As a consumer, I have to say, I am outraged at the prices at the pump these days. Over 3 dollars a gallon! Are you kidding me?! Every time I fill my tank, I muse over the wonderful things I could have done with that $60.00 which is cheerfully racked up at warp speed as I stand there. That is a steak dinner or a nice bottle of wine. Heck, that is lot of stock in some of the companies I trade!

However painful it is to watch my pennies add to dollars and dollars add to yet another lost steak, I have always thought of myself as a glass-half-full kind of guy. So it occurred to me after one too many bouts of anger at the gas station, to turn lemons into lemonade. These days, it still hurts when I watch a good steak dinner or a nice bottle of wine pumped into my gas tank but I have a new source of consolation. What I lose as a consumer, I gain as an investor.

With energy prices as high as they are, it only makes sense to put my money where my money is going anyway. So, in a constant effort to take advantage of a trend, we decided to up our energy (and alternative energy - which we will elaborate on in future issues) coverage. Hence our new coverage of oil and gas company TX Holdings, Inc. (OTCBB: TXHG). Our timing could not have been better either.

News out late Wednesday notes progress being made in testing a number of the company's wells to insure they are structurally fit before extracting oil.

Commenting on the news prior to a market day that saw shares jump just over 16% or about $.14, Mark Neuhaus, president and CEO of TX Holdings commented: "This is one of the many steps we have taken in order start producing these leases," "We look forward to sharing more with our shareholders about the next phase of growth as the wells move into production,".

Black Gold Rush

TXHG is an oil and gas company specializing in shallow, low risk oil wells in oil rich western Texas, specifically an area called, Abilene. The company's objective to is purchase interests in operating wells that pay for themselves in 24 months or less, thereby creating solid profitability. With current interests of more than 57 million barrels of recoverable oil, this model seems to be working well for them. This is also a low risk, but consistent, course of company expansion for the bottom line.

Smaller oil and gas companies have been coming out of the woodwork for a couple of years now. Typically large oil companies are not interested in running and maintaining many moderately producing oil wells which are thereby either sold to smaller oil companies or simply abandoned until they are brought back into production.

Even without oils prices consistently climbing the way they are, these smaller wells are still very valuable. TXHG owns interest in many such wells and is growing daily.

What differentiates TXHG from a slew of other oil and gas companies in the marketplace today is its steady growth due to execution of a solid business plan.

In any trend, there will be fly-by-night companies that balloon on fad interest and then deflate when their size is not substantiated by solid and consistent income. We like TXHG for it's long sightedness.

Labels: (OTCBB: TXHG), TX Holdings Inc., TXHG