American Petro Hunter (AAPH.OB) Strikes Pay-Dirt On the Ground
that Built Standard Oil.

Kansas Gusher is a Game Changer!  

Dear Energy Investor,

Oil prices have more than doubled from their 2009 lows, yet the energy prices are just starting to heat up. A survey released on December 14, 2009 showed that optimism abounds as more than two out of three investment managers believe the energy sector will experience gains in 2010.

According to the latest Russell Investment Manager Outlook, 71 percent of investment managers believe that petroluem stocks will rise this coming year.

I usually don’t agree with the money managers but in this case I think they are dead-on correct. I have never seen the fundamentals as bullish for oil as I see them now. I believe we are at the dawn of another golden age in petroluem.

My name is Jarret Wollstein and I have been covering the natural resource market for over 30 years. In all of that time I have never seen the profit-packed potential that exists in oil and gas right now. Oil has recovered to nearly $80 per barrel, more than double where it was last winter. As for natural gas, the cleanest and most efficient energy source in the world has bounced off its lows of $2.50 per thousand cubic feet (Mcf) and is pushing its way to $5.00 per Mcf.

Yet both oil and gas remain dirt cheap compared to the highs they hit just over a year ago.

In the summer of 2008 oil was selling for $147 per barrel and natural gas was fetching $12 per Mcf. That means that to just match those prices, crude would have to double and natural gas would have to rise more than three-fold.

Yet I think bigger price increases are on the horizon.

The fact is the world is addicted to oil and it’s an addiction that will not end for decades.

T. Boone Pickens recently told the Canadian TV Program, The Fifth Estate, “The world is going to find just enough oil to keep us addicted.”

Addicted yes. Cheap? Not a chance!

Oil supplies are locked in at 85 million barrels a day. But demand keeps rising. By 2019, demand will reach 90 million barrels of oil a day, and that says T. Boone, will push the price of crude four-fold higher than today’s prices.

That would put the price of oil at almost $300 per barrel.

The Cold Truth about Crude Oil

Sound crazy? Not to T. Boone and not to me after I did a few weeks of late night research. Here is what I found:

Truth #1: The total remaining conventional oil on the planet is just less than 1 trillion barrels. That is about half of the earth's original endowment.

Truth #2: The world is currently burning 85 million barrels per day. At the current rate there will be only enough oil to sustain the planet for another 30 years and that is using optimistic forecasts on future demand.

Truth #3: The oil that remains is going to be harder and more expensive to harvest. Diminished returns have been a fact of life for the oil industry for the past 40 years. During the 1950s and 1960s the discovery of an elephant oil field was the expectation. Today it is an aberration. The last elephant field discovered in North America was Prudhoe Bay back in 1967.

Truth #4: The remaining rich oil fields that exist lay under the desert landscape of the Middle East, a region embroiled in war and threatening to fall under the control of Muslim extremists. In addition to oil in the Middle East, significant oil deposits can be found on the ocean’s floor, in the Artic, and in the North Sea. Of course, all of these areas are also very difficult and expensive to work in.

All of which has renown energy author Matthew Simmons making this prediction: “We are months away from another price shock. We are not talking about three to five years away—it will be much sooner.”

According to Simmons prices are still dangerously low. “The lower prices are, the less oil will be produced and the greater the chance of an oil spike.”

Even OPEC itself is fearful of an approaching oil price tsunami. Iran’s OPEC governor Mohammad Ali Khatibi warns that oil prices could skyrocket in a few years’ time if the U.S. dollar falls further or war breaks out in the Middle East.

“If the dollar’s value continues to decrease and if the political crisis becomes worse, the oil price could reach $500,” says Khatibi.

Yes, $500 per barrel!

That is a bonanza for energy investors the likes of which has never been seen before.

Yet incredibly high oil prices don’t rule out risk. And that’s where my experience in picking winning companies with a strategic vision comes in. I have found one such company. It is America Petro Hunter (AAPH.OB).

American Petro Hunter not only employs state of the art technology, but is lead by experienced oilmen and women. It also has the three most essential assets when it comes to harvesting rich crude and free-flowing natural gas…

Location, Location, Location

With energy prices set to explode and so much angst going on in the Middle East, America’s oil and gas reserves are at a premium. And that’s where American Petro-Hunter (AAPH.OB) becomes a big time player – the kind of player that can make you rich.

