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The $0.64 Company Sitting on $49 Billion Worth of Oil

Written By Christian DeHaemer

Posted April 21, 2010

Untouched for 57 years, this $0.64 cent company is sitting on $49 billion worth of oil… And you stand to make 55 times your money from one of history’s greatest oddities.

Joseph Stalin is regarded by many historians as the most horrific mass murderer of all time. He killed an estimated 20 million of his own generals, intellectuals, and serfs in his great purges.

He starved 10 million Ukrainians to death by sealing the border during a famine, and he sent more millions to the Gulags.

But there is one thing that Stalin did before he lay alone, dying on his bedroom floor in 1953…

And this oddity of history — this strange circumstance of cosmic luck — means that you, as a capitalist, have the opportunity to make up to 55 times your money off the evil folly of Joseph Stalin.

Assets Ignored

In the post World War II period, Mongolia was a puppet state of the Russians.

I recently uncovered this letter from Stalin to the Mongolian despot Tshoibalsan:

To the Prime Minister of the Mongolian People’s Republic, Marshal Tshoibalsan. I thank you, and in your person, the government of the Mongolian People’s Republic for the warm congratulations on the third anniversary of the Treaty of Friendship and Support concluded between our countries.

                                               — J. STALIN

The strange thing is that even though the Soviets knew that Mongolia contained vast amounts of mineral and oil wealth, they inexplicably ignored it.

Stalin owned Mongolia. He executed a Prime Minister in Moscow for not following orders. He trained the next leader, Tshoibalsan, in his own image.

Why, then, would Stalin order his Mongolian puppet to run purges of his own and destroy all Buddhist monasteries in the country… but spare a vast amount of oil?

Just How Much Oil?

The current Prime Minister claims there are more than six billion barrels of oil in his country.

A recent three-year study published by the Journal of Petroleum Geology and supported by Mongol Petroleum Co. speculates “three to six billion brls oil-equivalent (o.e.) of conventional recoverable oil and gas resources within the territory of Mongolia is a reasonable expectation.”

Six billion barrels is a lot of oil.

And while it’s not the famed 75 billion barrels in the Ghawar field in Saudi Arabia, it hasn’t been rode hard since 1951, either.

In fact it’s untouched, shallow, under-sand, and on land that’s easily accessible.

To put this oil amount in perspective, Mongolian oil is roughly equal to the Tupi oil field in Brazil.  You may know it as the largest oil discovery in the Western Hemisphere in the last 30 years.

The 2006 discovery of the Tupi field turned Brazil into an emerging global oil power. Brazilian President Luiz Inacio Lula da Silva went so far as to dub the Tupi field “a second independence for Brazil.”

Brazil’s largest oil company — Petrobras (NYSE: PBR) — went on a rampage, rising 1,400%:



PBR now has a market cap of $189 billion!

And the Tupi field isn’t even that great… not compared to others.

Sure it has a lot of oil; but it lies 7,020 feet under water.

And once you get past that, you have to drill through another 6,600 feet of a hardened salt and 16,000 feet of sand and rocks — a project that won’t be easy or cheap. 

And yet Petrobras says that Tupi “is comparable to the most important [oil fields] in the world.”

To give another example, Norway — a country that has one of the highest standards of living in the world, based on oil profits — has 8.5 billion barrels of proved reserves.

Six billion barrels is a lot of oil, and if you are a country of three million people and have an annual GDP of only six billion, that amountn of oil has the power to change history.

In ten years — maybe less — Mongolia is slated to be the United Arab Emirates of Central Asia.

Stalin’s Failure

The details of the secret deal that went down in the Kremlin over five decades ago have since been lost in the pages of time. 

The mystery still begs questions from historians and investors alike…

Did the Soviets think they needed a buffer from China?

Was it better to develop its own oil in Siberia?

Did they need Mongolia as a market?

Was the oil involved with the Yalta trade that gave inner-Mongolia to China?

We don’t know. We may never.

What I do know is that Stalin chose to leave the natural resources fallow for 57 years. And surprisingly, to this day, Mongolia imports 90% of its oil from Russia.

That’s insane, of course, but it won’t last. The situation is changing rapidly.

The country recently got ten bids on a new refinery. There are also Chinese companies successfully pumping oil out of North-West Mongolia.

But there is one tiny company that most people have never heard of that is sitting on 638 million barrels of oil.

My readers have already made 129% gains from this company in the past three months. And this massive profit run is just getting started…

This company is one of — if not the — cheapest stock I’ve ever found. But the word is starting to leak on this company, and its stock is only going to go up.

Right now the market value of this company is $80 million U.S…. But the value of its 638 million barrels, at $80 a barrel, equals $51 billion!

Grossly Undervalued

To put this in perspective, let’s compare it to Anadarko Petroleum Corporation (APC). According to SEC filings, Anadarko had 2.3 billion barrels of oil equivalent (BBOE) of proved reserves at year-end 2009. (Click here for a more update report on Anadarko Petroleum’s filings.)

The company has a market capitalization of $35.79 billion. (As you know, a market capitalization is the “total market value” of a company. You get this number by multiplying the number shares by the share price.)

Anadarko has $184 billion worth of oil at $80 a barrel. In other words, its reserves are valued at 5.3 times what the stock market values the company.

This Mongolian oil company I’m talking about would have to go up by 612.5 times to equal the value of its oil reserves.   

So to be fairly valued in relation to Anadarko, it would have a market capitalization of $10.2 billion. Its market capitalization now is only $80 million. 

The upside on this is so large… I’m not going to even do the math. The number would seem unbelievable.

And the company has two more large exploration blocks that it hasn’t even gotten serious about yet!

At this point, you can probably see why it’s my favorite stock — one you can’t afford to pass up.

Don’t kick yourself next month when it doubles again. Read my free report now!

Until next time,

Christian DeHaemer
Wealth Daily

P.S. My good friend Ian Cooper has been pounding his chest about how much money his readers are making on a small set of companies that benefit from home foreclosures.  It’s an undeniable trend. According to Business Week, “Home foreclosures this year are on course to exceed the 2.8 million initiated in 2009, with more than 932,000 filings during the first three months.”

Ian has found three companies… each of which make money off every foreclosure.  Their stocks are starting to move — and fast. Read more about them here