CONFIDENTIAL REPORT
1st week - September 2010

Forecast on Shareholder Profits & U.S. Oil Production:
Alamo Energy (ALME)

Advisory: Buy ALME now up to $2 before long-term 13,000% increase
New Super-Well in West Virginia signals path to $200 share-price


Summary

As stated by our 2010 U.S. Energy Policy, the highest production increases from the reactivation and development of domestic oil Super-Fields is forecast to occur in Texas, Kentucky, and West Virginia. The greatest percentage of oil-related revenue increases is forecast to be attained by junior companies drilling in these regions.

Our committee has identified Alamo Energy (ALME) to be the most advantageously positioned junior driller for the expansion of shareholder value based on 2 unique attributes:

  1. Our recommendation of ALME, currently under $1.50, is estimated to be worth over $4 per share in active oil-asset value at 10 wells


  2. Our projected buy-out of ALME at 500 wells by Exxon-Mobil is estimated to be up to $200 per share

ALME Now Under $2 Provides Instant
Oil-Asset Value Over $4 per share


*Based on Alamo’s projection of 285,000 barrels per well: 285,000 barrels x $72 per barrel x 10 wells = $205 Million ÷ 48.6 Million shares outstanding = $4.21 per ALME share

Texas, USA
Lozano Lease, Frio County, 110-acres:

Alamo Energy’s Lozano Lease comprises 3 onshore producing wells with expected production into the next decade through horizontal drilling. ALME’s lease is situated just 6 miles from the 29 Million barrel Bigfoot Oil Field discovered by Royal Dutch Shell. Also nearby Alamo’s acreage is the Yates Oil Field, which has yielded over 1.4 Billion barrels and is expected to produce another 1 Billion barrels.

Jack D. Hubbard Lease, Brown County, 453-acres:

Alamo is currently completing the Hubbard 1-H re-entry well in Brown County, Texas. This low-risk, high-yield well is validated by Schlumberger (NYSE: SLB) Triple-Combo data showing logged pay.

Nearby re-entry wells of a similar nature have yielded in excess of 800,000 mcf gas and around 30,000 bbls oil. Alamo states that further opportunities to develop the site include drilling new wells targeting the Barnett formation.

Our committee projects Alamo Energy to expand total Texas production by at least 5-fold over the next 18 to 24 months.

 

Kentucky, USA
Taylor Lease, Adair County, 55 acres:

Alamo Energy has now completed the drilling phase of its initial 5-well program on its Taylor Lease with the wells encountering hydrocarbons in the Granville, Knox, and Murfreesboro formations. Management is in the process of evaluating the wellbore data and expects to move onto the next phase of well-completion/production.

The company’s Taylor Lease is situated in the middle of a large producing oil and gas trend within the prolific Gradyville Oil Field. The Gradyville Field, which has been producing for over 40 years via hundreds of wells, is the largest oil-field in south-central Kentucky. Based on current data, management has determined that successfully drilled and completed wells on its current leasehold will produce up to 285,000 barrels of oil per well – making it a low-risk, high-yield opportunity.

Initial drilling highlights include:

No. 2 well: Encountered strong indicators of oil and gas through a 25’ interval in the Granville Formation.

No. 4 well: Drilled to target-depth through the Knox Formation with strong oil shows; video logging is currently underway.

 
ALME RISK/REWARD RATIO
Favorable Oil-Asset Factor of 2:1 to ALME shareholders
The only proven strategy to offset the risks inherent in oil-stock investing is to purchase shares below the company’s current active asset value. Alamo Energy shareholders who buy now below $2 are ensured a margin of safety during unexpected fluctuations in the general market indexes by a current ALME active asset value above $4 per share. As daily trading volume and the circulation of financial news on Alamo Energy continues to increase, the ALME share-price will command higher values from reactive buying to this current price-to-asset advantage.

Alamo Energy on pace to $200 share-price
Updated flow-rate of 16,060 barrels on new well translates to $600 Million in annual revenues at projected 500 wells

Alamo Energy occupies a core position in the reactivation of the oil and gas Super-Field in West Virginia as stated by our U.S. Energy Policy. Exploration data compiled since the 1970’s indicates statewide proved oil reserves of 23 million barrels and natural gas potential as high as 500 trillion cubic feet. Because large-scale oil and gas drilling is only now coming to this state, previously overlooked due to massive coal production, growth rates in West Virginia’s emerging oil and gas industry are expected to outpace all other U.S. regions.

Exxon Mobil has established the dominant industry presence in the state’s Appalachian Basin with its recent $41 billion investment. We project that Alamo Energy will be incentivized to expand its current 115 acres in this Exxon-dominated basin. On 29 July, Alamo announced initial flow rates of 16,060 barrels of oil, in annual terms, on its first West Virginia well and prospects to increase its active wells by up to 300%.

