Ank-36) and five are to be abandoned. Four exploratory wells remain to be drilled under the Phase I Minimum Work Program.

About GeoGlobal

GeoGlobal Resources Inc., headquartered in Calgary, Alberta, Canada, is a US publicly traded oil and gas company, which through its subsidiaries, is engaged primarily in the pursuit of petroleum and natural gas through exploration and development in India. Since inception, the Company's efforts have been devoted to the pursuit of Production Sharing Contracts with the Government of India. Currently, the Company is focused on the development of high potential exploration targets in the Krishna Godavari, Cambay, Deccan Syneclise, and Rajasthan basin areas.

Cautionary Statement to Investors and more disclaimers read the full press release here

For commentary and my current outlook for GGR, read "Kirk's Investment Newsletter"

GGR: AMEX

Last $0.8099
Change = +$0.0399
% Change = 5.18%

IMPRESSIVE Long Term Results


Since 9/30/98 inception, "Kirk's Newsletter Explore Portfolio" is UP 390%
vs. the S&P500 UP only 51% vs. NASDAQ UP only 57% (All through 12/31/11)
(More Info, Testimonials & Portfolio Returns)
Q1 2012 Update: Up 11.3% YTD as of 3/31/12
(remember this 2012 performance is with 1/3 in fixed income!)



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