I search high and low for stocks of interest to share with my readers and some days I don’t blog because I don’t find any.  This week is a case in point.  I didn’t find any likely companies until this morning when I came across Oil Sands Quest, Inc. (BQI).

BQI is engaged in aggressively exploring Canada’s largest contiguous oil sands land holding, which is located in northeast Alberta and northwest Saskatchewan.

This is a pure speculative play on an oil and gas exploration company that hasn’t made “dollar one” yet and has had losses for as far back as I can go.  What they do have is some interesting properties with MASSIVE potential (according to the company) AND the amazing ability to raise capital seemingly at will.

The company just announced another successful private placement that raised $10.2 Million at a price of $1.05 per share.  That is on the heels of 2009′s raise of $29.8 Million @ 83 cents per share.  So, I see a oil and gas company that can raise money when it wants and at successively higher valuations. My experience is that the reverse is usually true for exploration companies.  That is a huge vote of confidence for BQI.

What is also compelling are their estimates of the reserves that are contained in the over 1.2 Million acres that they own or lease in the Alberta and Saskatchewan Provinces.  In a report issued in late 2009, the company’s high estimate for its Axe Lake, Raven Ridge and Eagles Nest properties was in excess 19 Million barrels (P90 and P50).   That is a lot of oil.

The chart is also compelling….see the annotations below

With cash in the bank of over $46 Million and no long term debt, it appears that BQI has the financial wherewithal to make their dreams a reality.   Investors seem to be buying their story and I am pretty convinced too.

Good luck and good trading

Jeffrey Dean

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