Upon reaching the 500-well mark, this committee believes the company can attain $600 million in annual revenues and a $200 ALME share-price.

Alamo Energy to Exxon: Realistic Acquisition Scenario
Based on Exxon’s properties surrounding Alamo, we project a buy-out of ALME

Our U.S. Energy Policy calls for increased domestic oil production and is now heavily reflected in the operational decisions of major oil companies. The common practice of brokering oil sales from foreign suppliers to American consumers should be legislated out of existence within the next 6 years. It is crucial to the United States’ national security to return to the record highs set in 1970 for daily US-based oil production of 9.5 million barrels. Currently, this number stands at 7.2 million barrels daily, and we believe this number will continue to increase as large oil companies continue to consolidate junior drillers through acquisition.
 
 

 

 

Summary of renewed U.S. Oil Industry and Value Increase for ALME:

  • Domestic production mandated to return to 1970 high point
  • Majors are no longer allowed to broker for foreign suppliers
  • Majors will reduce risk of BP-syndrome by junior acquisitions
  • Exxon-Mobil: lead major in WV Super-Field surrounding Alamo
  • Our recommendation of ALME, currently under $1.50, is estimated to be worth over $4 per share in active oil-asset value at 10 wells
  • Our projected buy-out of ALME at 500 wells by Exxon-Mobil is estimated to be up to $200 per share
We expect the ongoing well-leak disaster in the Gulf of Mexico to alter strategies in this industry. Because of the mismanagement of a single deep-water well, majors could face either nationalization or liquidation in order to cover immense environmental repair costs. One way to mitigate such catastrophic risk is by Proximity Acquisitions of junior drillers who’ve already established both the economic feasibility and operational safety of their projects.

Our committee is projecting that Exxon-Mobil will consider a Proximity Acquisition of Alamo Energy centered around both companies’ recent expansion into West Virginia.

Junior Oil Stocks Continue to Yield Our Highest Profits
Drilling and Expansion of Proven Oil Resources are Essential to Share-Price Increases

There are two events that consistently drive up share-prices of oil stocks: 1.) Drilling activations, which cause rapid share-price spikes and interim profit-taking opportunities, and 2.) the conversion of preliminary oil and gas indicators into expanding well portfolios, which result in sustained profits.

As demonstrated by our junior oil-stock track record, our proprietary selection strategy has substantially outperformed the oil and gas commodity price increases during the same trailing 10 years. Additionally, the performance of our major oil-company stock recommendations (below) has been far surpassed by our group of junior drillers’ unprecedented share-value increases as high as 13,192%.

OUR JUNIOR OIL AND GAS STOCK TRACK RECORD

We determine that select junior oil and gas stocks provide the best return potential of all investments related to petroleum. In the case of Alamo Energy, the company is expected to attract escalating market attention during this current drilling phase followed by sustained value increases as the company expands proven reserves through further drilling and property acquisitions.

Major Oil Stocks Remain Our Secondary Profit Source
Our Proprietary Land Tracking Strategy Identifies Alamo Energy as Potential
Buy-Out Target


Our proprietary selection strategies continue to outperform the industry sector indexes. Our Land Tracking strategy refers to the utilization of property acquisition patterns of majors oil companies in U.S. Super Fields to identify our next junior oil-stock recommendations.

OUR MAJOR OIL AND GAS STOCK TRACK RECORD

This committee expects our Land Tracking strategy to continue to identify top emerging junior drillers in America’s key Super-Fields. Beginning with Alamo Energy, we recommend buying shares of ALME based on its expanding operations in West Virginia and our projected Exxon-Mobil buy-out.

Alamo to Double Oil-Assets on British Mega-Project
Assurance is available to ALME shareholders based on UK oil assets

All recipients of this report are encouraged to request our augmented dossier on Alamo Energy’s Wessex-Weald project, located south of London, UK. The company controls a prospective land-based resource of up to 236 million barrels of oil and 30 billion cubic feet of natural gas on-trend with Apache’s 4 billion barrel operation. We expect this UK asset to double our current ALME value-projections as Alamo Energy commences definitive drilling. Please contact Dossier@EGAResearch.com

* * * Click to access our updated coverage on Alamo Energy (ALME) * * *
www.ContrarianPress.com/ALME
 
     

The Select Committee on Energy Intelligence referred to in this report is a component of Contrarian Press, LLC.  Also referenced therein, our U.S. Energy Policy is available upon request at info@ContrarianPress.com


1155 Camino Del Mar, Suite 545 » Del Mar, CA 92014 » Dossier@EGAResearch.com