Of course, we wouldn’t be
Taipan if we weren’t able to turn
this situation into an exceptional
profit opportunity.       Based in Texas, Patterson-UTI
Energy Inc (PTEN:NASDAQ) is a lead-
ing oil drilling company, boasting 263
operational rigs (up 15% during the
first quarter) throughout Texas,
Colorado, Utah, Oklahoma,
Mississippi, New Mexico, Wyoming,
and parts of Canada, including
Alberta and British Columbia. The
company expects 30 more rigs to
become operational this year.       Companies like Patterson are
instrumental in uncovering new
domestic oil reserves—and you don’t
need me to tell you what a lucrative
business that is right now. Witness
the company’s first-quarter perform-
ance, where pent-up demand for
drilling operations resulted in a huge
60% surge in first-quarter revenues to
US$350.6 million, compared with Q1
2004. That was almost double the
industry average, and followed
US$1.1 billion in revenues in 2004
(US$6.65 per share). It also meant net income soared a remarkable 188%
(US$59.7 million or 35 cents per
share, versus US$20.7 million or 12
cents per share during Q1 2004).       With existing oil production
reserves declining, demand is set to
continue for the foreseeable future.
Several Middle Eastern countries are already hustling to build new rigs.
And it’s exactly this kind of tight sup-
ply and strong demand at home and
abroad that should continue to gener-
ate plenty of profitable opportunities.       Think about it. Just one year ago
oil prices sat comfortably below
US$40 per barrel. Today’s scenario, COMPANY BUY BUY STATUS CURRENT GAINS DATE PRICE PRICE/ TAKEN EXIT PRICE KCS ENERGY 4/4/2003 $2.57 CLOSED $10.43 306% (KCS:NYSE) (3/16/2004) PETROCHINA 1/1/2002 $18.25 CLOSED $50.83 179% (PTR:NYSE) (1/14/2004) CHINA      1/28/2002 $13.75 CLOSED $20.00 45% PETROLEUM & (4/30/2003) CHEMICAL CORP
(SNP:NYSE) PETROQUEST 7/1/2004 $4.26 OPEN $5.63 32% (PQUE:NASDAQ) SUNCOR ENERGY 8/31/2004 $27.80 OPEN $36.44 31% (SU:NYSE) Editor’s Note: Cashing in on energy stocks is nothing new forTaipan.
Here’s a quick glance at the recent gains we’ve scooped up on some of
our other oil plays. Next page … Think drilling is dull? With supply tight and
demand strong, let this thriving, undervalued
company liven up your portfolio 5 S T R A T E G I C   W E A L T H By Martin Denholm the first week of May, as prices rose
about US$1.50 per barrel.       On May 10, light crude futures for
June were up to US$52.75. The 38.2%
retracement line of the smaller
Fibonnacci might have presented
some resistance, which is probably
why we saw a recent drop in price to
nearly US$48. But this summer has
the potential to rival record highs
posted in April. Thereafter, winter
could see prices hit US$60.       With foreign oil production reach-
ing capacity, America continues to hunt for other ways to top up its
reserves. That includes building more
refineries, tapping into offshore oil,
and exploring new technologies and
renewable energies that make us less
reliant on foreign oil.       That won’t do anything to alleviate
this year’s price increases. But it could
provide many investment opportuni-
ties in domestic drilling and renew-
able energy technology. Moreover, I
think domestic drilling will see a
good-sized lift from the Energy Policy
Act of 2005, which is shuffling its way
through Congress towards George Bush’s desk. That’s because one of the
act’s main components encourages
the development of domestic energy
supplies on federal lands.       OPEC meets again on June 15,
and you’d better believe that if oil
prices remain below US$50, produc-
tion will be cut. And that will inject a
little more fear into the mix.  Which
could spark a surge in domestic
exploration.       Sara Nunnally is a technical ana-
lyst at the WaveStrength investment
group. ¦ www.taipanonline.com