Resource Stock Update - V14 #4.3, Oil Market, PZG, UPL, WND, SNG, CLL. OIL, PEG, DPTR, HAL, VLCCF, TLM, ROH, TEX.A, COGC, BKS, DVT    

  - May, 12, 2008

PO Box 1020  Owen Sound, Ontario, Canada   N4K 6H6

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                                            Markets

I am seeing some very positive signs in the resource markets. Finally the oil and gas stocks have
come alive, although the metals/mining are still spotty and sluggish in some areas, especially the
juniors they will soon be next to revive.

The TSX Venture Index has climbed about 85 points, just over 3% since my May 1st prediction of a
bottom, but oil&gas stocks have taken off.

Just like the junior mining stocks on the TSX Venture, the oil&gas stocks as measured by the TSX
Energy index have been stuck in a sideways pattern or consolidation for a very long period of over 2 years, while in the mean time oil went from $60 to $100.

Weekly Oil chart   http://www.tfc-charts.w2d.com/chart/CO/W

The market in oil&gas stocks was in denial and disbelief for a long time, just like the market in
mining stocks that still is in denial about $1,000 gold.

TSX Energy Index Chart

Natural Gas was a drag on some stocks, but natural gas prices broke out to the upside back in
February, and oil prices were trading between $100 and $105 a barrel from mid February to early
April, but still the oil&gas stocks failed to react. It was like investors were in shock and denial.
It seems that it took oil to go over $110 with talk of $200 and Natural Gas to stay strong before
investors finally seen the bargain in oil&gas stocks that were staring them in the face or should I
say kept beating them over the head.

Oil chart  http://www.tfc-charts.w2d.com/chart/CO/68

Finally as you can see from the chart of the TSX Energy Index, the stocks finally broke out and are
on a tear, up about 20% since early April, and I expect they will go a lot higher. In the 2004 to
2005 run the energy index climbed about 130%

Before I get into an update on our energy stocks, There was some action in Paramount and I had some
email questions

Paramount Gold&Silver   TSX, Amex:PGZ                Recent Price C$1.50
Entry Price $1.00                     Opinion - strong buy

I could talk about the fundamentals but basically they are all proceeding very well with a new
resource number expected in June, so I am going to focus on the stock action, because it has been
strange.

The stock got hammered last Thursday in a panic. I suspect this is a good sign of a bottom, just
like what happened back in March when the stock was halted and came back. At that time we seen a
panic one day that drove it as low as $1.15, it then went on to recover back up to almost $2.00
before the recent DTC fiasco.

This time, last Thursday, the intraday low was $1.16, within a penny

The stock has been trading in the $1.50s in the last couple days. There still is an aggressive
seller in market and it all comes out of house 'Anonymous', so they can conceal there identity.

Since March, the activity through Anonymous has really picked up and now represents about half of
the trading volume in Toronto. There has also been a lot of strange market activity, iceberg offers
that conceal the number of shares really been offered for sale. A lot of buy orders with special
terms that do not show up as a bid. For some reason, somebody is trying to influence the market, I
suspect short selling or a large short position, because the influence is almost always on the
downside. It could also be someone trying to accumulate stock cheap. I did hear that there was a
large shareholder out of Bear Sterns that was liquidating. Remember this is the firm that went under
and the seller is probably selling because of cash conditions or credit risks, if there is any truth
to this story.

However, the selling does not look like somebody trying to sell for the best price or even to
liquidate. Most often small sell orders go through from anonymous, like 100, 200 or 300 shares to
knock the price down. But there could be a bid there of 5 or 10,000. A real seller that had to
liquidate would sell with a much larger trade.

Perhaps the selling is being done because a financing is being anticipated with the Mexoro
acquisition and market players are looking for a cheap financing.

Most of buying has been coming from CIBC, TD, Blackmont, Desjardins, UBS and RBC

The only other consistent selling has been out of Haywood, but has just been a little at a time that
really does not disrupt the market, it looks like a normal seller.

Whatever the case may be, this is just short term noise and at sometime in the near future the
selling will give way to buying and we will be heading back up. In the long term it is going to be
the amount of ounces proven up and the economics to mine it that will value the stock and that could
be multiples of where we are today.

