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Studied: Power Engineering, Exploration Technology, Worked Upstream, Midstream, Downstream in Oil and Gas, Pipelines, Drilling, Refineries. I'm Interested in very big picture, game changers that come from sizeable economic deposits of Oil, Gas, Gold, Silver, Uranium, Specialty Metals used in... More
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  • Petromanas Fractures May Indicate Fantastic Future Flow Rates 11 comments
    Apr 21, 2014 2:34 PM | about stocks: PENYF

    Petromanas may be onto something quite historic in Albania.

    Of course internally they have had this theory for years, now its closer to being confirmed, but i must caution this is very early in the confirmation process, yet it is still as exciting as it gets in oil exploration.

    The Molisht-1 well is nearing Total Depth, and when its tested it may prove the theory held by earth scientists years ago, which is that the fractures downhole are indicated by visible outcrops and fractures visible to the naked eye on surface.

    If such is the case, the number of wells that could be placed in this geographic region could be simply enormous. The hopes and dreams of many folks are riding on proving up this theory and the days are getting closer and closer to further confirming (or punching holes) in this particular story.

    An updated reserve report should be out soon and the Q3 well test should be commencing in on Molisht-1 if all went well drilling to TD.

    In the slide below Shpirag-2 and Molisht-1 are in Blocks 2-3 of which Shell owns 75% and Petromanas 25%.

    By Fall, after the Q3 well tests are complete, if the data suggests that the Shpirag-2 and Molisht-1 are the same carbonate structure; and if the reservoir is highly fractured, and if by chance its all one inter-connected reservoir, the size of this play will turn analysts on their heads by Q4.

    For a Quick profile of PMI read the factsheet below.

    http://petromanas.com/Investors/Presentation/documents/April2014PetromanasEnergyInc.CorporateFactsheet.pdf

    Shares shot up 10%+ today on nearly 4 million shares traded and warrants are up over 28%. Needless to say something is brewing in Albania and whether its speculation or material, the market is moving this company a bit higher today.

    My previous post on PENYF, PMI is here

    (click point and figure chart or banner for instructions)

    Above: red lines represent bearish resistance while the blue lines represent bullish support.

    Warrants

    (click to enlarge)

    (click to enlarge)

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  • tullii
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » Field Report from Albania

     

    Not much new info, but tells the history and shapes the story.

     

    http://bit.ly/1rsXNtI
    25 Apr, 09:37 AM Reply Like
  • haoleboy1967
    , contributor
    Comments (250) | Send Message
     
    Tullii - what is your take on this report?
    Sure seems like this should have more than a 60 cent target if this next well hits big ....
    25 Apr, 10:20 AM Reply Like
  • tullii
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » Everyone is playing conservative on numbers with Petromanas, its important that it (the play) doesn't get too ahead of itself until the hard science confirms the theory on the field.

     

    The report indicates, they are 4500m drilled so far, the hole size at surface is enormous, and the 7 inch casing to be set in a 8 inch hole at bottom tells me the flow rates expected by engineers are worthy of the significant diameter increase from Shpirag which was around 4-1/2" i believe.

     

    The additional diameter (nearly 2X) translates to significant increased potential flow rates and puts the future scale of this project to stand out as a world class play on all points.

     

    The fact that key investors and analysts flew to the country for site visits is partly subtle marketing and partly status update for what is a potential material monster sized reservoir in the making. Its a positive sign for sure.

     

    The 60 cent target is conservative but realistic (at least until the 4 wells are fully studied) and a comprehensive reserve report is put out later in the year.

     

    I hold the view that a future reverse split is a realistic probability in the event of a material success in terms of next 2 wells in Blocks 2-3.

     

    A reverse split would lower the enormous share count and increase the share price well above $0.60, which would create the conditions for much higher value to shares and warrants relative to where they are now.

     

    Keep in mind, that the engineers and geo-scientists have alot of work to do that is peer reviewed before any hard data like a reserve report or bbls in the ground estimate is released.

     

    Even if the numbers are fantastic the wells are very deep, very complex and very, very expensive. It will take 3/4 of a year to drill, complete, and test some of these wells. So the additional wells needed will take considerable time to add production. Yet its a great story well worth the study, as it moves through each phase of exploration to production and devntual development.

     

    It is thought, it will take 2-3 years to fully define the reservoir, but by mid-2014 they should have enough data to validate just how much potential this field has thus far, and for most folks sitting on the investor sidelines the report will be the first catalyst to decide when to move into a position in the stock.
    26 Apr, 10:06 PM Reply Like
  • tullii
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » http://bit.ly/1mVJVsm

     

    Gaining traction in Albania
    Having successfully drilled and tested Shpirag-2 earlier this year, Petromanas Energy Inc (PMI.V) is now looking for a repeat win with Molisht-1, which is scheduled for testing in H214 and expected to be followed by Shpirag-3, which targets to reach total depth, completion and testing by Q315. Benefiting from Shell’s analogous experience in Italy, we are expecting PMI’s analysis of the results from these three wells to be key to determining the level of success of the Albanian assets, and have the potential to de-risk and increase current prospective resource estimates of 375mmboe. On the cusp of a potential re-rating, our RENAV models, which include acreage in Australia and France, point to a value of C$0.69/share.
    Petromanas Energy Chart
    Albania’s Blocks 2-3: A likely game changer
    Following on from a successful oil and gas discovery on Shpirag-2, Petromanas, along with Shell (75%), will complete two more wells on Albania’s Berati thrust belt, beginning with Molisht-1, which is currently drilling ahead and expected to reach total depth by mid-2014, followed by Shpirag-3, which is set to spud in Q314. Assuming both of these new wells realise similar levels of success as those found in Shpirag-2, we are expecting upside from current reservoir estimates, and in turn, an uplift to our current NAV for Blocks 2-3, which we base on prospective resources estimate of 375mmboe on a 100% basis.
    France and Australia yet to show full potential
    In the south-west of France, Petromanas is exploring fractured carbonate plays, which are not affected by the current ban on fracking. We are expecting the release of a Ledeuix conventional gas resource assessment in the second half of 2014, to provide additional data points to our current valuation estimates. PMI currently holds 1.6 million acres in Australia’s gas laden Canning Basin; we are looking to expected new news regarding farm-out partners in 2014, with these likely to add a concrete timeline to the potential of these assets.
    Valuation: Two Albanian triggers now in place
    Our valuation models arrive at a risked exploration NAV of C$0.69/share by making use of resource estimates for Albania’s Block 2-3 and D-E, with our models assigning a risked exploration value of US$363m to Petromanas’s share of assets in Albania. Further to assets in Albania, acreage in Australia is valued at US$11.5/acre (US$19m), while gas assets in France realise an NPV of US$18m.
    To Read the Entire Report Please Click on the pdf File Below
    29 Apr, 06:33 PM Reply Like
  • tullii
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » Molisht-1 thought to have 8000-10,000 BBL/Day per Well

     

    http://bit.ly/1lSPXYF
    5 May, 05:50 PM Reply Like
  • tullii
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » Article from 2008 Sums up the Opportunity in ALBANIA

     

    http://bit.ly/1jFDpTT
    8 May, 04:52 PM Reply Like
  • k2everest
    , contributor
    Comments (2) | Send Message
     
    Tullii,

     

    I have learned more from you than anyone else regarding drilling in Albania. Pardon my ignorance, I am new to the oil sector; so they will definitely find oil at Molisht-1...then is it just a matter of how much BBL/Day is determined?

     

    And please tell me what you would consider a successful flow rate (to consider Molisht-1 a success)?

     

    Thank you for your time and insights!
    11 May, 02:08 PM Reply Like
  • Bullett
    , contributor
    Comment (1) | Send Message
     
    This is a high risk , high reward stock. Not for the conservative investor. I like that Royal Dutch Shell has considerable interest in two sections. The big boys do their homework.
    11 May, 05:33 PM Reply Like
  • tullii
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » There are no definite certainties in exploration. By definition it's going into the unknown seeking answers to well thought out questions. I know the 3D Seismic can give very detailed indications of hydrocarbon indicators prior to ever drilling, but the more important "deliverability" questions of flow rates, viscosity and metrics that matter to reservoir engineers and production engineers cannot be answered by seismic, so the drill bit must do that confirmation for us.

     

    There needs to be about 4 wells drilled to delineate the length width depth and inter-connectivity of the carbonate structure believed to have this elephant sized oil deposit. We have 2 more to be drilled to get all the data necessary to appraise how large the deposit is and what the realistic recovery rates are...this will take until mid 2015.

     

    However the big questions to de-risk the speculation priced into the share price will be known by the testing process expected to occur over the summer 2014, and if M1 prove to be commercial this company will become a world class player in a rather short time frame based on the production capability going forward.

     

    Just keep in mind that is take 8-9 months to drill a well, and they would need to find an elephant sized deposit with economic recovery rates to support multiple rigs drilling at the same time ... but ultimately that would be the dream.

     

    I cannot say what the market will do, but
    I think less than 3000 bbl might be considered too slow of a payback, anything above 6000 is likely quite viable, anything north of 8000 would be a home run. the depth of the well, the size of casing used and the expected pressures at that depth could support fairly large flow rates.

     

    Please do consult a investor relations person to verify any questions before taking my info as gospel, as situations change week to week and its important you are informed before making decisions that involve any degree of financial risk.
    11 May, 09:31 PM Reply Like
  • tullii
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » Update: July 11 PMI / PEYNF

     

    http://bit.ly/1mZY5cl

     

    Big drop (on no news) -28% or -$0.10 on PMI
    And the warrants fall -$0.06 on low volume.

     

    If you like the long term potential of the play, you might
    consider this as a good entry point as any,

     

    if you bought in higher hang tough the summer is low volume and we still have material events coming in the fall. No word on the meaning behind the drop, awaiting some kind of release or update soon.
    13 Jul, 08:31 PM Reply Like
  • tullii
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » excerpt from CEO.Ca

     

    Roughly, $70 million in market capitalization has been wiped off Petromanas Energy over the past two weeks, as shares in the Albanian focused oil and gas explorer have tumbled from $0.335 per share July 16th, 2014 to $0.235 at press time, despite no news over the same period.

     

    The company is currently drilling the Molisht-1 well in Southern Albania, in a joint venture with Royal Dutch Shell (25% and operatorship to Petromanas, 75% working interest to Shell).

     

    The joint venture is targeting massive and deep structures in Albania believed to contain light oil which they hope can flow at commercial rates.

     

    Petromanas CEO Glenn McNamara tells CEO.ca by email that the highly anticipated Molisht-1 well is drilling ahead, and that the company will publish an update soon. McNamara has been on the road, he said in the brief email.

     

    The last update from the company was on June 20th 2014 when the Molisht-1 well was drilling ahead at 4650 meters on its way to 6000 meters total depth, where testing is expected to take place. While that drilling update slightly delayed timelines for the completion of the well (H2 2014 estimate), evidence of natural fractures seen while drilling excited Haywood Securities energy analyst Darrel Bishop, with a Buy rating and $0.50 price target on the company’s shares.

     

    Mr. Bishop told my colleague Travis by email this morning that: “A lot of the recent weakness in PMI is due to guys getting nervous heading into Molisht-1 results. Also, whenever an exploration focused stock gets weak like this heading into a result, people assume that “someone knows something that I don’t” which creates a bit of a snowball effect.”

     

    He added: “The risk of not finding natural fractures was partially de-risked with the latest drilling update in June. With what is likely to be a large wellbore (est. 7 inch) into the deeper carbonates we believe with the presence of natural fractures sets up the potential for a strong test rate if oil is present and the partners are successful in drilling to the target depths.”

     

    Petromanas Energy had come to life over the past year, following a discovery at the Sphirag-2 well in early November 2013, which saw 1500-2200 boe flow to surface during an extended test. Since the company’s shares have climbed from a low of $0.10 to as high as $0.39.

     

    In light of no news from the company, explanation for the selloff could come from memories of the Shpirag-2 well, which encountered drilling difficulties at depth and resulted in a reduced well bore diameter, cost overruns and results delayed by almost a year. Memories of Shpirag 2 are potentially weighing on investors, some of whom are piling for the door ahead of results from Molisht-1. And as we all know, such nervous selling can become self fulfilling.

     

    A recent video by the company makes a compelling case for the scale of the discovery in Albania, which Petromanas needs to now prove can flow to surface at commercial rates. A successful outcome of the Molisht-1 well could be a huge game changer for the company, but they are also vulnerable to the opposite outcome.
    30 Jul, 10:52 AM Reply Like
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