Is United Hunter Oil & Gas Primed for a Climb?

Brittney Barrett |

With other emerging countries bidding for the same foreign oil, the price of energy in the United States has become volatile and problematic. The U.S. economy’s reliance on foreign oil has been troubling on several levels: It has pushed up inflation levels and gobbled up an out-sized portion of consumer spending. For those reasons, President Barack Obama, last month at a speech at Georgetown, announced his intentions to reduce imports of foreign oil by a third over the next decade. The US trade deficit in global goods and services in March 2011 widened 6.0 percent form the previous month to $48.18 billion as costlier crude oil imports more then offset record-high exports.

This could represent a boon for domestic oil and gas companies, a possibility that seems to be receiving more coverage of late. Yesterday, a research report highlighted California-based Zodiac Exploration Inc. (CVE: ZEX) as among the few bright spots recently in the oil and gas sector. The company, active in the San Joaquin Basin of California has been attracting more attention in anticipation of increased interest and activity in the area.

The heightened interest in Zodiac represents a shift toward greater investor awareness of oil and gas exploration in that area of the United States and has the potential to spill over into companies with similar goals and geographic locations. Among them is, United Hunter Oil and Gas (TSX: UHO), whose land package in Huasna Valley in California boasts significant oil possibilities. At present, the goals for the Huasna Project are to extract a minimum of 0.5 bbls OOIP and obtain 1000 barrels per day production capabilities. Earlier this week, United Hunter announced the completion of leasing an additional 4,983 acres at the Porter Ranch in the Hausna Basin, bringing total acreage for the project up to 9,051 and thereby expanding the productivity potential for UHO.

United Hunter’s management team has been highly active, amassing more land and tapping old wells in Alberta to infuse more cash flow. Art Halleran (formerly at Canacol Energy) and Brad Griffiths (former co-founder of GMP Securities and recently Brad through his private oil and gas company “Griffiths Energy International Inc. completed a private placement of an aggregate of 33,000,000 common shares at a price of $5.00 per common share resulting in gross proceeds to Griffiths Energy of $165 million.) are leading the project. United Hunter’s market cap of $12 million is equal to its total assets of $12 million alone, creating a situation where the stock price may be undervalued by Wall Street. Given the bevy of catalysts approaching in coming months for UHO–ranging from permissions in California, greater interest in domestic oil, production from Alberta, drilling in California and involvement in additional projects–the growth prospects for this company are very bright.

 

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