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  • Cott Oil And Gas Sells Kina Stake, Has Asian LNG Exposure

    Cott Oil and Gas (ASX:CMT) has sold its 10 million share stake in Kina Petroleum (ASX:KPL) on market netting over $3.3 million in cash.

    CMT already held $2.1 million in cash at the end of June 2014, and will now hold around $5 million in cash following operating expenses in the September quarter.

    The company holds some quality assets, and considering the market cap. of just $7 million, this gives an Enterprise Value of just a couple of million dollars.

    CMT is focussed on Papua New Guinea with four licenses and a gas discovery.

    Its flagship asset is the Pandora Gas Field (CMT:40%) an offshore gas discovery with 2C 800BCF which has exploration upside.

    Highlighting the prospectivity, previous license holders suggest Pandora could contain up to 1.3 Tcf gas in place.

    The recently developed Concept Study by FLNG developer Wison Offshore and Marine demonstrates Pandora is technically and commercially viable.

    Pandora Gas Fields

    The Pandora Gas Fields located in Gulf of Papua midway between Port Moresby and Daru in 120m of water at approx 1,400m TVD.

    The joint venture has CMT with 40%, Talisman 25% (Operator), Kina 25% and Santos (ASX:STO) 10%.

    It is a carbonate reef structure with excellent porosity and deliverability.

    - Pandora 1X drilled in 1988 over A Structure discovering a 298m gas column which was tested at 57 mmscfpd; and

    - Pandora B1X drilled in 1992 over B Structure discovering a 110m gas column which was tested at 43 mmscfpd.

    There are several prospects that have been identified within the licence by 3D seismic.

    Growing awareness that many gas fields will not be developed other than with FLNG is driving technological development and reducing costs making FLNG far more commercially and technically viable.

    Pandora FLNG concept study

    Cott engaged Wison Offshore & Marine to undertake Concept Study for Pandora Gas Field.

    Option 1 - Offshore FLNG

    - 3 well development with subsea completions
    - 1 mtpa vessel with 170,000m3 storage
    - Onboard gas treatment and re-injection of sour gas
    - Estimated Capex US$900m - US$1,100m (US$900 - US$1,100/ tpa)

    Option 2 - Near Shore LNG

    - Field Production via a Buoyant Tower for processing and sour gas reinjection
    - 160km clean gas pipeline to near shore location
    - 170,000m3 storage barge with 1 mtpa liquefaction capacity
    - Estimated Capex incl pipeline and tower - US$1,300m - US$1,400m

    Funding is likely to come from vessel and infrastructure owners - tolling model.

    Analysis

    CMT has now received $3.3 million in cash from the non-core sale of shares in Kina Petroleum, and Proactive Investors estimate that by taking existing cash into consideration, the company will have $5 million in cash at the end of September 2014.

    Considering a market cap. of just $7 million, the Enterprise Value of $2 million positions the company as being highly leveraged to any potential future Joint Ventures or farm-ins that provide the company with free carry.

    CMT also has a tight register, with 77 million shares on issue.

    Now the key ingredient.

    Papua New Guinea is a growing LNG hub for Asia, and CMT's licenses offer exposure to this very hot market segment.

    Already several vessel owners and infrastructure partners have expressed strong interest in Build Own Operate - tolling model for gas owners.

    Worth noting Michael O'Keeffe (ex-Riversdale Mining Chairman/ founder) holds a 8.7% stake in CMT.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

    Sep 19 1:51 AM | Link | Comment!
  • Condor Blanco Mines Opens Trial Mining Pits At Uludere Project

    Condor Blanco Mines (ASX:CDB) and its project operator at the lead-zinc-silver Uludere Project located in Eastern Turkey have opened the first two trial mining pits.

    Project operator, Anatolian Resources Madencilik Ltd Şti, has commenced stockpiling of material collected for sale under the offtake agreement with Meskan Olmez Madencilik Ltd Şti.

    This week Condor signed an off take sales contract with the largest Lead-Zinc miner in Southeast Turkey, Meskan Olmez Madencilik which owns an operating flotation plant located in Hakkari Province.

    The flotation plant is equipped to process Zn, Pb and included Ag to produce high value concentrates for sale to export markets.

    Trial Mining pits

    These pits will be systematically sampled by the local geological team over the next few days.

    The opening of the pits follows a few days spent rehabilitating old roads built during mining that occurred during the 2006-2007 zinc boom (when the zinc priced reached over $4,000, which saw a rush of artisanal mining in Eastern Turkey).

    Some additional access tracks have also been cut allowing access to the two pit areas that have been excavated to date.

    A few hundred kilograms has been collected in the process of opening these first pits.

    Meskan Olmez Madencilik has assayed samples of this material at its laboratory and has confirmed in writing that it meets the contract specifications.

    The excavator has now continued moving towards the centre of the license area, where two larger pits are currently planned. These will focus on an area at a lower elevation recommended by the geological team of the original project owner Bonus EnerjiElektrik Maden A.Ş.

    Condor's managing director, Glen Darby commented: "We are very pleased that work at the Uludere Project is progressing according to plan. We are committed to ensuring that shareholders are kept fully informed of progress and the outcomes achieved.

    "I hope that we will soon be able to announce the first truck of material being dispatched to the Meskan Olmez Madencilik flotation plant."