Rockefeller Rides Again!

The crude truth is that we are headed for another major energy crisis. We can’t expect relief from Saudi Arabia, the North Sea, or even Iraq.

Yet there is a very old source with a lot of new oil just waiting to be pumped from the ground. I am talking about two places you might least expect -- Kansas and California.

That is correct – two of the original regions where the petroleum industry launched itself are being revisited. And what geologists are finding there are oceans of oil that have yet to be pumped!

You see, when Standard Oil and others drilled Kansas and California a century ago they were reckless in their abandon to pull oil out of ground; so reckless that they often missed massive pools of petroleum. In fact in the first half of the 20th Century, natural gas was seen as a nuisance. It was simply burned off at the well-head.

American Petro Hunter has its Sights
Set on Established Fields

Generations of oil drillers have come and gone since Standard Oil drilled the ground in two of America’s most prolific oil regions – Kansas and California.

But new technologies, 3-D seismic and horizontal drilling are revealing a treasure trove of oil and gas just waiting to be fed to a thirsting American market. And one upstart – American Petro Hunter (AAPH.OB) – is already working two of those states’ prime properties.

In fact AAPH has just struck Black Gold! Going into the New Year American Petro Hunter sunk its drills into one of the richest oil-bearing regions in the United States and hit pay-dirt!

American Petro Hunter’s efforts are in the nick of time. Unless it and companies like it begin pumping American crude, “The U.S. will be importing 90 percent of its oil by 2020 to meet even current demand,” says Colin Campbell, Oxford educated geologist and former Chairman of the Nordic American Oil Company.

The good news is that American Petro Hunter has a sniper-scope trained on two of the richest residual petroleum regions in the continental United States, Kansas and California.

 

The Only Thing the World is Pumping in Abundance is Money

In the last 3 ½ years or since 2006, M2 has grown from $6.7 trillion to $8.4 trillion! In dollar terms, M2 grew by that amount during the decade of the 1990s. The M2 graph more than any thing else shows Washington is flooding the economy with money.

Go With the Flow

Truly the trend is your friend. And right now the trend is higher prices in oil and gas and more and more money washing over the economy. The combination of excess money and the fundamental shortage of petroleum will lead to higher oil and gas prices down the road. It also means higher share prices for oil and gas stock like American Petro Hunter (AAPH.OB).


About Jarret
Wollstein…

“In 2008, my average stock pick was up by 24.7 percent -- one of the best records of any stock newsletter anywhere.”

JARRET WOLLSTEIN is editor of Intelligent Investor Report, and an editor for NewsMax.com, with over 1.5 million monthly readers. He is the author of over 40 books and Special Reports, including three national best sellers on terrorism, politics and investing.

The Intelligent Investor Report: Your guide to investing in an age of terrorism.

Every month in the Intelligent Investor Report you receive great stock recommendations -- my average 2008 pick was up 24.7 percent -- and much more.

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Jarret Wollstein, Editor


Some 2008 & 2009 Wollstein Stock Picks:

  • Fording Coal (FDG, NYSE), up 153 percent in 12 months
  • Deere & Co., (DE, NYSE), up 90 percent in just 3 months
  • Alpha Natural Resources (ANR, NYSE), up 160 percent in 5 months.
  • ABB Ltd. (ABB, NYSE), up 108 percent in 18 months
  • Bayer (BAYZF, OTC), up 76 percent in 18 months
  • HDFC Bank (HDB, NYSE), up 114 percent in 16 months
  • AK Steel Holdings (AKS, NYSE), up 63 percent in 12 months
  • Aquarius Platinum (AQPTY, OTC), up 151 percent in 18 months
  • Precisions Cast Parts (PCP, NYSE), up 120 percent in 18 months
  • iShares Brazil (EWZ, NYSE), up 87 percent in 18 months.

www.theinvestorreport.com


Lots of Leverage in Natural Gas

According to Aubrey K. McClendon, the CEO of Chesapeake Energy Corp., cheap natural gas is not here to stay.

“This will set the stage for a dramatic reversal of natural gas prices sometime this fall or winter,” says McClendon.

“How high will gas prices go in the recovery and rebound phase in the next cycle? Obviously, we don’t know. But clearly, gas prices were too high one year ago at $12 to $13 per thousand cubic feet, and today they are far too low,” he said. “So my guess is the rebound will overshoot on the high side, just as it overshot on the low side.”

