Paskasta johdosta kärsii lompakko

PAINTED PONY PETROLEUM ANNOUNCES FLAT LAKE BAKKEN DISCOVERY AND ACQUISITION OF BAKKEN LAND AT MIDALE

"Flat Lake
The Bakken discovery well, CPEC et al Flat Lake HZ 3B5-10-4B5-9-1-16W2 (35% working interest) flowed at an average restricted rate of 208 bbls/d for a 24 hour period following 5 days of continuous testing. The well was shut-in temporarily in order to prepare it for production.
This is the first well drilled in the Company’s new Flat Lake core area, which was acquired through a farm-in arrangement. Through participation in the well, Painted Pony now has a contiguous block of 6,000 net acres (9.4 sections), all of which is Crown land that will receive Saskatchewan’s deep horizontal royalty incentive on the first 100,680 bbls produced per horizontal well. The Flat Lake asset provides a significant increase to the Company’s Bakken drilling inventory."

Rylandin entistä maata ja Crescent Pointin operoima kaivo. Edesmennyt Ryland oli uskomaton yhtiö siinä että johdon piti olla pätevää ja mukana oli Montanan Elm Coulee Bakken-kentän löytänyt geologi Richard Findley(AAPG:n vuoden geologi vuonna 200X). Rahaa yhtiö keräsi olemassa olonsa aikana yli 100 miljoonaa ja poltti ne kaikki kaivoihin, jotka eivät tuottaneet juuri mitään. Ainoastaa ne yhtiön maille poratut kaivot tuottivat, joita operoi joku muu kuin RYD. Triaxonin poraama ensimmäinen kaivo osoitti että aluella on potentiaalia.

CPG on farm-outannut suuren osan Rylandin oikeuksia mm. Ponylle ja Renegade Petroleumille. Yhtiö hankkinut viime vuosina niin paljon maata että sen resurssit eivät riitä poraamaan kaikkia ennen kuin oikeudet raukeavat, joten farm-out on luonnollinen ratkaisu. Lisäksi suuri osa hankitusta maasta etsintä porauksen kannalta hyvin korkea riskistä, joten on järkevää jakaa tuo riski.

Kruunun rojaltien kannalta Flat Laken Bakken on siinä kiintoisa ja mahdollisesti tuottoisa että muodostelma on tuolla yli 2,000 metrin syvyydessä, jolloin kaivon tuottamaan ensimmäiseen ~100,000 tynnyriin kohdistuu vain 5% rojalti. Viewfieldissä Bakken on pinnemmassa joten rojaltit ovat normaalilla tasolla eli ensimmäisestä 31,000 tynnyristä 5% rojalti, jonka jälkeen prosentti nousee 20% tienoille.

My little pony in the prairie(Bakken-jutskaa)

Viestittää

Painted Pony's production for September 2009 (based on field estimates) averaged 1,800 boe/d, a 37% increase from second quarter 2009 sales of 1,313 boe/d. Crude oil production averaged 1,230 bbls/d in September 2009 compared to the second quarter average rate of 543 bbls/d. Natural gas volumes averaged 545 boe/d in September compared to second quarter average sales of 733 boe/d; the decline due to the previously reported voluntary shutting in of lower netback gas wells in the Cypress area, and to stabilization of rates following the flush production from the successful first quarter drilling and re-completion program. In the first week of October 2009, the Company has experienced a temporary reduction of approximately a quarter of the daily oil sales volumes due to excessively wet surface conditions.

Painted Pony carried out an active third quarter horizontal Bakken development drilling program with the drilling of 7 (6.3 net) wells. Six of these oil wells (6.0 net) have been placed on production. In the first three quarters of 2009, Painted Pony has participated in the drilling of 11 (10.3 net) horizontal Bakken oil wells and 1 (0.5 net) conventional gas well. In addition, during the third quarter of 2009, the Company closed four acquisitions of undeveloped land and Bakken production at a cost of $14 million (before adjustments), primarily in the Company's core Midale/Huntoon area.

Ponin osake on kirmannut kivasti tämän vuoden ajan(taitaa olla +300%), tosin tuollaiset nousut eivät ole harvinaisia tänä vuonna. Öljyn tuotannon tuplaaminen kvartaalin sisällä on kyllä näinä aikoina suht harvinaista.