Investor Relations: Chris Halkai
Tel: 1-613-226-9881
Toll-free: 1-866-481-2233

Website - http://www.paramountgold.com

http://www.stockhouse.com/comp_info.asp?symbol=PGZ&table=LIST

                                                   Oil&Gas Stocks

The Energizer Bunny just keeps on going

For new subscribers, I am referring to

Ultra Petroleum           NY:UPL                     Recent Price US$86.00
Entry Price $0.50                           Opinion - hold

The stock hit new all time highs in the past week of $91 as Ultra reported record production, cash
flow and earnings once again. Production in the first quarter 2008 increased 31 percent to 34.1
billion cubic feet equivalent (Bcfe).

Continue to hold long term positions, production, earnings and the stock price will continue to hit
records and I would not be surprised to soon see another stock split

http://www.stockhouse.com/comp_info.asp?symbol=UPL&table=LIST

Western Wind     TSXV:WND                  Recent Price C$2.50
Entry Price $1.94                       Opinion - strong buy

After my last update, the stock ran all the way to $3.00 and came all the way back down to major
support around $2.15 to $2.15. It bounced off this and broke out higher again on Friday. The rumors
I am hearing is that big news is coming this week. I suspect on their development financing with a
nice up front developer profit. I expect the stock could run up to $4.00 or higher in this next move
up.

http://www.stockhouse.com/comp_info.asp?symbol=WND&table=LIST

Canadian Superior         TSX:SNG               Recent Price $C3.65
Entry Price $3.70                         Opinion - strong buy

After selling off from a high of $4.00 earlier in the year the stock had quite a pop last week. They
are drilling a big target and it looks like it’s finally created a little interest in the market. I
am talking about the Bounty well offshore Trinidad that SNG along with partners BG International and
Challenger Energy are drilling. This is about 2 1/2 miles from the recently announced successful
Victory well that Canadian Superior announced some time ago and this area of Trinidad is providing
an awful lot of successful wells for companies over the last while.

The Bounty as of last Tuesday morning, was at 13,912 feet sub-sea, on its way to a target of 18,000
feet. It was originally scheduled to drill 110 days, currently on about its 86th day. So it is going
to be a few more weeks before we find out whether it’s a goodie or not. The market is telling us
that it is going to be good. An excellent analyst is Josef Schachter and SNG is his favorite pick
for this coming month. Josef Schachter is president of Schachter Asset Management of Calgary and
provides research to other firms such as Maison Placements Canada.

Investor Relations (403) 294-1411
(403) 216-2374 (FAX)

Website: http://www.cansup.com

http://www.stockhouse.com/comp_info.asp?symbol=SNG&table=LIST

Connacher Oil and Gas      TSX:CLL              Recent Price C$4.45
Entry Price $0.60                      Opinion - hold

When I last updated SNG, Connacher was at $3.00 and I suggested it was still a good buy.

It seems like that was not long ago, the stock was plunging and got as low as $2.70 intraday as
markets around the world were getting battered, despite oil prices rocketing and despite Connacher’s
production heading upwards.

According to a Cannacord report, Gusella of Connacher has maintained that their time frame was
always mid-year for approval on their second Pod on the Great Divide project, but all the paperwork
has to be done, the regulators are busy and of course, they want it done right. He says that the
SAGD projects have never been disallowed, it’s simply that regulators want it done right. Gusella
adds that they’ve lined up many contracts and have pre-built some sections when the second Pod gets
the okay, but they still need government approval to proceed. It looks like the stock is trying to
break above it's 2 year sideways consolidation between $3.00 and $4.60. We need to see a break
through the $4.75 level, but once through there, it should go a lot higher.

http://www.stockhouse.com/comp_info.asp?symbol=CLL&table=LIST

Oilexco                   TSX:OIL               Recent Price C$16.75
Entry Price   $0.86                                           Opinion - hold

Oilexco has moved up nicely since my February update and even at today's price Oilexco is one of the
cheapest oil plays in the North Sea and elsewhere. They have a low cost structure and  an excellent
position to further develop its prospects and cash flows. With 25,000 barrels of oil per day of
productive capacity now established from the Brenda-Nicol and Balmoral fields, Oilexco will continue
to organically grow their production base as they bring additional discoveries onstream.

