₪ David Pescod's Late Edition January 31, 2008
Groundstar Resources ( V-GSA)) $1.53 -.02
Bridge Resources (V- BUK) $ 1.31 +.04
Petro Andina (T-PAR) $ 13.00 +.46
It was just a week or so ago that we came upon the work of Malcolm Shaw the oil and gas guy with Wellington West, with some interesting work that appealed to one’s sense of greed , entitled “Go Big Or go Home- 9 International Stories else where Exploration is the name of the Game”.
Some of the stories we’ve covered here such as CGX Energy, but many were new to us, and a few have moved since his report, so seeing as we hope to follow these stories, it’s time to go back to Malcolm, but first a note to those who had trouble with math, be it in school, or now balancing the family budget….when you are involved with the high risk high reward type of international plays that Malcolm follows here, you usually expect only about a 10% chance of success.
Or put it another way, the odds .of a miss are 90%....
But back to greed….Energulf, one of the stories on his list with one of the biggest targets, remains one of the most active traders on the tsx, but has yet to spud offshore Namibia, but it is expected shortly. In his report Shaw writes” The Kunene target is well imaged on 3-d seismic as a 95km² carbonate build-up with 4 –way dip closure and direct hydrocarbon indicators (as seen on seismic.)….50-60 days to drill and test to total depth.” They have a 10 % interest with their Russian partners.
As to the stories that have already popped, he points to Groundstar with plays in Egypt, Guyana, and Syria, but reminds us that the plays shortly starting at West Esh El Mallal, near the Suez is a small one wth a 5 to 15mmbbls target, although there are 5 targets that could total 90 mmbls. The big play in Egypt, the West Kom Ombo block he writes, ”has leads capable of holding multiple billion barrels of oil”, is down the road with seismic planned for this year and drilling possible in 2009.
Which gets us to our big question for Malcolm ‘if he could only buy two stocks to-day, what would they be? .. and please make one fun but not the type that would cause angst and loss of sleep”
Apparently all of his Big 9 stories are not the type to generate great sleeping patterns, but of the nine written of in his report, Bridge is his top pick, as they shortly spud their Durango play in the North Sea , a play that should be a gimmee.
The expected, hoped for cash flow of $60 mm/yr free cash flow is what hopefully funds the fun ….sometime in late qtr 2 of this year they drill the North Piper prospect, and that’s when the fun begins as this project has a hoped for potential of up to 400-500 mmbl, and currently they own 100% of it though they are hoping to farm out up to 50%.
But say sleep is important, and yet you still want to make a buck, Shaw still suggests a trip off to foreign fields, to Argentina, no less. This is not usually, a country associated with sound sleep ,with some of it’s recent action in the oil patch, such as instituting a $43.00 price for oil , but Shaw wouldn’t be surprised to see that change, or Argentina will soon be a country that becomes a net importer of oil.
The company that he expects to do well there, that has recruited a team of Western Canadian veterans to update technology and the like is Petro Andean, which has up to 50% interest in 500,000 acres of land, and some recent waterflood success that could see big increases in production, and recoverable reserves ...
BNP Resources (V-BNXA) $1.40 - .05
BNP Resources is a small oil and gas company formed when three Canadian natural resource veterans Greg Bilcox, P. Geol., Ed Nunes-Vaz, P. Land and Gordon Paul , CMA got together and decided try something on their own.
It’s a small company that’s only completed a handful of wells with a hundred barrels a day production and three hundred additional barrels waiting to go on line. With hardly any shares out it is illiquid as heck with management owning reportedly over forty per cent and I’m sure most people haven’t heard of it.
But you notice the pop in the stock back in late November when the Calgary Herald did a rather significant article on it when they reported “Calgary Firm hits major oil pool”, they have a significant discovery near U.S. border and pointed out that the company said this week that it is evaluating their reserve potential of a significant light oil discovery in an area known as Jensen, a region between Lethbridge and the U.S. border that hasn’t seen much oil and gas exploration for several decades.”
The article also mentioned that BNP’s find is part of a pool that straddles the Canadian-U.S. border and the Montana field has been pumping out a steady stream of crude since about 1948. New 3-D seismic work helped the company identify potential drilling locations on the Canadian side, the company said”. One observer of the company tells us those reserve numbers are expected within 4 to 6 weeks and gossip is they may have found something as big as 40 million barrels with 25 to 30 percent recoverable. That comes up with a rather significant number but it’s only rumors and gossip so far, but it should be on your watch list.
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