The only surprise said McClendon, will be just how quickly natural gas prices shift higher.

With methane selling for 1/3rd of what it fetched over a year ago, companies like American Petro Hunter that are rich in natural gas have an enormous amount of leverage.

Higher natural gas prices will do two things to AAPH. They will vastly increase the company’s earnings and also put junior petroleum companies like it back on the map. That is a double barrel blast in a resource bull market.

They are two of the richest oil and gas states in the Union. Tens of billions of barrels have been extracted from inside their borders beginning more than a century ago. Yet back then finding and especially recovering oil from fields was a primitive exercise.

When petroleum prices crashed in the early 1980s Big Oil packed up and left some of the most plum regions in America. For nearly three decades a underground oasis of un-captured oil and gas have quietly sat in massive pools. That is until now!

New companies employing state-of-the-art technologies are continuing to harvest billions of barrels of oil and trillions of cubic feet in natural gas buried right beneath our feet. The fruition of this work will help America become energy independent and make millions of dollars for savvy investors.

And nobody is doing this work better than American Petro Hunter (AAPH.OB).

Kansas – Just Discovered Fields Mean a Monster Bonanza!

American Petro Hunter has struck it big in Kansas. It seems the fourth largest oil producing state in the Union has not yet given up all her treasures. This will be to the delight of investors who have seeded pennies and will harvest dollars in American Petro Hunter. You see AAPH has not one, but two mega projects in Kansas.

The first is a mega discovery that is putting AAPH on the map.

Petro Hunter Bags a Giant

It might not be an elephant oil field (more than a billion barrels), but American Petro Hunter’s newest trophy is definitely big game.

I am talking about the gusher found at AAPH’s Rooney oil project in southern Kansas not far from the Oklahoma border.

Third party estimates indicate, the first of 10 wells at AAPH’s Rooney project is likely to produce 250 barrels per day and hold potential reserves of half a million barrels of oil. When the other nine wells come in on target that will give American Petro Hunter 2,500 barrels of oil production per day!

Right now the industry is paying $35,000 per flowing barrel of oil per day. Given that ten wells could generate 2,500 barrels per day; that works out to an asset worth $87.5 million dollars! This property alone gives AAPH an asset that is worth four-times the company’s current market cap. It’s called a game changer and I think it will transform American Petro Hunter from a good junior oil & gas company to an important intermediate.

The oil situation could be a windfall for AAPH investors. But American Petro Hunter has even more going for it, including the exploration and production of America’s most under-priced energy asset – natural gas.

Backing it all up is the Poston Prospect in Trego County Kansas.

I am talking about the #1 Lutters well that was successfully drilled on the Poston Prospect, Trego County Kansas last spring. The well has the thing that the world thirsts for – light oil. Tests show 44 degree light oil with 65 percent oil cut. Testing indicates 10 percent gas and mud with – best of all -- no water. The well has already been cased and lodged.

The #1 Lutters well began production as a commercially viable oil well in summer 2009. Best of all, AAPH’s 750 acre lease block has the potential for a multi-well program with 2 to 3 offset locations possible to fully exploit the acreage.

Shipments of oil began in June 2009 meaning AAPH was generating revenue just four months after it hit the ground with its exploration program.

With successful offsets planned to the east and south the field could ultimately produce between 150 and 200 barrels per day.

Additional oil wells are planned for January 2010 and production estimates are bountiful.

In total there are 2 to 3 offset locations which are likely to fully exploit the acreage at Poston. Full development of the property could produce up to 400 barrels per day of light oil.

Given the excellent transportation and support infrastructure in the area, it easily supports storage facilities on site.

Both Kansas sites could produce up to 2,900 barrels per day which equals an estimated $74 million dollars in annual revenue. And that’s with oil at $70 per barrel. Since AAPH receives a 25 percent Net Working Interest from current production at the Poston site and a 50 percent Net Working Interest from current production at the Rooney site, it has potential to earn over $34 million dollars in combined revenue.

California’s New Gold Rush!

It might surprise you to know that California’s biggest export over the past century hasn’t been movies or even crude culture… just crude oil.

