Market Overview

The Greatest Oil Blunder Of All Time?


Imagine an energy company spending 10 years exploring the Rawat oil concession in Sudan, Africa.

During that time, they spent millions on shooting and acquiring 6,700 km of 2D seismic, shooting and interpreting 1,000 sq. km. of 3D seismic, and drilling 13 exploration oil wells.

And while they did strike a little oil, incorrect seismic interpretation made them think that their blocks held far less oil than they had anticipated.

So they give up on the project.

Big mistake

See, it turns out their seismic studies were flawed.

Now they will have to watch other energy companies produce millions of barrels in part based on all their hard work (and money).

Wouldn't it be great to be in on one of those companies?

Well, you have that chance.

See, the above story is a real one, taking place in a remote region of Sudan.

Sudan in Africa is the site of Block 25, the Rawat concession that a Chinese energy company gave up on because they incorrectly assessed the type of oil formation they were dealing with.

They thought the oil was locked in what's known as a structural trap – which is when faults in the earth caused by seismic activity trap deposits of oil and gas.

But in this case, the oil is actually locked in a stratigraphic trap, which hardly any oil company outside of North America looks for…or is equipped to handle.

This kind of trap is formed when oil and gas is locked within sandstone that's encased in shale.

Oil in stratigraphic traps is difficult to dislodge – and difficult to find – unless you know what to look for.

I could get more technical about structural and stratigraphic oil traps, but what's important to understand is that the mistake the Chinese energy company made has opened the door to a rare windfall opportunity for someone else.

Longtime oil man George Fulford – who's drilled 77 wells in Sudan over the last 40 years and has a near perfect success rate – deserves credit for having discovered the Chinese mistake.

And Stamper Oil & Gas (TSX.V: STMP; OTC: STMGF) – an under-the-radar Canadian energy exploration company – is taking full advantage of it.

You see, four years ago Stamper CEO David Greenway asked Fulford to interpret seismic data that had been done on the Rawat Concession that the Chinese company had let go (and which is located in what's known as the Al-Rawat Basin).

Fulford's conclusions not only interpreted the data correctly, the Sudanese government learned of them and its state-run oil company, Sudapet Co. Ltd., drilled eight new test wells.

The first five proved underwhelming, but the last three gushed out oil at a rates up of 2,200 barrels per day (bpd).

Now operators have identified 33 wells that can be drilled from Al-Rawat.

Plans are for an initial 6,000 bpd within the first year of operations growing as new wells are added on. One well achieved flow-rates of 2,255 bpd in January, so there's little question this goal will be achieved.


And with today's rising oil market, all that oil could easily bring in millions more in the years ahead.

Make no mistake, this is a game-changing discovery.

This is where Stamper Oil & Gas (TSX.V: STMP; OTC: STMGF) comes in. Stamper has a Memorandum of Understanding to buy 100% of State Oil Corporation for 25,000,000 shares and repayment of State's expenses. State has the right to farm-in up to a 50% interest in the Al-Rawat field pursuant to an MOU with Sudapet. State has a current agreement with Sudapet to farm-in a 35% interest in Block 25 by paying $40,144,000 for the developed fields and $26,250,000 for the undeveloped fields, plus its share of costs for new wells. State Oil has technical personnel in Sudan and is anxious to get going.

The Sudanese have already sunk wells on the Al-Rawat property, with one of them testing at over 2,200 bpd.

Now estimates of probable reserves on this property are around 182 million barrels, according to a recent report by a well known Petroleum Engineering company.

The project has 6,000 bpd ready to produce and intends to add the 33 wells to be drilled as they come on line.

With all these developments, it's hard to imagine Stamper's current stock price staying put for much longer.

Aside from its stock price, there are five more reasons you should consider taking a good hard look at this company:

1. The company chairman has a long history of developing Sudan's oil deposits and cultivating good will

It all began about 20 years ago, when Stamper (TSX.V: STMP; OTC: STMGF) Chairman Lutfur Rahman Khan served as Chairman and CEO of a company heavily involved in Sudanese oil exploration.

