November 3, 2010

Stockportal.com

A recent article titled '' reports quotes from Deloitte's 'Oil & Gas Mergers and Acquisitions Report for Mid-Year 2010'. The article includes a map of the Continental U.S. that shows the locations of principal oil & gas fields. The article says that Deloitte's research indicates the strongest buying interest is from China, and that Chinese and Indian companies have been buying minority interests - article reading time 5 minutes.

I say: "so what else is new". I have said in many of my e-mails, and say once again, that I believe those who invest in Resource Equities can expect ongoing and escalating interest from China and other holders of U.S. debt in converting their U.S. Treasury Bills and other fiat paper to ownership of what they see as resource assets that they see as being strategic to them.

To me, the obvious such assets are agricultural related (witness the ongoing Potash play in Saskatchewan, Canada), oil and gas related - in particular I am watching for an increased number of middle-east alliances, and continuously watch the Alberta Oil Sands where about one-third of the world's known Oil reserves reside - and substantive base metals deposits, in particular copper, nickel and zinc. In many respects, I see the acquisition of minority positions in American Oil & Gas Companies by China and India as reported by Deloittes akin to the old adage of 'letting the Camel in the tent' and, from America's standpoint possibly the opening scenes of a 'death by a thousand cuts' scenario.

For what it is worth, I don't see gold and silver exploration plays as attractive strategic targets for these acquirers. I do; however, see the mid-tier and major gold producers being ever increasingly interested in acquiring gold resources in stable political areas. Interestingly, and I might be quite wrong in this, at this stage I don't see silver exploration plays as potential takeover targets to the degree I see gold exploration plays being takeover targets.

I do see 'silver streamers' (e.g. Silver Wheaton) acquiring further 'silver by-product streams' from base metals producers if and when sizeable ones become available.

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