Ponin osaomistaja(Shelter Bayn kautta) Orastava Piste(Crescent Point) tiedotti maanantaina:

Crescent Point Energy Corp. ("Crescent Point" or the "Company") (TSX:CPG) announces that on October 2, 2009, Crescent Point acquired an aggregate of 32,166,667 common shares (the “Shares”) of Reliable Energy Ltd. (the “Issuer”) pursuant to a private placement at a subscription price of $0.15 per Share.
The Shares acquired by Crescent Point are held for investment purposes. This investment will be reviewed on a continuing basis by Crescent Point and such holdings may be increased or decreased in the future. Crescent Point may in the future acquire or dispose of Shares, through the open market, privately or otherwise, as circumstances or market conditions warrant. Immediately after the completion of the transaction referred to above, Crescent Point exercised control or direction over an aggregate of 32,166,667 Shares, representing 19.9% of the issued and outstanding Shares as at October 2, 2009.

Painted Pony Petroleum Q1 & stuff

Revenues C$4.17 million (+191%)
Cash flow from operating activities C$1.49 million (+14%)
Net loss per share C$-0.05

Production
Liquids 620 bbls/d (+318%)
Natural gas 3,631 mcf/d
Operating netback per boe C$21.69 (-69%)

Balance sheet

Assets
Current C$16.85 million
Total C$92.60 million

Liabilities
Current C$10.44 million
Total C$12.29 million

Equity C$80.31 million

Q1 Presentation

PAINTED PONY CONSOLIDATES CORE AREAS WITH
ACQUISITION OF 160 BBLS/D OF BAKKEN ASSETS(.pdf)

"Current production from the acquired properties, based on field estimates, is approximately 148 bbls/d of Bakken oil, with an additional 12 bbls/d shut-in due to spring breakup. The Assets include 3,410 net acres
(5.3 net sections) of undeveloped adjacent lands prospective for Bakken oil."

Painted Pony Increases Bought Deal Equity Financing to $19.95 Million(.pdf)

"Painted Pony Petroleum Ltd. ("Painted Pony" or the "Corporation") is pleased to announce that, in connection with its previously announced public offering, the Corporation and the syndicate of underwriters led by FirstEnergy Capital Corp. and including RBC Capital Markets, Cormark Securities Inc. and CIBC World Markets Inc. have agreed to increase the size of the offering to 7,000,000 Class A Shares ("Class A Shares"). Under the revised terms, the Underwriters have agreed to purchase, on bought deal basis, an aggregate of 7,000,000 Class A Shares at $2.85 each for aggregate gross proceeds of $19,950,000"

The new shares are priced around 10 percent below the current market price of PPY.A, which isn't much of a discount. The modest discount is probably due PPP's exceptionally(for a junior) strong balance sheet.
PPP's A class share is up 200% YTD, which is nice but according to me there's still plenty of long-term upside. Then again everything is up.

Saskaboom II

Leader-Post: Dreaming of the future

"The idea that Saskatchewan could replace Alberta as Canada's leading oil and gas producer would have been dismissed as wishful thinking, at best, and outright lunacy, at worst, not that many years ago.

Yet that's exactly what delegates were told at an oil and gas forum in Regina this week..."

"Conventional oil production has also been declining in Alberta for years -- from 750,000 barrels per day in 2000 to 525,000 barrels a day in 2007. Meanwhile, Saskatchewan's oil production has virtually doubled in the last 20 years to 428,000 barrels a day in 2007.

However, Alberta still has the edge in conventional oil reserves, with 1.6 billion barrels in 2006 (based on the most recent National Energy Board estimates), versus 1.2 billion in Saskatchewan, but year by year we're catching up.

But that's not taking into consideration the Bakken light oil play in southeastern Saskatchewan, which could boost the province's recoverable reserves by 2.5 to 10 billion barrels (depending on whether you believe Saskatchewan Energy and Resources or the U.S. Geological Survey).

Nor does the NEB reserves estimate take into account the full impact of enhanced oil recovery (EOR) from CO2 being injected in the Weyburn-Midale oilfields, which could boost recovery rates to more than 15 per cent over the next 25 years..."

A quote from Crescent Point's annual report:

"Over time, our large resource in place pools have outperformed initial expectations. At Crescent Point, we strive to realize increased recovery factors on these pools through infill drilling, water flood optimization and improved technology. The larger the pool, the greater the potential impact on reserves and value."

A quote from Painted Pony Petroleum's April presentation:

"Why Target Oil in the Bakken Zone?
...Eventual downspacing and waterflood expected to significantly increase reserve recovery"

When the amount of original oil in place is measured in billions of barrels an increase of a single percentage in the recovery factor can grow company reserves with tens of millions of barrels. The application of EOR technology will of course increase the production costs, but since water and CO2 flooding are relatively well established recovery methods the additional costs should be moderate.