In 1865, only 6 years after Colonel Edwin Drake's monumental discovery in Pennsylvania, California's first productive well was drilled by the Union Matolle Company in California's Central Valley. This area, east of San Francisco, became the scene of much of the drilling activity through the rest of the 1800's.

In 1900, the state of California produced 4 million barrels. In 1910, this had jumped to 77 million barrels. In the 1920s three major fields were discovered in rapid succession - Huntington Beach, Santa Fe Springs and the biggest of them all, Long Beach Field.

In the century that followed over ten billion barrels of oil were pumped out of California. And yet something very valuable was left behind – massive reserves of natural gas. In the last 6 months American Petro Hunter has sent reconnaissance teams to comb out the best gas fields remaining in California. What they have come up with are some plumb targets, AAPH’s timing couldn’t be better.

Natural Gas Prices Finally Uncork

Before the liquidity crisis of ’08 natural gas was trading for $13 per Mcf. The ensuing recession knocked the socks off of the market and pushed the price of “clean petroleum” down to $2.50 per Mcf.

But American Petro-Hunter did their homework. They bought into California’s rich and very productive gas fields when the price was incredibly cheap. And now the company has all that leverage going for it.

My expectation is that next year natural gas prices will again be over $8.00 per Mcf, and perhaps as high as $10 per Mcf. That means that all the natural gas that AAPH has acquired and is flowing from its properties will be worth four to five times more than the acquisition costs. Now that’s leverage!

I am talking about the company’s Sacramento Gas Project.

In early 2009 with natural gas dirt cheap AAPH has acquired a 25 percent working interest in the play.

The project is located west of Modesto in the Central Valley of California, near Sacramento.

Potential Recoverable Reserves have been calculated to be an impressive 42 BCF at a depth of only 7,400 feet. Hell sometimes water wells are drilled that deep!

According to an independent third party engineering group, if the pay zone is 60-70 percent gas filled and the well is brought into commercial production an initial production rate of a whopping 5,000 Mcf per day may be achieved!

At a price of say $10 per Mcf and production of 5,000 Mcf per day, AAPH’s 25 percent interest will earn the company $8,000 per day or almost $3.5 million per year. Not bad for a company that right now has a market cap of less than $15 million!

Taken together Kansas and California could generate up to $37 million in annual revenue for AAPH. This is incredible potential for a company with a market cap of less than $15 million.

With oil & gas properties like this the company’s market cap is going to shoot up as the Street wakes up to the reality of the energy price recovery and as investors learn of the amazing potential of American Petro-Hunter (AAPH.OB).

Right now is the critical time says American Petro Hunter President Robert McIntosh.

"Our upcoming drill program in Kansas and California is the culmination of a significant preparatory effort that included the professional assessment of many highly technical engineering reports and extensive financial projections and cost-benefit analysis… Our strategic aim is to rapidly develop the means whereby the Company can generate sufficient cash flow on a monthly basis in order to fund future project costs and operations.”

“With even a modicum of success,” McIntosh believes that the chances of achieving the company’s goals are “excellent”.

That is good news, but around Wall Street good news spreads faster than methane leaking off a pump-jack. I wouldn’t be surprised if American Petro-Hunter is just about to be discovered.

If you look at the stock price chart on AAPH.OB below, you can see some people have bought in at very low prices and have made a profit.

I expect that the next price plateau is just around the corner and may well be struck this winter just as AAPH strikes pay-dirt in Kansas and California.

This incredible stock, ripe with potential and backed by bedrock fundamentals, could rise as high as $4.00, perhaps even to $6.00 per share.

I’ve seen it happen before, and my subscribers have pulled in the gusher-like profits from stocks just like American Petro Hunter.

Actionable Advice: Buy American Petro-Hunter (AAPH.OB) up to $2.50 per share. Look continually for higher prices from this stock until the energy bull has run its course. That is most likely two to three years away. Call your stockbroker today. And to learn more about this terrific company at their Web site: http://www.americanpetrohunterinc.com/.

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With 24.7% average returns in 2008 (winners and losers included) plus great editorial content, the Intelligent Investor Report will be your most valuable resource in profitable investing and building your wealth. And don’t forget the stellar pick I’ve given you today! American Petro Hunter (AAPH, OB). Get in in the groundd floor now, and you could easily double or triple your money by the end of year, turning each $1,000 you invest into $10,000+ within 12 months.

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Intelligent Investor Report