Few people know the energy industry as well as T. Boone Pickens and, if you like to follow 13-D filings in search of investment ideas, you may want to take a look at InterOil (AMEX: IOC) because Pickens has increased his stake in the company to 9.9%.
It's interesting to see the once-feared raider involved in InterOil because it looks like a very speculative investment: InterOil is working on a natural gas project in Papua New Guinea, but currently has no proven reserves and a lot of debt. All this for a market cap of just south of $1 billion.
But if you're going to speculate on an energy stock, you could probably do a lot worse than to follow Pickens into InterOil. No one knows exactly what his intentions are -- he won't talk and neither will the company -- but the presence of such a prominent oilman should help the company's future fundraising efforts. The shares have been extremely volatile of late, but the upside of a super-investor may not be priced in yet.
I would continue to watch this one from the sidelines for now.
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