Crescent Point's proven+probable reserve life index is at the moment 14 years, CEO Saxberg predicts that the reserves can be more than doubled through EOR, which would extend the RLI to three decades. CPG's reserves also have potential upside in the company's undeveloped land base, which grew quite a bit through the Talisman acquisition.

I do intend to increase my position in the Co., but the Fridays closing price of 29 CAD is a bit too expensive in today's oil price environment and also in the light of a possible dividend cut.

Bakkenin kunkku

Crescent Point Gets Genuity Buy Rtg On Asset-Base Quality

TORONTO (Dow Jones)--Crescent Point Energy Trust (CPG.UN.T) boasts a high-quality asset base with "excellent" economics, particularly in the Bakken trend, prompting Genuity Capital Markets to start coverage of the soon-to-be corporation at buy, with a C$36.25 target.

Genuity's Brian Kristjansen said the Bakken play and its extensive infrastructure provide "exceptional" economics for Crescent Point. Add in the potential of the Frobisher zone and "these economics improve dramatically," the analyst said.

In Toronto Tuesday, Crescent Point is down 2.2% to C$26.73.

Crescent Point recently discovered four uphole Frobisher pods and believes there are many more to be discovered or extended. Kristjansen said this zone is often as productive as the underlying Bakken and the wells are "exceptionally economic" in their own right.

Crescent Point has light and medium oil and natural gas assets in core areas in central/southern Alberta and southern Saskatchewan. It's the dominant producer in the southeast Saskatchewan Bakken play, a massive oil reserve that stretches across North Dakota, South Dakota, Montana, Manitoba and Saskatchewan.

The trust is in the process of converting to a dividend-paying corporation and expects the conversion to be complete by the end of May. On conversion, it will begin paying a monthly dividend of 23 Canadian cents a share.

Kristjansen said the early conversion to a corporation is meant to allow Crescent Point "unfettered" access to further acquisitions and consolidation opportunities that were previously capped by Canadian-government-specified investment flow-through rules. In October 2006, the Canadian government said it would begin taxing income trusts starting in 2011. Many trusts have already converted, or plant to convert, to corporations before 2011.

"We believe an unshackled Crescent Point will be even more potent competition for area peers Petrobank (Energy & Resources Trust) and TriStar (Oil & Gas Ltd.), and that ultimately the assets of these companies will also one day be swallowed by Crescent Point," Kristjansen said. He added that he expects to see Crescent Point take over private company Shelter Bay Energy, in which it already owns a 21% stake.

Genuity estimates Crescent Point's 2009 production will average 40,508 barrels of oil equivalent a day. Kristjansen said Bakken opportunities anchor the company and production from the horizon accounts for 50% of total production.

Crescent Point is forecasting 2009 production of 40,500 barrels of oil equivalent a day, with resulting cash flow of C$593 million. Genuity puts cash flow at C$609 million, noting its current commodity-price estimates are marginally higher. For 2010, Genuity is forecasting production of 42,197 barrels of oil equivalent a day.

Siis Kanadan Bakkenin, USA:n puoli on oma kuningaskuntansa. Pääsyy miksi Crescent Point konvertoi trustista osakeyhtiöksi jo nyt puolitoista vuotta ennen Kanadan trusti-verolainsäädännön voimaantuloa lienee juuri nuo lainsäädännön rajoitukset kasvulle. Konvertion jälkeen Crescent todennäköisesti fuusioi listaamattoman Shelter Bayn(josta se omistaa 20%) itseensä jo tämän vuoden aikana. Shelter on käytännössä pelkkä holding-yhtiö, jonka toimintoja hoidetaan Crescentin kautta esim. CP:n CEO Scott Saxberg on myös Shelterin CEO.
Seuraava fuusiokohde on varmaankin Painted Pony, jota Crescent jo nyt omistaa Shelterin kautta. Ostolistan kolmonen on Tristar Oil & Gas(näin luulen ma) ja oston todennäköisyyttä kasvattaa se että Talismanilta ostettu omaisuus ja tuotanto tulee yhtiöiden yhteiseen operointiin. Lisäksi Tristarin hallituksen puheenjohtaja Paul Colborne on myös Crescentin hallituksen jäsen.
Petrobank oli ensimmäisiä yhtiötä Saskatchewanin Bakkenilla ja se otti ensimmäisenä käyttöön frakturointi tekniikan, joka on lisännyt Bakkenin tuotannon kannattavuutta merkittävästi. Jos PB:n THAI-tekniikka toimii ja lyö itsensä läpi raskas öljyn tuotannossa, yhtiö on varmaankin valmis luopumaan Bakkenin toiminnoistaan, mutta en usko että CP pystyisi tai haluaisi ostaa Petrobankkia kokonaisuudessaan.
Ryland Oililla on 200 000 netto-eekkerin maa omistus Kaakkois-Saskatchewanisssa ja siksi näyttäisi selvältä CP:n ostokohteelta, mutta yhtiön omistuksiin ja johtoon liittyy joitakin epämääräisyyksiä.
Em. listattujen yhtiöiden lisäksi löytyy joukko pienempiä yksityisiä yhtiötä, jotka toimivat Kanadan Bakkenilla, joista osa päätynee osaksi CP:tä.

