Christian DeHaemer’s #1 Play For The Guyana Oil Boom

Christian DeHaemer is out with a new stock presentation..

He's hyping up a oil find in Guyana.

Christian is claiming fortunes will be made here and he has 4 stock plays that revolve around it.

The bad news?

You only get to see the stocks if you buy his newsletter.

The good news?

He left behind plenty of clues to figure out the stocks.

I reveal them below!

Let's get started..

Figuring Out The Stocks

Christian DeHaemer has declared "the mother lode" has been find.

He claims oil has been found in a country "the size of Idaho" and gains as high as 759% are possible here.

Let's see if we can find any clues in this teaser to figure out the stocks.

Guyana Oil Discovery

The teaser starts with the following quotes:

“There’s never been another opportunity like this…

“The chance to finally secure your retirement regardless of what’s happening in the markets…

“And to see gains as high as 759%… on ONE tiny stock that has gone unnoticed”

And Christian further explains:

“Exactly 2,672 miles from Wall Street…

“In a tiny, remote country the size of Idaho…

“With fewer than a million residents…

“And a GDP that’s less than $10 billion…

“An absolute miracle is unfolding…

“And it will be responsible for one of the greatest wealth transfers in human history…

“One that could allow the people populating this area to go from dirt-poor to obscenely rich —in just months.

“And investors could become wealthy right alongside them.

“Because in this remote location, an $878 BILLION oil discovery has just been made.”

The is all about Guyana.

Guyana is a former British colony, one of the countries still referred to as "The Guianas," along with French Guiana, Suriname (formerly Dutch Guiana), British Guyana, Spanish Guiana (now a part of Venezuela), and Portuguese Guiana, which is now the state of Amapá in Brazil. 

And given that Walter Raleigh first set foot in the Guianas while looking for El Dorado, I suppose it makes sense that stories of wealth have been told about this region of South America.

The Guianas, while being a relatively tiny region, were for centuries the object of an excessive amount of expeditionary desire from the major European powers, whose economy were predominated by slave-powered sugar plantations.

The former British colony of Guyana gained its independence in 1966.

Since then, it has experienced plenty of political unrest, including ethnic conflict, authoritarian regimes, natural disasters, and territorial disputes with Suriname.

However, they also discovered oil, which, if we're being completely honest, was probably the cause of some of the unrest.

Chris I Teasing A Small US Company

For many years, Guyana has led the world in fresh oil discoveries.

And this year, with Russia's invasion of Ukraine sending the energy market into a frenzy, oil (and natural gas) have undoubtedly become hot "news" once more. at least right now.

What is the stock of our Guyana oil tale now?

It appears that ExxonMobil (XOM) is the industry leader in offshore oil exploration in Guyana, and part of DeHaemer's justification for entering the country is that XOM's final investment decision from back in April committed an additional $10 billion to developing their most recent project there.

They likely have partners on some of their exploration blocks, or they are drawing enough attention to affect smaller businesses who have exploration licenses nearby, so perhaps that is what is being hinted at here.

Chris then drops this hint:

“On paper, Guyana is one of the poorest nations on Earth…

“But in just two years, it could see its income climb to heights greater than Brazil’s…

“And at the forefront of this wealth-creating force is one tiny U.S. company that has gone under the radar…

“And just recently discovered 10 billion barrels’ worth of oil.”

Furthermore Christian says the following:

“This company owns a 30% share in ExxonMobil’s largest field — a 6.6 million-acre behemoth of sweet crude. It represents potentially billions of barrels of unrisked exploration on top of the 11 billion barrels that have already been found.

“Soon there will be six floating production storage and offloading vessels on the scene. Each will produce more than $1 million of oil a day.

“This company is set to grow earnings at 25% per year for the next 10 years. Compounding this powerful means a $10,000 investment could potentially turn into $93,132. And this is a safe blue chip stock that pays a dividend.”

“The best part is over the last 36 years, the stock has gone up even when the S&P 500 has gone down. In fact, if you had invested in this stock at the beginning, you would have beaten the market by 1,200%. And that’s before it hit the mother lode.”

The stock Christian is talking about is HESS (HES).

Info About Hess

Hess is a profitable large cap US oil company.

When compared to other major US oil companies, HES is outrageously expensive (XOM is at 7.5X earnings, Occidental (OXY) is at 6X, and the average PE ratio for the XOP ETF of major oil companies is right around 6).

At first glance, it appears to be fairly inexpensive (at 14X earnings), with big earnings growth recently and likely into next year.

That may still be feasible, but it depends more on HES than ExxonMobil's accelerating production from the Staebroek block offshore Guyana.

This is probably a reasonable bet given that production is rising and new discoveries are being made; ExxonMobil stated in a press release a few months ago that they anticipate producing more than a million barrels of oil per day from this block by the end of the decade.

On the entire block, Hess is a 30% partner (XOM holds the lead with 45%, and China's CNOOC holds the remaining 25%).

As long as oil demand doesn't decline too much, Hess's claim that this is a "transformational opportunity" for them appears to be true (their break-even prices for these Stabroek projects are rather modest, in the area of $25-35/barrel for Brent Oil).

