Petromanas Energy Sizes Up Albania Still Speculative Or Not

Jan. 13, 2014 7:22 PM ETPENYF9 Comments
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Contributor Since 2012

Studied: Power Engineering, Exploration Technology, Worked Upstream, Midstream, Downstream in Oil and Gas, Pipelines, Drilling, Refineries. Regardless of our desire for clean energy, oil makes things and is the building block of any economy. From production to transport to refining its the lifeblood of our lifestyle and we will likely pay more for it in the future as the USD looses its advantage as the worlds only reserve currency. The USD has likely peaked and will soon rollover and as it does the commodities will see a boom over several years. 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 supplying Energy Infrastructure. CAVEATS: Anything dubbed "EXPLORATION" should always be considered high "RISK" Capital and never larger than a single digit % of your entire portfolio. (Please re-read that sentence, its important) I don't offer investment advice, I generate compelling ideas that if they were to work out as promoted 'could' offer returns above average. The caveat being that exploration in gold, oil, silver, uranium, rarely nets a commercial operation that pays shareholders back, so you can trade them, and speculate in them, but don't count on them to save you as they are only intended as a low % holding that has good risk/reward return if the thesis works out. Your odds might be 2/100 for gold exploration, 3/100 for oil, so keep that in mind before plunking down your life savings. I try to weed out stories that have no hope, and shortlist ones that do. Focus areas; Oilsands, Oil Shale in North Dakota, Natural Gas in Canada, Colorado, Texas, North Island New Zealand, Australia, Uranium in Saskatchewan, Texas. Metals Mining in Nevada, British Columbia, Mexico. Thorium as a substitute for Uranium. Oil Exploration in proven formations in WSCB, Colorado, West Texas, Southern Saskatchewan, North Dakota, and select riskier emerging locations in Africa, Albania, Colombia, Argentina. Hydraulic Fracturing, Frac Sand Technologies, Oil Well Services and Horizontal Drillers. Natural Gas fired power plants and infrastructure, LNG Infrastructure, Terminals, LNG Shipping (LNG Shipping, Pipelines. North American OIL Pipelines, to and from Oilsands Producers, Refineries. OIL deposits organized by basin, geological name, or reserve size. Operate a startup blog called Tullii.org which aims to summarize the above topics using info graphics and charts for the layperson interested in adding oil and gas investments with a 2-3 year horizon. I approach from the Basin upward, do consult your own advisors before spending a dime on any of my ideas presented here. Remember I am just some guy you found on the internet, so do your own homework before you trade and be 100% responsible for your own risks and rewards. I repeat Most of what I present should only ever be 1-5% or less of your portfolio as its mostly unproven exploration projects nearing completion of validating reserves or resources. That being said I try to filter the projects by their upside potential with an emphasis on 'potential' to beat traditional investments if the story turns to fact via the drillbit.

Petromanas Energy Inc. - Albania/France/Australia

(Symbol PMI on TSX, PENYF on OTCBB)

Currency Converter

[TRANSCRIPT OF ABOVE BNN.ca INTERVIEW 02/26].

BNN.ca

NOTE: Anything in { } or [ ] are not direct quotes, I just added for clarity in the event readers don't understand certain references.

BNN Interviewer Andy..

"Time now for stakes and claims, its our weekly look at..a Venture listed company We have an energy company joining us for the FIRST time. Petromanas has been in Albania since 2010 and its play is prospective enough that Shell has bought in for a big chunk, for a look at that deal and well as development of what petromanas has called drilling deep expensive difficult wells...we are joined by Glen McNamarra the ceo at Petromanas, Glenn thanks so much for coming on the show."

"So we know about Bankers Petroleum, how are you different? Just explain how what you are doing in Albania is any different than Bankers [petroleum]."

Petromanas CEO

Sure will, in some respects our business couldn't be more different than Bankers...they (Bankers) are refurbishing older heavy oilfields and we are exploring for deep light oil and much bigger targets {than Bankers Petroleum}.

Shell apparently left Albania years ago they didn't manage to find in the way of oil or produce much but they are now buying into your properties and they are putting up something like $100MM could you tell us how that deal works?

Petromanas CEO

We first I'll say that we're exploring the large targets here, we've got an excellent onshore land base, were drilling prospects that are in the range of 200MM, 150MM barrels, these are world class, these are bigger than what a company our size can handle, so we had gone to a farm out process and engaged shell and they were quite interested and they pursued our data room, and they have offered a bid that we think is very fair, and we are both very pleased. We are very happy to have SHELL on board.

BNN Interviewer Andy

So I see this figure, $100MM is that fixed, or how much is shell actually paying you...at this stage?

Petromanas CEO

"Well what the deal is, that we have a 'carry' on 3 wells."

And the carry is a carry of our share of upto $50MM for the first 2 wells, $42.5MM on a 3rd well, and a 'carry' on a $40MM seismic program. So they [Shell] are carrying our share of those activities."

BNN Interviewer Andy

'Oh I see you dont have to put up money for the moment'

Petromanas CEO

"That is exactly right, we are spending about a hundred million gross. Last year and this year net to Petromanas last year was about $14 MM we are looking at about the same this year, about $13-14MM."

BNN Interviewer Andy

"Now Shell is also exploring in italy across the Adriatic and they think the geology might be continuous."

