The wildcat Willies who speculate on longshot oil wells have been walking around in a punch- drunken daze, no doubt wondering why they didn’t opt for a weekend in Las Vegas.

At least in Vegas you get to go broke with a free drink in your hand.

If you check out the matching charts of two Vancouver exploration plays, Energulf Resources (ENG-TSXV) and Gulf Shores Resources (GUL-TSXV) that sport twin Eiffel Towers, you’ll know exactly what we’re talking about.

These were two of the biggest tank jobs we’ve seen in oil and gas plays, classic pump-and-dump stocks that left many traders feeling like they’d had their pockets picked.

Many thought they’d made a killing on these two wild plays recently, but those who weren’t paying attention and got too comfortable were taken to the cleaners. Big time.

Energulf racked up almost an eight-bagger recently by spiking from 40 cents to $3.15 in a four-day span, peaking on preliminary drill results from a well in Colombia in which the company has a 25-per-cent interest.

In announcing the well had reached total depth, Energulf said the Prado #1 well indicated a potential oil column, which lit a fire under the stock. But in the next three trading days, shares in Energulf tanked from $3.15 to $1.30 on rumours before they were halted.

News that the well, operated by private Houston company Gulfsands Petroleum, had encountered water and was being abandoned whittled the shares from $1.30 to 36 cents in one day.

Shares in Gulf Shores, which has a 10-per-cent interest in the same project, followed the same form chart.

Naturally, the crapshooters who took a bath on these stocks were lighting up the chatboards and blaming the companies, their brokers, the Venture exchange and the securities commissions when they should have been taking a long, hard look in the mirror for breaking just about every rule in the traders’ book.

Here are just a few of those rules:

* If you’re going to speculate on high-risk wildcat wells, bet on a CEO with a winning resume, preferably one with a Calgary address. Vancouverites don’t know a redneck from a roughneck.

* A prospect in Innisfail is a tad safer than Colombia.

* Be wary of companies that pump the fact that their property is adjacent to properties with massive reserves (Energulf’s homepage trumpets the fact that Prado #1 is adjacent to a major discovery “estimated to have recoverable reserves in excess of 130 million barrels”).

* If a company can’t spell analysis, then it may have paralysis and may not have enough cash for a spell-check program (Energulf spells analysis ‘anyalysis’ on its homepage).

* When a speculative play runs eight-fold in four days, take some money off the table while the stock is in an uptrend.

* If you’re sitting on an eight-bagger, pay attention. It doesn’t hurt to sneak the odd quote at work when your boss isn’t watching.

* When a stock is selling off on high volume in advance of news, somebody leaked something. Cut your losses and catch the next flight to Vegas (ie. $1.30 is a heck of a lot better than 36 cents).

* Learn to swallow your pride and take a minor loss before it becomes a financial bath. Stop-loss orders work.

* Don’t take everything your broker says as gospel. He took a bigger bath than you.

* If a story seems too good to be true, it usually is.

BULL AND BEAR: While longtime bull Peter Linder, energy strategist at DeltaOne Capital Partners, has been doggedly pounding the table on commodity prices, many analysts have been turning bearish and calling for corrections in oil and natural gas prices.

At Peters & Company, small-cap analyst Andrew Boland is taking a cautious stance.

Prices “won’t crater,” according to Boland, but will drift lower in 2004. Peters & Company is forecasting $26 U.S. oil and $4.50 U.S. NYMEX natural gas prices for 2004.

That’s a far cry from Linder’s call for $30 oil and $5.50 natural gas.

Boland suggests that “only a good weatherman” with a frigid forecast has a bullish outlook.

Could he have been referring to that “weatherman” at DeltaOne?

For Boland’s top picks in the junior sector, see Pro’s 3 Stars, this week's column. His six previous Edge picks are up 92.3 per cent.



HOT ALBERTA STOCK: AMERICAN GOLD CAPITAL CORP.
AAU-TSXV $2.10
Up 95 cents (+82.6%) on 255,500 shares (for week ending Nov. 14).
Timing is everything in the market. If American Gold had announced their recent news of a purchase of a gold and silver property in Mexico a year ago, with gold under $300 U.S. per ounce, nobody would’ve noticed. But with gold threatening to crash the $400 barrier and silver riding shotgun, Vancouver-based American Gold’s shares nearly doubled on the news.



COLD ALBERTA STOCK: ENERGULF RESOURCES
ENG-TSX 37 Cents
Down $2.43 (-86.8%) on 2,829,800 shares (for week ending Nov. 14).
News that Energulf was abandoning its high-impact well in Colombia was hardly news at all, as the Vancouver company's shares began to crash before it was made official . . . Oh, it is news to you? You’re
calling from where? Fiji? What do you mean you spent the money?