Members of Pat McKeough’s Inner Circle enjoy a double benefit when it comes to taking advantage of our stock investing advice. They get to address investment questions directly to me and my research associates; AND they get to see all other members’ questions, and the stock investing advice we give in our answers (of course, we eliminate any personal information).

Inner Circle members ask us about a wide range of investment questions, including questions about specific stocks they are considering buying. For example, here’s a recent member question about a highly speculative oil and gas explorer that could be set to tap into a vast deepwater reserve. I hope you enjoy and profit from it.

Q: Dear Pat: I saw a story about oil and gas off the shore of Namibia. It gave a name, Chariot, but no details. The oil and gas formation is supposed to be same as that off the shore of Brazil on the other side of the Atlantic. What is your stock investing advice on this? Regards.

A: This story refers to the theory that present-day continents once formed a single land mass, known as “Pangea”. This super-continent is thought to have broken up into pieces that became today’s existing continents. After the break-up, the pieces moved to their present locations, in a gradual process known as continental drift that began about 250 million years ago.

There are billions of barrels of deepwater oil off the coast of Brazil. If this oil was formed prior to the breakup of Pangea, then it’s theoretically possible that oil also exists on the other side of the Atlantic. Namibia, in southern Africa, is on the opposite side of the Atlantic from Brazil. The area off the coast of Namibia is largely unexplored.

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Petroleo Brasileiro S.A. ADRs, $34.74, symbol PBR on New York (Shares outstanding: 2.5 billion; Market cap: $93.1 billion), commonly known as Petrobras, is currently producing large quantities of oil off the coast of Brazil.

Chariot Oil & Gas, $2.55, has its main listing in the U.K. but also trades on the “over-the-counter” market in the U.S. under the symbol OIGLF (Shares outstanding: 141.6 million; Market cap: $287.5 million). The company holds four licences that cover eight offshore blocks in Namibia.

Chariot has signed an agreement with Petrobras with respect to one of these blocks. Under the terms of the agreement, Petrobras will get a 50% interest in one of Chariot’s exploration blocks, 2714A. In return, Petrobras will give Chariot:

1) a cash payment of $16.04 million U.S., which consists of a cash component and reimbursement of past costs, including the recently acquired seismic survey of block 2714A; plus

2) in the event of a commercial discovery, payment of a production bonus equal to 4.75% (after royalties) of Petrobras’ share of production up to either 2 million barrels of oil equivalent or a value of $118 million U.S., whichever occurs first.

Our stock investing advice on Chariot, based on its association with Petrobras and the “Pangea theory,” is only available to members of our Inner Circle. You can’t get it anywhere else!

If you’re looking for authoritative advice on investment issues, or fundamental analysis of stocks you’re considering buying (or selling), you should join my Inner Circle service. When you do, you always get clear, concise investment advice that’s 100% independent, and untainted by commissions or other undisclosed influences. I swear to it. Click here to learn more.