We are no stranger to Greencastle Resources (VGN, TSX-V). Over the past year-and-a-half, we have done extremely well with this stock with an astonishing 14 winning trades out of 15. In our Morning Market Musings yesterday we alerted readers to the fact we have been keeping a close eye on Greencastle and we felt it was an “immediate buy” on a minor pullback from Monday’s .195 close. Greencastle closed yesterday at .175 and our good fortune with this stock continued as the company announced (following the close) that it has started drilling its first well in the Boggy Lake-Cabri area of southwestern Saskatchewan.
We will have much more on Greencastle in the coming few days. From a technical perspective, this stock is clearly in an uptrend with all its moving averages in bullish alignment. At .175, this company is barely trading above its cash value so the risk-reward ratio here is extremely attractive. Fundamentally, we believe Greencastle has an excellent chance of hitting on at least some of these wells in Saskatchewan where they have a highly prospective land package (12 square miles in total) with “several potentially productive stratigraphic horizons,” according to President/CEO Tony Roodenburg. The last time Greencastle drilled in Saskatchewan they discovered the Primate oil field which has been a cash cow for them. Will the oil start gushing from Boggy Lake-Cabri and become Primate 2? The next few days and few weeks are going to be very interesting with Greencastle.