As I recently read elsewhere, Oilexco's well-balanced portfolio of development, appraisal and
exploration opportunities make it the "go-to" name when it comes to oil exploration and production
in the U.K. North Sea.

Phone (403)262-5441

www.oilexco.com

http://www.stockhouse.com/comp_info.asp?symbol=OIL&table=LIST

Pacific Rubiales Energy        TSX:PEG           Recent Price  C$11.70
Entry Price $2.58                           Opinion - hold

PEG rolled back their stock 6 for one as of Friday and the stock took a big jump higher on this
development. Normally there is not a lot of change, but perhaps the higher share price qualified the
stock as a buy for a greater number of institutions and funds.

So I adjusted our buy price by six times from $0.43 to $2.58

On April 19, 2008, the company achieved a new production record for its Rubiales field of 31,774
barrels of oil per day (gross). This continues the company's ambitious march to achieve 126,000
barrels of oil per day by the fourth quarter of 2009. This new production record represents an
almost 100-per-cent increase in production in the last 12 months, and the continuous improvement in
production reinforces the company's commitment to successfully develop the Rubiales field to its
full potential.

As long as production is heading much higher, we should continue to hold the stock for higher prices

Website  - http://www.petrorubiales.com

http://www.stockhouse.com/comp_info.asp?symbol=PEG&table=LIST

Delta Petroleum   Nasdaq:DPTR               Recent Price -US$23.40
Entry Price $19.38                Opinion - hold

Delta has recently hit a new high of $27.98 and could go a lot higher this year.

Production from continuing operations increased 68% from first quarter 2007 levels. Estimated proved
reserves increased 60% to 603 billion cubic feet equivalents (Bcfe) at March 31, 2008, compared with
376 Bcfe at year- end 2007. Discretionary cash flow increased 84% from prior-year period to $30.8
million.

We originally bought Delta for the huge exploration potential they have in the Columbia River
Basin(100%) and the Utah Hingeline project. Fortunately they have been doing well in other areas
because progress and success in these two plays has been slow coming.

However, Delta has begun moving DHS rig #7 to the Columbia River Basin to spud the Gray 31-23 well
at the Bronco Prospect that represents multi-Tcfe potential. Delta anticipates that a well to test a
structure in the Hingeline project should be approved for drilling in the third quarter.

So the best news may still be ahead of us. Even without success here, Delta is projecting production
increases this year between 40% and 60%

http://www.stockhouse.com/comp_info.asp?symbol=DPTR&table=LIST

The energy stocks in the Millennium index have also seen big increases.
Haliburton HAL up US$10 or over 20%
Royal Dutch RDS.B up US$10 or about 15%
Knightsbridge Tankers VLCCF up US$6 or 30%

Our newest pick here Talisman Energy - TLM dropped as low as C$15.50 after we bought it around
C$17.80. The stock has jumped a lot higher in the past few weeks to over $23. The stock has jumped
about 50% since the late March bottom.

All of our senior and mid size energy stocks have seen big gains in the last few weeks. However,
many of the juniors on our list are still down and looking weak. I will just make a few comments on
each of them

Rochester Energy  TSXV:ROH                    Recent Price C$0.19
Entry Price $0.60                    Opinion - buy, average down

As I mentioned earlier, between the credit crisis and a flow through financing that came free
trading, the stock has been beaten up. It looks like it has found a bottom here, so now would be a
good time to buy and average down. I don't think there is much of a rush. It sounds like they will
not do much more work on the project until January 2009.

In the meantime Rochester has engaged Ryder Scott Canada to provide an engineering update on the
Christina project incorporating this past winter's drilling results. To date, Rochester has drilled
nine wells at Christina with discoveries varying in net continuous pay from 5.5 metres to 21.5
metres.

Better markets and a positive report from Ryder should help the stock recover further.

"This first winter's drilling results are very encouraging for a cyclic steam stimulation (CSS),
SAGD or a THAI process," said Rochester chairman and chief executive officer, Troy Mochoruk.