That company was Arakis Energy Corporation, which at the time was listed on NASDAQ (and was bought out in 1998 by Talisman Energy Inc.).

Arakis Energy Corporation was able to boost the reserves of two huge Sudanese oil fields (the Heglig and Unity fields) from 150 million to 750 million barrels by drilling 77 successful wells.

As you might imagine, this success created many high-paying jobs for local workers.

On top of that, Arakis Energy Corporation was actively involved in considerable humanitarian work and social development in Heglig, where they built a 40-bed hospital and provided three fully equipped ambulances...

They also drilled water wells to provide clean water for the local population.

All of this generated a ton of good will and has endeared Khan and his team to the Sudanese government.

"We have built some great connections over there," said Greenway. "You walk in as royalty over there…(now) they want Canadian companies..."

And what better company than one whose chairman helped transform the country's oil industry?

2. The company is benefiting from China's $millions investment in oil discovery

Imagine someone building a factory and equipping it with everything you need to produce one of the most in-demand products on Earth…and then giving that factory to you.

That's sort of what happened here.

The bottom line is the $millions investment the Chinese made exploring its former property allows Stamper, on completion of all steps in the acquisition, to concentrate its drilling, expanding its reserves, and on delivering, initially 6,000 bpd to market.

That should prove to be a sweet deal for early Stamper (TSX.V: STMP; OTC: STMGF) investors.

3. The Stamper management team has the skills needed to transform Sudan into a major oil producer

This team includes George Fulford, who has 40 years' experience as a professional geophysicist and worked in Sudan from 1994 to 2003.

During that time, he selected the drill sites of 77 successful wells. A remarkable near perfect success rate.

Since then he's worked on other sites in Africa, as well as in Southeast Asia and South America.

Stamper's (TSX.V: STMP; OTC: STMGF) management team also includes:

CEO David Greenway, who has two decades experience managing, financing and developing growth strategies for a variety of firms, particularly junior public resource companies.

For example, he achieved great success as CEO of Chief Consolidated Gold Mines and SNS Silver Corp., and now he's ready to make a similar splash with Stamper.

CFO David Alexander has thirty years of experience in international finance, and has helped identify stressed assets and developed a framework to realize value from those assets in excess of $1 billion. As CFO of Arakis Energy Corporation in the early 1990s, Mr. Alexander helped managed the company's growth from startup to over a billion barrel in reserves primarily in Sudan. Arakis was subsequently sold to Talisman Energy.

Chairman Lutfur Rahman Khan, who has more than three decades of experience in the oil and gas sector.

Most importantly, he's keenly aware of the difficulties of working in Sudan, thanks to his time serving as Chairman of Arakis Energy Corporation from 1995 to 1999.

During this period, he oversaw the acquisition of a 12.2-million-acre oil concession in Sudan.

That acquisition proved to be a huge triumph, as it resulted in the discovery of 1 billion barrels of oil.

Khan has also been active in the energy sector throughout Canada and controls several companies in the upstream and downstream sectors.

4. The price of oil has been rebounding and looks likely to continue trending upward

For the last few years, institutional capital has been ignoring the Brent crude market due to shale oil saturation and the depressed oil complex.

But now that's changing, as evidenced by Brent's rise from about $30 per barrel to $68 (as of April 5, 2018).

JP Morgan expects this uptrend to continue throughout all oil markets and cites the following reasons:

- Stronger economic fundamentals
- Synchronizing global economic growth
- Continuing geopolitical tensions
- The likelihood of further OPEC production cuts

Another reason oil prices are likely to continue rising is the falling U.S. dollar (since oil purchases are transacted in dollars, a weaker dollar translates into more expensive oil).

Obviously, stronger oil prices bode well for well-run energy companies…especially those sitting on huge new oil discoveries.

