How ​West Texas Resources is Positioned to Win in the Prospective Bull Market

Patrick A. Howell  |

Patrick Howell (left) and William Sawyer (right)

Patrick Howell shares his golf-side conversation with WTXR’s new CEO William A. Sawyer at La Costa Omni in Carlsbad, which proves insightful and timely.

With the US Presidential election decided, uncertainty seems to have priced itself out of the market — United States of Capitalism, right? Even volatility likes to play dress up, though. Undoubtedly, institutional investments in small-cap and mid-cap companies will position the markets and indexes for long-term growth. President-Elect Trump has made trade, commerce and energy hallmarks of his domestic job creation and energy policies with signature cabinet appointments. And when I say Energy, I’m not talking about wind and solar.

Along with those changing winds will come the legislative easing of Dodd-Frank financial regulations and EPA regulations that were hallmarks of the Obama era. These prospective repeals bode well if not bullish for the USA oil and gas industry. Further, the Trump campaign pledges of rebuilding American infrastructure, also bode bullish for domestic oil and gas companies as building materials for roads, bridges and buildings are heavily reliant upon diesel and petroleum products. Donald is going to be Ronald on steroids. Reagan, that is.

On May 23, Energy Hunter Resources CEO Gary Evans said on CNBC of the energy market, “We’ll never see an opportunity like this again.” When asked why, he said, “Things are so bad.” Well, not only has oil topped $50 per barrel but new Geological surveys show emerging growth companies as Denbury Resource (DNR), Barron Energy (BROE), Lucas Energy (LEI) and West Texas Resources (WTXR), might be positioned for exceptional growth prospects.

The November 2016 U.S. Geological Survey reported 20 billion barrels of oil in the West Texas formation, known as the Wolfcamp Shale, noting, “The estimate of continuous oil in the Midland Basin Wolfcamp Shale assessment is nearly three times larger than that of the 2013 USGS Bakken-Three Forks resource assessment, making this the largest estimated continuous oil accumulation that USGS has assessed in the United States to date.”

U.S. Geological Survey further reports, “However, more recently, oil and gas companies have been using horizontal drilling and hydraulic fracturing, and more than 3,000 horizontal wells have been drilled and completed in the Midland Basin Wolfcamp section.”

William A. Sawyer, author of Moving from David to Goliath in the Micro-Cap Public Market, also former CEO of Lucas Energy also believes there are opportunities in the emerging growth and small-cap sector.

“You’re looking at a time where oil is $45 per barrel,” Sawyer said. “When oil was $30 a barrel, we made money at Lucas Energy from 2005 to 2007. We made money. First of all, it is the philosophy you don’t wait until oil is $100 per barrel to invest. You invest when it is low. Second of all, we look for things that nobody else wants because that’s the key. You don’t want to chase what everybody else is chasing. We look for things that nobody else wants. We look for older properties where we can refurbish the wells and improve production a little bit, not a whole lot. But there is an underlying value in there.”

In his book Moving from David to Goliath in the Micro-Cap Public Market, Sawyer notes value added purchases as well as talented key personnel as the recipe for unlocking a company’s value.

“For instance, when we started Lucas, for the first three years, we went into the Austin Chalk formation and Gonzales County and around that area. Nobody wanted it. Well, low and behold, we thought that the upside would be the Budda Limestone. Nobody realized the Eagle Ford was under there. We had four wells we logged. We found out that the Eagle Ford was not like the typical shale. The typical shale is approximately 70% shale and 30% or less sandstone or limestone. So it doesn’t have a large capacity for holding oil and gas. You can manufacture it. So, we logged these wells and found that the Eagle Ford was 70% coarse limestone and 30% shale, which means that it has a big capacity for holding hydrocarbons, and all of a sudden, it just took off. That was 2010.”

Sawyers expertise in the small cap market, specifically within the niche of oil and gas is what encouraged the board of directors to secure his management for West Texas Resources. Under his stewardship, Lucas Energy went from $0.44 per share to $5.25 per share. The market cap went from $3 million to a high of $40 million. The float went from a low of 2 million shares to 19 million shares.

Sawyers added, “In late February 2010, somehow Cramer (CNBC’s Mad Money) got a hold of us and he published this report ‘Microcap Energy stocks are the place to be’ and we were at the top of the list. We traded 78 million shares in four days, [and] 25 million in one of those days. Our stock went from nearly $3 to $5.25.”

Sawyer became CEO of West Texas Resources on October 19th 2016. It looks like he has a blueprint for success and is taking a steady measured walk to those ends. Aside from fundamental and technical analysis, tenured management, after all, is an unquantifiable asset that prices itself into stock appreciation… exponentially.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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Symbol Name Price Change % Volume
LEI Defined Japan Index n/a n/a n/a n/a
DNR Denbury Resources Inc. 0.75 0.02 3.35 14,918,267 Trade
BROE Baron Energy Inc 0.01 0.00 36.49 13,500
WTXR West Texas Resources Inc 0.10 0.00 0.00 0

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