The equity markets have turned higher just before we wrote this update. The key psychological level on the Dow Industrials at 11,000 has been broken to the upside. Call your neighbors and friends and tell them there's still hope for a new bull market.
Patina in right place at right time
Things probably can't get much better for Denver based natural gas producer Patina Oil & Gas (NYSE:POG). Recently Kerr Mcgee (NYSE:KER) offered $1.7 billion for a potential marriage with HS Resources (NYSE:HSE). What KER wanted from HSE was quick exposure to Rocky Mountain natural gas. What Denver based POG has that other energy producers might be clamoring for is natural gas reserved in the Rocky Mountain region. Just as gold speculators flocked to California for the great gold rush, many expect the same type of rush to occur for Rocky Mountain gas properties positioned in Utah, Colorado, Wyoming and New Mexico. If you believe like I do that "the charts don't lie" it looks like the MARKET believes that POG is in play as a potential takeover candidate.
Patina Oil and Gas - last eleven months
Shares of POG look like they're "in play" and perhaps rank high on the list of takeover candidates. The stock looks extended here, but a pullback to the $28 level should find buyers. Don't be surprised if this one ends up on the "Merger Monday" list some day soon. There are a lot of big players in the natural gas market that fled the Rocky Mountain region 10-years ago when natural gas prices were $2/mcf. Prices have risen substantially for natural gas since then, and I expect the ante for many to get back in the region will be expensive.