5. Stamper have positioned themselves for a rare ground-floor opportunity in energy

Fulford is convinced that Stamper (TSX.V: STMP; OTC: STMGF) is poised to do really well from what he calls "one of the last great finds" out there.

If he's right – and we think he is – then obviously early investors could reap huge rewards.

Honorable Mentions:

MEG Energy Corp (TSX:MEG): is a Canada-based oil producer which operates primarily in Northern Alberta's oil sands. The forward-thinking company uses steam-assisted gravity drainage to retrieve oil from the deep wells which it drills. The excess heat and electricity produced from this process is then sold to Alberta's power grid.

The company's large proven resources and their cutting-edge technology make MEG a promising company for investors looking to get in to the promising oil sands in Alberta.

Tourmaline Oil Corp (TSX:TOU) is another Canadian resource producer focusing on exploration, production, development and acquisition within Western Canadian Sedimentary Basin. The company is in possession of an extensive undeveloped land position with long-term growth opportunities and a large multi-year drilling inventory.

Tourmaline's strong leadership make the company a promising pick for investors looking to take advantage of the tremendous Canadian oil opportunities which are due for a strong rebound as oil prices inch higher.

Power Financial Corp (TSX:PWF): Montreal-based Power Financial Corp has been in the finance industry since 1984. The company operates in three segments: Lifeco, IGM and Pargesa Holding SA (Pargesa). And, with its holdings in a diversified portfolio spanning the United States and Europe, Power Financial is a leader in its field.

Focusing its investments in the emerging FinTech industry, Power Financial stands to benefit by riding this wave into the future. The company's forward-thinking attitude and liberal approach to technology is sure to leave investors satisfied.

We like PWF because it owns 60 percent of Wealthsimple, a leading robo-advisor for investing in ETF portfolios.

Kinaxis Inc (TSX:KXS) is a provider of cloud-based subscription software for supply chain operations. The Company offers RapidResponse as a collection of cloud-based configurable applications. The Company's RapidResponse product provides supply chain planning and analytics capabilities that create the foundation for managing multiple, interconnected supply chain management processes, including demand planning, supply planning, inventory management, order fulfillment and capacity planning.

Kinaxis is a growing company, but the company has already carved out a significant piece of the pie. As a leader in its field, Kinaxis is a force which investors are keeping an eye on.

Canadian Natural Resources Limited (TSX:CNQ): This 53 billion market cap giant is one of the biggest names in Canadian crude oil and natural gas exploration, development and production. In the second half of the year this giant has turned around its stock and has now seen consecutive months of strong gains.

It is all looking positive here as oil markets turn around and oil prices appear to have found a new price range that will only see production rise again in Canada.


Forward-Looking Statements

This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that the Sudan oil discovery will prove as large and as significant as expected; that probably reserves can become proven reserves and that the reserves can be produced; that SOC will have sufficient funds to acquire and will pay for 35% of the developed oilfields of over $40M and then the undeveloped oilfields of over $26M,and that Stamper will be able to purchase 100% of SOC; the projected number of wells to be added; that the Sudan project will be able to produce oil as currently scheduled and at the targeted low costs from its Sudan property; that STAMPER will obtain operating permits on its properties; that the oil when produced by STAMPER will be high quality suitable for standard use; and that STAMPER will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that Stamper may not get TSXV approval for its purchase of SOC; SOC may not be able to pay the costs of acquiring its 35% of Block 25; the group may not get regulatory approval for their operations, aspects or all of the properties' development may not be successful, production of oil may not be cost effective as expected; there is substantial political risk and also risk of war in Sudan, which have the potential of disrupting or destroying production and assets; STAMPER may not raise sufficient funds to carry out its plans, changing costs for extraction and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and resource recoveries assumptions based on limited test work with further test work may not be viable; world oil prices may drop; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the oil reserves are not proven or cannot be economically produced on its properties, or that the required permits to build and operate the envisaged facilities cannot be obtained. Currently, STAMPER has no revenues. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.


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