Petromanas CEO

"Exactly. Shell is involved in 2 big fields there the Val D'gri and the Tempa Rossa they are 500MM BBL and 300MM BBL fields respectively. Val d'gri has been on production for about 14 years producing in excess of 80,000 bbl/day from about 30 wells. The wells can be very prolific, Tempa Rossa is coming on to about 50,000 bblday capacity by about 2016 and Shell is a partner in both of those with Eni and Total."

BNN Interviewer Andy

Well your wells in Albania are not cheap, i believe they are going to cost about $50MM each to drill because you have to go through this "Flysch" (name of rock layer) shale formation?

Petromanas CEO

"Thats correct the well cost is in the $50 {Million} range, depending on the location and the lease that we need to build.

But it {DRILLING COST} is mostly due to the depth.

We are drilling these wells to 5500m to 6000m. You are correct we do have a {flakey flysch} shale that can be unstable, but it is the SEAL for the RESERVOIR. It's a "regional seal" and its a necessary "zone" we think we have learned alot from the first well and should be able to drill through that without any issues."

BNN Interviewer Andy

Give us an idea of when you would hope to see some production or what kind of production would you be looking at.

Petromanas CEO

"So we've drilled our first well, [Shpirag-2] it completed last summer, we tested it through the fall, we announced the discovery with the [Albanian] government in December 2013. So we now have a light oil discovery on this structure. We are drilling on a second well now which is about 18Km south of the first one. There is a chance this is all one structure.

Our seismic has been very encouraging we just finished a program there, and the second well should be down {completed drilling} in the summer. These discoveries need to be appraised, the time line could be 2-3 years to finish the appraisal. Ahh but there is an opportunity to do early production and extended tests on these wells and we are evaluating that on this first discovery [Shpirag-2].

BNN Interviewer Andy

"Glen, we'll have to leave it there...thanks so much for joining us. Fascinating story.

Petromanas CEO

Thank you Andy appreciation you having us on, thank you very much.

GM CEO of Petromanas Energy joined us from Calgary.

{END of Interview}

----------------------------------------------------------------------------

TThings to consider:

(march 11, 2014) news release

New to oil plays? Click on the Index below, then 'drilling fundamentals' for an intro into terminology of oil and gas drilling.

(Blog from Week of Feb 26)

[Image added 2/26/2014]

[Previous blog post]

In the arena of Exploration, it doesn't get more exciting than virgin geology where entire new basins or oilfields could be born within a short time. Petromanas has more irons in the fire than just ALBANIA, but for this quick update we will focus only on the upside of the APPRAISAL wells being drilled in ALBANIA.

Now for starters, this is highly speculative, meaning its risky as far as investments go, but it has an appeal that you will soon understand. The people and project in this company are Top Notch, they had to be, in 2013 they attracted a former US General Wesley Clark to the Director team.

The project got even more attractive when SHELL Oil took an interest in it, and signed on for a 75% Working Interest in first Blocks 2-3 in ALBANIA.

There is alot of work to be done, but at $0.15 a share most people can afford a chance on this project. And if the share price is too rich for your blood, the next product might interest you...called a Warrant PMI.WT (which could expire worthless by 02/2015 if the management cannot pull off a triple in value from its current $0.15 to $0.45 by then).

The 'Warrants' are fancy ways of playing the PMI shares like option without tying up as much cash. They bear much more reward and much more risk, but the price is 1/10th the cost so if you like the timeline and want the option to not miss out on the upside you can own a Warrant (rights) that gives the Option to buy shares at $0.45 or above.

Even if you don't get the timing right sometimes (although its rare) you can get a nice pop up on warrants pricing upon positive news releases from Oil drilling operations on Exploratory wells. Do your homework though, these look attractive but often investors don't get to exercise them and they are a fair priced way to raise funds by companies and reward early believers in an exploration play.

Sector: Energy | Sub-Sector: Oil & Gas E&P

Alternate Symbol(s): V.PMI.WT | PENYF

Warrant Symbol - PMI.WT

Number Trading - 100 million

Expiration Date - Feb. 23, 2015

Cusip - 71672A 11 3

Exercise Price - .45

USA OTCBB STOCK PENYF

CDN WARRANT PMI.WT

There are $1.5 Million dollars of $0.015 warrants in the market right now. They only have value if PMI shares are trading at or above $0.45 so they are a speculative option for believers in the company and its ability to achieve results north of 45 cents by the expiry date of the warrants which is Feb 23, 2015.

For someone else to

UPDATE:

www.bnn.ca/Shows/Commodities.aspx

The Drilling of Blocks 2-3 are big impact plays, that could be company makers if they not only make a discovery but are commercial wells that will flow for years.

Shpirag and Molishti are close to being tested and will help confirm future plans on these initial Blocks. So far the industry is viewing these as very promising plays.

By Q4 we should have results released, so if you plan on getting in, keep that timeline in mind.

25% Interest means sharing 25% of all costs and if successful earning 25% of the revenue for production if its a commercial well.

[ Speculative ]

(CASH FLOW)

(INCOME)

(Bal Sheet)

Business Description: Petromanas Energy, Inc. is an exploration stage company. It acquires, explores and develops oil and gas properties in Albania, France and Australia.

Address: 734-7th Avenue SW, Suite 1720, Calgary, AB,

CAN, T2P 3P8

Telephone: +1 403 457-4400

Website: www.petromanas.com

75% Interest means sharing 75% of all costs and if successful earning 75% of the revenue for production if its a commercial well.

These are DEEP, Expensive wells that could flow Oil at super high rates for years.

Disclosure: I am long RDS.A, PENYF.

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