October 16, 1997

Bonus Resource Services Corp (BOU on TSE, VSE), Calgary, AB. Tel: (403) 263-6777. Price: Oct 15/97: $7.30, 52-week range: $7.75-0.80. First mentioned at $0.76 on May 15/96. With the

recent acquisition of Beta Well Service, the company operates a fleet of 125 service rigs and six swabbing units, a workforce in excess of 750 employees. To support this growth, Bonus raised $46 million through the sale of 8 million shares at $5.75/sh. and in the course of doing so the company has picked up solid investment banking sponsorship. In addition, the Company has secured $47 million of long term financing consisting of $35 million 10-year term facility at 7.91% and $12 million 10-year at floating rate. The oil patch, particularily in Western Canada, is going through a vigorous period. This newsletter is raising its stock price scenario to a higher level, from $7.50 to $10 over the next year.

Calvalley Petroleum Inc. (CVI.A on ME) Calgary AB Tel:(403) 297-0490. Price Oct 15/97: $2.05 52 week range: $2.99-1.47. First mentioned at $2.90 on Feb 14/97 at $2.90. Company appears to have made a light-oil discovery in the Rainbow/Zama area of NW Alberta and has been adding to its acreage there, now 87,720 acres. Company expects to exit fiscal 1998 at a domestic production level of 2,400 b.o.e.d. compared with 1997's average of 905. On the international front, Calvalley expects to drill 2 exploratory wells on its 1.2 million acre block in Central Yemen. Could be a sleeper.


Ensign Resource Services Group (ESI on TSE) Calgary AB Tel:(403) 262-1361. Price October 15/97: $53 52 week range:$57.00-17.50. Mentioned at $8.50 on Feb 15/96. A factor in servicing the oil patch industry. Company reported strong earnings for the 6-months ended June 30/97 of $1.19/sh vs $0.48/sh last year. However at these prices, the stock has exceeded all near term targets, and it is take a walk time.

Golden Knight Resources Inc. (GKR on TSE, ME & VSE) Vancouver, BC Tel:(604) 689-3846. Price Oct 15/97: $4.05. 52 week range:$9.25-2.25. Mentioned at $8.20 on May 15/96. Mainly into West Africa through acquisition & exploration of gold properties after closure and write-off of Quebec producer. The Company's 17% interest in the Tarkwa gold mine in Ghana should take on considerably more value when revised reserves are announced, beyond the 13 million ounces. Meanwhile, GKR is involved in what appears to be a new base-metal discovery in the Timmins, Ontario area, where the company is earning a 60% interest in a 102 sq.km.property. The share price appears substantially undervalued, with a near-term target of $6.50

Goldcorp Inc (G.A and G.B on TSE &ME: GG.A & GG.B on NYSE) Toronto ON Tel:(416) 865-0326. Price Oct.15/97 : $ 52 week price range:$12.80-7.50. First mentioned at $8.75 on Jan 15/96 (adjusted for 2 for 1 split). Although high grade gold continues to be discovered at depth, the Company's Red Lake mine is still on strike and a settlement in the short term appears unlikely. Furthermore, with lower gold prices, cash flow estimates for 1999, if labour problems are solved by then, appear to be in the $40 million/yr range, or 50 cents/sh based on 80 million shs out. Using a 20 times multiple leads to a share price of $10, making the stock at current levels unattractive.

Major Drilling Group International Inc. (MDI on TSE). Moncton, NB. Tel: (506) 857-8636. Price Oct 15/97: $33.20, 52-week range: $36.80-11.20. First mentioned on August 20/97 at $22.80, Major stock has moved up in price quickly over the last 6 weeks. It reached over $36 and is currently pulling back somewhat. Since this newsletter's last edition, the Company announced the acquisition of another Australian mining contractor and also announced first Q earnings of 54 cents/sh vs.last year's 42 cents. The company has been growing recently through acquisitions so that the fleet now numbers 285 drilling rigs, half of which are in Canada, the remainder in Central &South America, Australia and West Africa. Some analysts are calling for earnings of $2.30/sh for next year's fiscal 1998 and hence a stock price of $46, based on a 20 times multiple to earnings.

Murgor Resources Inc. ( MUG on ME), Montreal, QC. Tel: (514) 878-4216, Price October15/97: $0.55, 52-week range: $0.85-0.31. First mentioned at $0.79 on Aug 15/96. Like many Canadian junior mining exploration firms, MUG's stock is suffering in the market place. Teck Corporation is currently drilling Murgor's promising Barry gold prospect in northwestern Quebec. Drilling for gold deposits should take place on four other prospects this coming winter. Of particular interest, are new strong gold showings in Urban township in NW Quebec and in the Mishibishu area of NW Ontario. MUG is worth watching.

NQL Drilling Tools Inc. (NQL.A on TSE), Nisku, AB, TEL: (403) 955-8828, Price: Oct 15/97: $13.35, 52-week range: $14.15-3.95. First mentioned at $3.20 on May 15/96. The company is very much in the forefront of the activity surrounding drilling for oil and gas using horizontal and directional techniques. This has proven to be a popular method in Western Canada and is now being adopted in other countries, such as in the Permian basin in the US, particularly in older fields that have been subjected only to conventional drilling. NQL designs, manufactures and supplies downhole tools and services relating to this activity. Since much of the revenue generated comes from the rental of such tools, there is a great deal of leverage built in, the more tools available. Management is aiming for earnings of $1/sh for next year and if this is realized, a share price of $20 is a realistic target.

Newcourt Credit Group Inc (NCT on TSE) Toronto ON Tel:(416) 981-9500. Price October 15/97:$52.20. 52 week price range: $55.40-18.00. Mentioned first at $9.85 on Nov 17/96, adjusted for a 2 for split. Leveraged growth in asset financing. Stock has hit all near term targets and in relation to earnings estimates of $1.85/sh this year and $2.30 next, time for a walk.

Tesco Corporation ( TEO on TSE, TESOF on NASDAQ) Calgary, AB Tel: (403) 233-0757

Price Oct 15/97:$27. 52-week range: $29.25-15.25. This is the first mention in this newsletter. Tesco is an international oilfield service company operating in over 20 countries. Tesco designs, manufactures and services highly efficient oilfield equipment that reduces the cost of drilling and producing oil and gas. Tesco is committed to an on-going, in-house research and development program that leads to the practical application of new technology. The Company is at the forefront in designing systems of the future such as an integrated underbalanced drilling system and in casing drilling. Meanwhile its bread & butter line of renting portable top drive drilling systems continues to grow. Revenues for the 6 months ended Aug 31/97 increased by 78% to $70 million, earnings by 64% to $12 million and eps went from 27 cents/sh to 4cents on 31.3 million fully diluted shs. Earnings this year should come in at 1.00/sh vs 0.60 last year and next year's should be about $1.20. Because of the high degree of R&D, a premium multiple to earnings is warranted, hence a share price target of $35 over the next year.