    Off take agreement signed this week

    The agreement struck with Anatolian Medencilik enables Condor and Anatolian Medencilik to deliver material produced from the Uludere Project in Turkey's Şırnak province directly to the flotation plant for cash payment.

    The Offtake Contract binds Meskan Olmez Madencilik to accept all Zinc (Zn), Lead (Pb) and Silver (Ag) bearing material produced from the Uludere Project from today until 31 March 2015.

    This flotation plant is adjacent to Meskan Olmez's flagship Meskan mine and has full laboratory and weighing facilities and is equipped to process Zn, Pb and included Ag to produce high value concentrates for sale to export markets.

    This plant located is 93 kilometres by sealed national highway from the Uludere Project. The shipping cost for this distance is USD9 per tonne (including handling).

    Mined material will be weighed and assayed on arrival at the flotation plant. A total of 90% of the contained value will be paid based on a preliminary assay undertaken at the flotation plant laboratory, with the remaining 10% paid based on a final invoice to be drawn based on assays to be performed by SGS Turkey.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

    Sep 19 1:49 AM | Link | Comment!
  • Sun Resources Encounters Significant Oil Shows In Texas Well

    Sun Resources (ASX:SUR) has revealed that significant hydrocarbon indications have been observed in the Lower Woodbine target formation.

    The company is drilling ahead in the lateral section of the Jack Howe #1H well within Sun's (50% and operator) Normangee Oil Project, located in Texas.

    Sun will complete the execution of the drilling program using the Nabors Drilling USA LP Rig #53 over the next 2-3 weeks.

    There is the potential the well could deliver substantial oil flow, with the strategic location providing encouragement.

    The well bore is now being drilled horizontally at a measured depth of 10,262 feet.

    The area is highly prospective with U.S. independent EOG Resources (NYSE:EOG) having drilled 7 lateral wells that have produced at initial rates of between 200 and 600 barrels of oil per day.

    EOG is one of the biggest and most successful independent oil companies in the U.S. with a market capitalization over US$50 billion.

    EOG proximity to Sun Resources

    EOG has successfully drilled and completed 7 'laterals' in the Lower Woodbine target, to the east and west of Sun's Normangee Oil Project, in the same Lower Woodbine target identified in Sun's Jack Howe vertical pilot well.

    The most recent EOG lateral completion, Zeus #1H was drilled and successfully completed only 6 kilometres east of Sun's Jack Howe #1H vertical pilot well.

    Zeus #1H is currently on flow-back and its results will be reported as soon as they become public records.

    Timeline and depth

    Sun said that it expects the Jack Howe #1H lateral section to take another 7-10 days to complete in the primary objective Lower Woodbine Formation.

    The target formation is the Lower Woodbine which has been intersected at a target depth below 8,100 feet measured vertical depth (2,470 meters) and approximately 6,100 feet of horizontal section is planned to be drilled.

    Vertical pilot well bore has been re-entered

    Sun said that since the last report by the company, the vertical pilot well bore had been re-entered and cement plugs drilled out.

    The lateral section was then drilled in a near-vertical trajectory to the 'kick-off point' where the drilling assembly commenced drilling the bend section of the well.

    The bend has been drilled and the Rig is now drilling the horizontal section, at a measured depth of 10,262 feet.

    Elevated mudlog gas readings have been recorded while drilling the bend section, in line with Sun's expectations of this section being oil and gas bearing.

    Capital raising

    Yesterday Sun extended the closing date of its current one for five renounceable rights issue at $0.01 to raise close to $6.1 million, which is underwritten to an amount of $5.25 million.

    The closing date for the Offer has been extended by a further 8 business days to 3 October 2014.

    The issue is part of a $10 million capital raising which also includes an equity placement to raise about $4 million.

    Major shareholder Gina Rinehart's Hancock Prospecting Pty Ltd has already committed to participating in both the placement and the rights issue to maintain its shareholding of about 19.5%.

    In addition to Hancock's commitment, the raising is strongly supported by existing shareholders and a number of new domestic and international institutional investors.

    Use of Proceeds

    Proceeds from the capital raising will be used as follows:

    - Drilling of Jack Howe #1H Lateral ($1.2 million net to Sun at 50%WI);
    - Hydraulically fracture the Jack Howe #1H well ($2 million);
    - Lease bonus payments for new oil and gas mineral leases ($2 million);
    - Resolve matters with Amerril Energy LLC in respect of SW Leona Oil Project ($2.3 million); and
    - General working capital ($2.5 million).

    Analysis

    Sun's high-impact, near-term funded drilling is starting to bear fruit, with the company today revealing significant hydrocarbon indications have been observed in the Lower Woodbine target formation.

    While it is still early days, the prospectivity of the area is not questioned, with the valuation of Sun highly leveraged to exploration success.

    Take for example the US$50 billion capped U.S. independent EOG Resources (NYSE:EOG) which has drilled 7 lateral wells in the area that have produced at initial rates of between 200 and 600 barrels of oil per day.

    Gina Rinehart's Hancock Prospecting Pty Ltd is also a big supporter of Sun, with Hancock committed to participating in both the recent placement and the rights issue to maintain its shareholding of about 19.5%.

    Sun is raising around $10 million.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

    Sep 19 1:47 AM | Link | Comment!
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