Given the growth in Guyana and their generally sound financial position, I'd even concede that HES is probably fairly valued, even at nearly twice what their counterparts sell for.

It's not an awful concept, but I haven't looked closely at their finances or just invested in a major oil company.

The Stabroek projects will likely appear progressively more attractive in comparison as Guyana auctions off new exploration blocks this year and in the future, if only because Stabroek's tax and royalty system is MUCH cheaper than Guyana will seek from new entrants.

The Next Stock Is CGX Energy And Frontera Energy

Christian starts hyping up we he calls the "#1 small cap rocket. 

Here's what he has to say about it:

“This company has been in Guyana since 2008 and has a large interest in two blocks offshore. It’s done 3D seismic surveys and started a three-well program. The company believes in these blocks and is spending $2 billion to find out how much oil is down there.

“The last time this wildcatter found a major oil deposit back in 2005, the stock price went up 1,200%. That’s the type of return that is possible in Guyana.”

Of all the stocks in this presentation this is one the I'm least certain about.. the other ones I'm 100% sure about.

But my guess is Christian is talking about CGX Energy here. He's also talking about Frontera Energy which I'm sure of.

I see no evidence of $2 billion being spent on CGX Energy's projects in Guyana.

In fact, they have already sold two of the three blocks they shared; they will soon begin drilling on a significant prospect (planned for November but delayed by equipment, apparently).

CGX and Frontera Energy (FEC.TO) are both partners in this joint venture, which Reuters reports is "anticipated to be the next consortium to move oil exploration projects in Guyana to the development phase" (ExxonMobil/Hess/CNOOC being, of course, the first).

They haven't yet found anything nearly as fascinating as ExxonMobil's findings, but it may be an intriguing one.

The fact that CGX is constructing a deepwater port in Guyana for the oil and gas industry intrigues me as well; it may turn out to be a profitable venture.

It is now valued at roughly $350 million, they are only focused on Guyana, and a lot depends on the outcomes of their next drilling operations.

Whether they will discover anything fascinating or not, however, I have no idea.

If you'd prefer a bit more subdued exposure to that, Frontera, their partner, is currently profitable, is around 3X the size of CGX, and has oil and gas projects all throughout South America.

Many additional smaller players that are also engaged in Africa are participating in Guyana or Suriname, including Kosmos (KOS), Tullow (TUWOY), and Eco-Atlantic (EOG.V, ECAOF), in addition to many major players like Equinor (EQNR), TotalEnergies (TTE), and Repsol (REPYF). And I am probably missing a few.

ATN International Is The Last Stock

Chris says this about the last stock in the presentation:

“When you are betting on Guyana to go from rags to riches, you want to own something that will benefit, like real estate or a Ferrari dealership. But instead of flying to South America and creating a business, you can just buy a proxy company. These are usually telecoms, breweries, or major retail chains.

“We’ve found a telecom that is growing at 55% a year. As the economy booms, so will telecommunication. This company is cheap. It has a price-to-sales ratio of 0.90 and a price-to-book of 1.07. It also pays a dividend of 1.74% and has a market cap of just $633 million. This stock is starting to run as the word gets out — don’t sleep on it.”

The stock he's talking about is ATN International which owns telecom businesses throughout the US and Caribbean.

With only 700,000 people and half of them lacking access to cell or internet service, Guyana is not likely to be the main driver of their results any time soon. (GTT is not normally mentioned in ATNI's quarterly updates.)

But who knows as the economy expands thanks to oil profits..

Currently, the US company generates about half of the company's revenue and receives some federal grant funding as the government works to increase rural broadband access (they have some sizable projects in Alaska, for instance), and the remaining half is split among all of their international projects, which are primarily in the Caribbean.

Additionally, they are funding the two portions of the business fairly equally.

Small wireless and wireline telecom firms can be rather lucrative cash flow investments, but they frequently don't appear profitable in GAAP accounting, partly as a result of the significant expenditures they need to make to expand their networks.

In ATNI's example, despite not being profitable, the company anticipates "adjusted EBITDA" of at least $165 million for 2022.

Like almost all telecom companies, they do have some debt, but as a result, their enterprise value (net debt plus market cap) is just around $1.1 billion, giving them an EV/EBITDA multiple of roughly 8X.

Although perhaps fair for a small telecom company, that's not exactly cheap.

Many government grants help support Georgetown, Guyana's capex to generate future cash flow, though some of those grants have been known to shrink in the past and caused stress for the country's main telecom provider.

Who knows, maybe Christian DeHaemer is right and Georgetown, Guyana will become the Dubai of northern South America in 20 years, which would likely be good news for the country.

 Not many recent stories directly relating to Guyana... but perhaps someday?

Conclusion

So that's the end of my article detailing Christian's newest stocks.

They're definitely interesting and Christian sure does know how to tell a good story.

But you're not investing in stories - you're investing in businesses.

Is this as good as Christian claims?

That's for you to decide.. I've given you all I know about these companies.

However, if you are looking for an entire portfolio of stocks I trust, I'd check out Capitalist Exploits Insider.

They have awesome drilling and natural gas stock plays.

Click below to learn more: