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  • JUNEX STARTS DRILLING ITS GALT NO. 4 HORIZONTAL WELL

    Junex is a junior oil and gas exploration company that holds exploration rights on approximately 5.2 million acres of land located in the Appalachian basin in the Province of Quebec.

    When a trained geologist sees an opportunity missed by others it sometimes turns into a real niche play, which if successful can give them a nice lead ahead of others in the exploration business.

    Junex might be onto something in Quebec.

    They have convinced others to fund them to this point. They now have their own dedicated Rig which makes sense based on the cost of a rig move from others and the fact that drilling in the plays they are after might require specialization that would work better if the drilling staff had a stake in the company along with management.

    This will take a few more years to be noticed by most investors. If you start reading what they are upto and why they are chasing the basins they have acquired rights to you will see that their geological thesis has some legs.

    They are getting underway with a program that may further confirm the exploration of oil in unconventional basins and success would give them first mover advantage in a fairly niche play.

    I will add to this post with some footnotes later in the month as I attended an in-depth presentation on Anticosti in June, and it has some fascinating components worthy of further discussion.

    http://www.junex.ca/market-information

    The company is in the heart of the Utica Shale gas discovery located in the St. Lawrence Lowlands and holds a significant land-package on the Anticosti Island where an independent report has provided their Best Estimate of the undiscovered shale oil initially-in-place ("OIIP") volume for the Macasty Shale on all five of Junex's permits on Anticosti Island at 12.2 billion barrels. In parallel to its exploration efforts in Quebec and expansion of its exploration activities elsewhere, the company operates a drilling services division.

    The Junex Galt No. 4 Horizontal well, the first in a series of horizontal wells planned for the next phase of the project, will be drilled from the existing Junex Galt No. 4 vertical wellbore towards the Galt No. 3 well in the Forillon Formation. The wellbore trajectory is designed to intersect a greater number of open, near-vertical fractures than that encountered in the Galt No. 3 vertical well that Junex recently production tested at an initial rate of 180 barrels of oil per day in late July (see July 30, 2014 press release)

    Gaspésie

    The basin of Gaspésie covers an area of more than 300,000 hectares. Junex holds 669,235 hectares (1,653,716 acres) under exploration licences in this sedimentary basin.

    This region's geology offers many conventional and unconventional exploration targets, the most well-known being the sandstone of Forillon. Following the production of the Galt gas deposit, Junex continued the sector's exploration and discovered an important accumulation of oil. According to Netherland, Sewell and Associates, net recoverable prospective gas resources on the Galt licence would be of 20 million barrels. The Galt project presently covers an area of 21,935 hectares (52,868 acres).

    The petroleum potential of the Forillon Formation on Junex's Galt Field property was previously evaluated for Junex by Netherland, Sewell & Associates, Inc., ("NSAI"), a firm of worldwide petroleum consultants based in Texas. In its report, NSAI placed their Best Estimate of the total Oil-Initially-In-Place ("OIIP") resources at 260.2 million barrels for the Forillon Formation on Junex's Galt Field property. This 260.2 million barrel figure includes Discovered Contingent OIIP volumes of 26.3 million barrels and Undiscovered Prospective OOIP volumes of 233.9 million barrels. - See more at: www.junex.ca/recent-activities/galt_106#...

    The petroleum potential of the Forillon Formation on Junex's Galt Field property was previously evaluated for Junex by Netherland, Sewell & Associates, Inc., ("NSAI"), a firm of worldwide petroleum consultants based in Texas. In its report, NSAI placed their Best Estimate of the total Oil-Initially-In-Place ("OIIP") resources at 260.2 million barrels for the Forillon Formation on Junex's Galt Field property. This 260.2 million barrel figure includes Discovered Contingent OIIP volumes of 26.3 million barrels and Undiscovered Prospective OOIP volumes of 233.9 million barrels. - See more at: www.junex.ca/recent-activities/galt_106#...

    - See more at: www.junex.ca/gaspesie-en#sthash.4UN4zyes.dpuf

    See more at: www.junex.ca/press-releases/junex-mobili...

    Junex holds 70% interest in the 16,645 acre-sized Galt Oil Property and 100% interest in the 36,816 acre-sized permit adjacent to the Galt Oil Property. (click to enlarge)The adjacent 100% Junex acreage has not yet been independently evaluated for its resource potential. These landholdings are situated approximately 20 kilometers from the town of Gaspé in eastern Quebec. - See more at: www.junex.ca/press-releases/junex-mobili...NEWS RELEASE 14 October 2014JUNEX STARTS DRILLING ITS GALT NO. 4 HORIZONTAL WELL

    OCTOBER 14, 2014 - QUEBEC CITY, QUEBEC - Junex Inc. (TSX VENTURE:JNX) ("Junex" or the "Company") is pleased to announce that it started drilling its Junex Galt No. 4 Horizontal well earlier today with its recently-acquired, 3,000 meter-capacity Foragaz No. 4 drilling rig.

    The Company also announces reception of a new drilling permit from the Quebec government for its next horizontal well on the property, the Junex Galt No. 5 Horizontal well, which the Company intends to drill following the Galt No. 4 Horizontal well.

    Mr. Peter Dorrins, Junex's President & Chief Executive Officer comments: "The Galt No. 4 Horizontal well is a "First" in two respects: not only is it the first horizontal well on our Galt Oil Property but it is also the first horizontal oil exploration well ever to be drilled by industry anywhere east of Quebec City in the province of Quebec. With our long-standing partner in the Galt Oil Property, Mr. Bernard Lemaire, we are quite excited to be drilling this milestone well in the most advanced oil project in Quebec. We are proud that this well is being drilled with our own drilling rig staffed by our Quebec-resident employees."

    Mr. Dorrins continues: "With a sizeable resource potential of 330 million barrels of total Oil-Initially-In-Place, this oil project contains the largest combined Discovered Contingent Oil Resource and Undiscovered Prospective Oil Resource potential established by independent evaluators so far on the Gaspé Peninsula. We forecast that the planned 1,300 meter-long horizontal leg of the Galt No. 4 Horizontal well should take between approximately 55 days to drill, after which testing operations are planned to commence."

    The Galt No. 4 Horizontal well is being drilled from the existing Junex Galt No. 4 vertical wellbore towards the Galt No. 3 well and is designed to optimally intersect the maximum number of open, near-vertical, natural fractures in the Forillon Formation reservoir. The initial production rate of 180 barrels of light oil per day recently achieved during a production test in the Junex Galt No. 3 vertical well, that emanated from only a few near-vertical fractures in the well, demonstrated the potential of the Forillon reservoir on the Galt Oil Property and permitted the Company to review and finalize its plans for testing of the Galt No. 4 Horizontal well in the event that it is successful (see Junex's July 2, 2014 and August 5, 2014 press releases).

    Junex holds a 70% interest in the Galt Oil Property and 100% interest in the adjacent acreage. The adjacent 100% Junex acreage has not yet been independently evaluated for its resource potential. These landholdings are situated approximately 20 kilometers from the town of Gaspé in eastern Quebec.

    Netherland, Sewell & Associates, Inc., ("NSAI"), a firm of worldwide petroleum consultants based in Texas, has previously established their Best Estimate of the total Oil-Initially-In-Place ("OIIP") resources for the Forillon and Indian Point formations on Junex's Galt Oil Property at 330 million barrels that includes Discovered Contingent OIIP volumes of 36 million barrels and Undiscovered Prospective OIIP volumes of 294 million barrels (see press release from March 27, 2013 for details of the NSAI report).

    About Junex

    - See more at: www.junex.ca/press-releases/junex-starts...

    Junex to explore for oil on Anicosti Island.

    Anticosti island covers 800,000 hectares. Junex's project covers an area of 94,403 hectares (233,275 acres) stretching on 5 exploration licences, bordering the south side of the island.

    According to Junex's mapping, these licences are located in an area very favourable to oil exploration. The South Anticosti sector, located below the Jupiter fault is the most favourable for hydrocarbon accumulation in the different identified reservoirs.

    - See more at: www.junex.ca/anticosti-en#sthash.YTvfm67...

    (click to enlarge)

    Oct 15 12:18 PM | Link | Comment!
  • Understanding The Crude Oil Sell-Off

    Understanding The Crude Oil Sell-Off ...

    (Source: content re-posted from Joseph Triepke | oilpro.com )

    (click to enlarge)

    Understanding where we are going starts with understanding where we have been. And understanding how we arrived here is key to removing fear from the trend. Above we document key turning points in the recent downturn.

    During the sell-off, production disruptions have been de minimus and production growth (even beyond strength in US shale) is the primary fundamental concern driving the sell-off.

    The Libyan production recovery is surpassing market expectations in volume and longevity, and this is weighing on prices (as shown in the chart below). In Libya, crude oil production increased from 200,000 barrels per day (bbl/d) in June to almost 900,000 bbl/d by mid-September despite security deterioration.

    In September, OPEC pumped 30.47mmbpd, the most since August 2013. This is weighing on an already well-supplied Atlantic Basin.

    Add this supply strength to the fact that 2014 oil demand is expanding at the slowest pace since 2009 (global economic growth weakening), and you have a recipe for lower oil prices.

    Since mid-summer, the multi-year gains in equities have begun to feel toppy. After rallying from early-August lows, the stock market has sold off hard over the past month (a 7% correction in the S&P 500).

    This sell-off reflects a "risk-off" attitude in the capital markets that affects commodities-especially oil-as well. The risk aversion in the market over the past month has been closely correlated with another leg down for crude oil prices as shown above.

    It's also worth noting that shares of upstream companies have significantly underperformed the broader market over the past 6 months (OSX down 20% and EPX down 26% vs. SPX still up 3.5%). This is a sign investors have been more bearish on the O&G outlook than the broader economy, and it is also an indication that some of this weakness in crude is already discounted in the stocks of upstream companies.

    The old rule of thumb "dollar up, oil down" has been true during the current sell-off. During the past couple of years, there have been times when this relationship was questioned because oil and the dollar both rose at the same time.

    But the growing role of commodities as alternative investments during a period of excess liquidity and globally low interest rates may now be contributing to the traditional link between oil prices and the dollar (inverse relationship).

    The dollar strength has certainly been another headwind for crude oil price during the current sell-off.

    As we write, oil prices stand at key technical support levels. While we tend to approach the markets from a fundamental perspective first, technical trends do matter in times of panic.

    Two critical technical levels to monitor.

    The first is $84, the prior low that we bounced off of in 2012.

    The next level is the double bottom in the high-$70s hit in late-2011 and mid-2012. If this high-$70s level is breached in the days ahead, technical support for a floor significantly erodes.

    In the past, OPEC members might have talked about production cuts during a sell-off like this. With all the hype about US shale growth clearly not lost on OPEC country ministers, these officials are now brushing aside mentions of production cuts.

    Oil ministers from Kuwait and Algeria and others have dismissed possible output cuts (we'll address Saudi in the next slide). This is sparking speculation that they will compete for market share rather than reduce production to protect global prices.

    In the past few days, Iraq has said it will sell its Basrah Light crude to Asia at the biggest discount since early-2009, and this comes after price cuts by Saudi Arabia and Iran. Meanwhile, Venezuela has called for an emergency OPEC meeting - Venezuela is the OPEC member with the least tolerance to price cuts.

    As shown above, most OPEC members are running with some level of spare capacity in their systems. Spare capacity seems likely to remain static or even shrink in the near-term as OPEC members increase volume to offset lost revenue due to price weakness - certainly not good for oil price support.

    (click to enlarge)

    In the table above, we take a look back at happier times - documenting prior Saudi oil market interventions via production cuts to support price.

    Historically, the Saudis (as the world's largest oil suppliers), have acted as responsible stewards of oil price, turning on and off the taps as needed to keep oil prices stable. The simple math is that higher oil prices make each of their 9.7mm barrels produced daily more valuable, so near-term volume losses result in higher revenues long-term.

    But over the past year, the Saudis have been inundated with headlines touting the US is overtaking them as the global oil supply leader. We can't help but think that this now plays into their price protection willingness. This week, Saudi oil ministers have reportedly communicated an intention to continue to supply the market at current levels - a revelation which triggered panic selling in the market.

    The Saudis are reportedly willing to tolerate oil below $90 or even $80 a barrel for the next few years. That suggests they won't respond with production cuts in the near term and will wait for oil to fall into the $70s before they would consider a response.

    Unlike Saudi, where control is held centrally and bureaucratically, US oil supply is dictated by dozens of capitalistic entities each trying to maximize their profits - in other words, the US will never be a market regulator like the Saudis unless some extreme policy measures around exports are put in place (highly unlikely).

    Saudi commentary in the weeks ahead will be critical to day to day prices moves in oil

    The Saudi government's massive $228bn annual spending program is growing (up 4% this year and +20% last year), and it is mostly focused on social welfare. The Saudis must keep this spending going to avoid social unrest like other MENA nations have seen. This program is funded almost exclusively by oil revenues and must have high global oil prices to work.

    So while Saudi is concerned about US production and foreign policy, flooding the oil market to wage economic warfare on US shale would put their interests and future at risk.

    That said, lots of posturing and pageantry is to be expected, and we are in a critical period for non-OPEC producers (2015 budget season). The Saudis would be well served to create uncertainty during budget season and then act to support prices after shaking the resolve of non-OPEC producers during 2015 planning sessions.

    Frankly, this shakedown may be a good wake up call for the real oil market challenges that lie ahead in the long-term. To be clear, we do not fall in the "oil bear" camp in the long-run, and there are many positives to be found. But some of the key challenges the oil markets must deal with over the next 3-5 years include the above.

    X--------------------------------END -------------------------------X

    (click to enlarge)

    My take on the OPEC move is to cut oil price rather than cut production sets off a series of potential counter moves that raise the probability of some very unconventional moves being played by the USA shortly.

    With much of the Mid-east in a tizzy, and opec nations not all on the same page its conceivable that as Brent oil is priced and sold in USD, the USD could become a strange role player if it was to cease becoming the reserve currency abroad for Oil transactions.

    What that looks like is anybody's guess but these are going to be strange times ahead. I'm interested in your perspective, if you comment use this format,

    Country: Industry: :Perspective on Oil prices is

    Tags: OIL, oil prices, wti, brent
    Oct 15 12:08 PM | Link | Comment!
  • South America Oil And Gas Projects Snapshot

    Quick comment for getting more value out of this instablog post.

    This is a partial list of North American listed companies operating in Latin America (South America).

    A snapshot of each company is highlighted by country/region and quick description of their main business activity is listed below each banner(which links to their website).

    To go in depth you can also click on each company logo to link to a dated investor presentation offered by each particular company.

    (You may have to search for newer presentations as they change quarter to quarter and we don't always update the links)

    Always read disclaimers for each company as information can change from project to project.

    If you have additional suggestions usa or other listed companies, in these regions email us website addresses, and listing symbols.

    Enlarge 'The Graphic' to read more about reserves in each region.

    Pacific Rubiales Energy Corp is engaged in the exploration, development and production of certain oil and natural gas interests, primarily located in the Republic of Colombia.

    Since Colombia has numerous energy projects we have given it a dedicated page, click link below to read about Colombia.

    Niko Resources Ltd is engaged in the exploration, development and production of natural gas and oil in India, Bangladesh, Indonesia, the Kurdistan region of Iraq, Trinidad, Pakistan and Madagascar.

    Parex Resources, Inc. is engaged in exploration, development, production and marketing of oil and natural gas in South America. It is engaged in the Llanos Basin and Middle Magdalena Basin of Colombia.

    Touchstone Exploration Inc is engaged in the exploration and development of its oil and gas properties located in Trinidad.

    Alvopetro Energy Ltd is an oil and gas exploration and production company. It is engaged in the exploration, acquisition, development and production of hydrocarbons in the Reconcavo, Tucano, Camamu-Almada and Sergipe-Alagoas basins in onshore Brazil.

    Avanti Energy Inc is engaged in acquiring, exploring and evaluating mineral resource properties. The Company operates in USA, Mexico and Italy.

    Brownstone Energy, Inc. is a diversified oil & gas company. It holds interest in oil and gas exploration projects, which include offshore Israel and in the Llanos Basin, Colombia, as well as other oil and gas interests around the world. Brazil's national petroleum agency awarded Brownstone two onshore land blocks in Round 8 of the Brazilian Land Auctions in the Tucano Basin area of Central Eastern Brazil. BrazAlta and W.Washington were also awarded three blocks during the same auction. All three companies have entered into an agreement to co-operate on the ownership and development of the combined five blocks. Brownstone has a 25% participating interest in the project, subject to resolution of litigation related to the bid process held by the ANP in Brazil.

    Canacol Energy Ltd is engaged in petroleum and natural gas exploration and development activities in Colombia, Ecuador, Brazil, Guyana and Peru.

    (click to enlarge)

    Gran Tierra Energy, Inc., together with its subsidiaries is an international energy company engaged in oil and gas acquisition, exploration, development and production. The Company owns oil and gas properties in Colombia, Argentina, Peru and Brazil.

    Petro Vista Energy Corp is in the business of exploration, development and exploitation of oil and natural gas properties in Brazil.

    The Company has earned the rights to a 37.5% working interest (27.32% net revenue interest) in the producing Tartaruga block in the Sergipe Alagoas Basin subject to receiving all necessary regulatory and partner approvals including the approval of the ANP to the assignment to the Company of a working interest. This block is located on Brazil's east coast situated adjacent to the large Miranga Oil Field (Petrobras) having over 814 MMBOE in place and the Carmopolis Oil Field with over 528 MMBOE.

    (no presentation at this time)

    Ivanhoe Energy, Inc., is an international heavy oil development and production company. It is focused on pursuing long term growth in its reserve base and production using advanced technologies, including its HTL Technology.

    Canacol Energy Ltd is engaged in petroleum and natural gas exploration and development activities in Colombia, Ecuador, Brazil, Guyana and Peru.

    (click to enlarge)

    Americas Petrogas Inc is in the business of exploration, development and production of oil and gas properties in Argentina and exploration of near-surface potash, phosphates and other minerals and potential development of a fertilizer project in Peru.

    ArPetrol Ltd is engaged in oil and gas exploration, development and production from concessions in Argentina.

    www.arpetrol.com/pcs.html

    Azabache Energy, Inc. is an oil and gas exploration company. The Company acquires, develops, and produces crude oil and natural gas in Argentina.

    (click to enlarge)

    (click to enlarge)

    Crown Point Energy Inc is engaged in the exploration for, and development and production of petroleum and natural gas in Argentina. The Company is focusing on two geographic areas: Tierra del Fuego and northern Neuquén Basin.

    Gran Tierra Energy, Inc., together with its subsidiaries is an international energy company engaged in oil and gas acquisition, exploration, development and production. The Company owns oil and gas properties in Colombia, Argentina, Peru and Brazil.

    Madalena is an independent, Canadian-based, domestic and international upstream oil and gas company whose main business activities include exploration, development and production of crude oil, natural gas liquids and natural gas.

    Internationally, Madalena holds three large blocks within the prolific Neuquén basin in Argentina and is focused on the delineation of its large petroleum in-place shale and unconventional resources in the Vaca Muerta and Lower Agrio shales, in addition to tight sand plays in the Mulichinco and Quintuco.

    (click to enlarge)

    (click to enlarge)

    CGX Energy Inc main business activity is petroleum and natural gas exploration in offshore Guyana, South America.

    Pacific Rubiales Energy Corp is engaged in the exploration, development and production of certain oil and natural gas interests, primarily located in the Republic of Colombia.

    Petrodorado Energy Ltd is an oil and natural gas exploration company. The Company is engaged in the exploration and development activities in Columbia and the United States

    Sep 16 8:10 PM | Link | Comment!
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