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May 3, 2010 / Jeb

Rig Disaster in Gulf Coast Will Bring Attention To Oilsands Quest (BQI)

Oilsands Quest is the leading oil sands developer in Saskatchewan.  They have over 3 billion barrels of oil in the sand and is trading below a $1.

The recent rig disaster in the gulf is causing a public relations and political nightmare for deepwater drillers.  As oil moved higher many major companies invested in deep water drilling projects like these in the Gulf.  Drilling in the Gulf of Mexico has always been controversial and this event will lead to more legislative restrictions on drilling.

This latest disaster will cause big oil to look for other development projects that is secure.  Oilsands Quest (BQI) is a perfect play on the impeding energy crisis caused by the rig disaster and also the trouble with Iran.  Major oil is looking for supply that is away from the middle east and legislative restrictions.

I believe Oilsands Quest (BQI) is being considered as a takeover candidate.  Selling off its non core assets and placing the experienced people in the right positions such as the recent COO shows to me that the company is serious about being acquired for a premium.

Look at this quote from the last press release describing the newly appointed COO.

“Ms. MacKenzie spent two years as Petro-Canada’s Vice-President of Human Resources, leading the human resources function across Petro-Canada’s four business units. She was one of the four-member senior Petro-Canada team that led the pre-merger planning for the integration of the Petro-Canada and Suncor operations.”

This is an important piece of information.

Look at the chart.

I believe BQI is ready to make a move above the 200 day moving average at traders look for alternative development oil companies.

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3 Comments

Leave a Comment
  1. James Montesano / May 3 2010 8:13 pm

    Brilliant analysis and insight as always. This site is the best kept secret in the investing world. Only complaint is you don’t post enough. Keep up the good work!!!!!!!

  2. Biodoc / Jun 29 2010 11:06 am

    BQI has been one of the worst performers for the Oil Sands Stock Index. Soros and T.Boone have been gobbling up Suncor shares since first quarter. BQI has been dumped all the way to $0.51
    shaking out a large chunk of shareholders, is this current price making them somehow more desirable for a takeover? What is your current view of BQI’s relative strength?

    • Mining For Winners In Any Market / Jun 29 2010 1:50 pm

      BQI’s relative strength is weak…until the markets turn around and economic indicators turn positive I would stay away from BQI even though it is trading at such a cheap valuation.

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