Troy Mochoruk - CEO  Phone: (403) 618-8989

- http://www.rochesterenergy.com

http://www.stockhouse.com/comp_info.asp?symbol=ROH&table=LIST

Texalta Petroleum           TSXV:TEX.A             Recent Price C$0.42
Entry Price $0.20                   Opinion - hold

Texalta has done better and recently was up around $0.50.

They are drilling an additional leg to a horizontal well at West Queensdale in Saskatchewan and then
will move the rig to Wordsworth to commence the drilling of a Mississippian (Alida) horizontal well.

The stock jumped on a news release that Texalta holds a 47.5-per-cent working interest in 2,000
acres of prospective Bakken rights located below the prolific Mississippian (Alida) pool at
Wordsworth, Saskatchewan.

The Bakken has become the hottest play in Western Canada,

http://www.canada.com/saskatoonstarphoenix/news/local/story.html?id=5f07f6b9-815f-4058-9e25-17fb0c61cd61

http://www.stockhouse.com/comp_info.asp?symbol=TEX.A&table=LIST

California Oil and Gas   Nasdaq:COGC          Recent Price US$0.10
Entry Price $1.80                        Opinion - hold

COGC has been killed since the credit crisis started in August, just as the stock was in a rally. I
expect it could easily recover to $0.30 - $0.40 range on some good news.

They did announce a Letter of Intent with Consolidated Beacon Resources Ltd. ("Beacon") in January
to acquire the majority of their assets in the San Joaquin basin in Southern California for a
combination of cash, COGC common shares and warrants.

This acquisition will increase COGC's interest in the Bakersfield area of the San Joaquin Basin.
Included in the acquisition are interests in oil and gas leases within the 35.2 square mile seismic
survey recently completed with partners in the East Slopes Project.

The have not announced whether they closed this acquisition and would like to see news that they are
spudding wells before deciding to buy any more stock. The prospect looks very good and remember,
Chevron has agreed to fund 100% of the cost of a 3-D Seismic Survey to earn a 50% interest in the
approximately 19,000 acres of leases contributed to the Area of Mutual Interest, Chevron also
contributed 3,000 acres to the AMI.

http://www.stockhouse.com/comp_info.asp?symbol=COGC&table=LIST

Berkley Resources   TSXV:BKS                Recent Price C$0.20
Entry Price $1.06                       Opinion - hold

The permitting to drill their Crossfield prospect is taking forever and I think this is the main
reason the stock has not bounced back at all after a sell off on low volume.

The Crossfield prospect is located a short distance west of the major Crossfield sour gas field
which has estimated reserves of 1.6 trillion cubic feet.

They did sell their Real Estate holdings in Vancouver last year for $4 million and at a good time,
at or near the market peak.

We need to see them get the drill permits before the stock becomes a good buy

http://www.stockhouse.com/comp_info.asp?symbol=BKS&table=LIST

Divestco Inc.           TSXV:DVT             Recent Price C$2.70
Entry Price $2.60                     Opinion - buy on weakness

Divestco is an excellent oil&gas service company that is having great success and there is no reason
other than the current market conditions/credit crisis for the stock to be so cheap. At $2.70 it has
moved up quite a bit from the recent low but is selling for just two times cash flow. We normally
see multiples of 5 to 10 times cash flow.

They earned $0.45 per share in 2007, so is only trading at 6 times trailing earnings and it looks
like cash flow and earnings is heading higher for 2008 with better exploration activity expected in
Western Canada.

Last week, DVT  released its operating results for the three months ended March 31, 2008. Divestco
generated revenue of $30.1-million for the first quarter of 2008, an increase of $3.3-million (12
per cent) from $26.8-million for the same period in 2007. Earnings before interest, taxes and
amortization (EBITDA) were $16.3-million, a $3.5-million (28-per-cent) increase over the same period
in 2007. The company generated funds from operations of $14.1-million (32 cents per share --
diluted) for the first quarter, an increase of $8.4-million (148 per cent) as compared with
$5.7-million (15 cents per share -- diluted) for the same period in 2007.

http://www.stockhouse.com/comp_info.asp?symbol=DVT&table=LIST

(c) Copyright 2008, Struther's Resource Stock Report

All forecasts and recommendations are based on opinion. Markets change direction with consensus
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