Kysyntä-tarjonta tilanteen tukemana kevyt öljyn ja raskas öljyn hintaero on kasvanut taas merkittävästi viime vuosiin nähden, myös maakaasun ja öljyn ja etenkin kevyt öljyn välinen hintaero on kasvanut huimaksi, NYMEXin tuorein hinta öljytynnyrille on $48.05 ja maakaasulle $3.60 per MCF, jolloin yhtä öljytynnyriä vastaava energia sisältö maakaasuna maksaa n. $21.60. Nähdäkseni ainoastaan poliittiset päätökset tukea maakaasun käyttöä voisivat muuttaa tilannetta ja kaventaa hintaeroa. Ja (kevyt) öljyn kalleus tai vahvuus "kilpaileviin tuotteisiin" nähden yhdistettynä Crescentin kevyt öljy reserveihin ja resursseihin tekee yhtiöstä potentiaalisen ostokohteen. CP:n P+P reservit viime vuoden lopussa olivat 191 miljoonaa BOE:ta, jotka kasvavat Talisman-oston myötä kohtuullisesti. Crescent Pointin mineraalioikeusmailla on arvioitu olevan öljyä ja kaasua yhteensä 6 miljardin tynnyrin edestä, joista siis 191 miljoonaa tynnyriä arvioidaan olevan talteen otettavissa tämän päivän teknologialla ja markkinahinnoilla. Teknologian kehitys(horisontaali poraus ja hydraulinen frakturointi) mahdollisti kaupallisen ja kannattavan tuotannon Bakkenista ja mahdolliset uudet innovaatiot ja sovellutukset voivat kasvattaa Crescentin reservejä merkittävästi.
Jos/kun osa tai kaikki edellä spekuloiduista ostoista/fuusioista toteutuu Crescentin kasvattaessa samalla tuotantoaan nykyiseltä mineraalioikeusmaaltaan, tulee yhtiön yhtiön öljyn ja kaasun tuotanto kasvamaan 70 000-100 000 tynnyriin päivässä nykyisestä 40 000.

Alla oleva kuva havannoillistaa Bakken-tuotantoa ja frakturointia, sekä Frobisheria.

Painted Pony Petroleum

Painted Pony Petroleum Ltd. TSX-V:PPY.A and PPY.B


"Calgary, Alberta based junior oil and gas company. Completed initial public offering in May 2007 into a tax-loss company, started trading on TSX.V. Bought NE BC assets March 2008"


Market value(05.01.2009): C$49 million

P/E: 7

Production: YTD average 622 boe/d, September-08 production 1060 boe/d, Light Oil 49%, 51% Natural Gas+NGL+Condensate

Operating Costs: 9 months/08 C$8.29/boe(C$9.10)

Netbacks: 9M/08: $57.87($87.82 for crude oil and $24.68 for Gas&NGL) with WTI at C$111.7

Reserves: no official estimate yet. The company controls 80 net sections of Bakken-land. According to PPY there are 4 to 6 million bbl's OOIP per section. Petrobank estimates that there are 600 000 bbls of 3P reserves on every section, Tristar Oil & Gas's estimate for their Bakken-land is 500 000 per section. 80x500 000=40 million bbl's. The recovery factor used in the estimates of PB and TOG may be doubled through the use of water flooding and so there is significant potential upside.
In addition to the Bakken operations the company has 88 700 acres of potential shale gas land in NE British Columbia(see Montney) and 480 boe of daily natural gas production.

Total assets: C$100,933,521

Total debt: C$21,051,736 of current liabilities, no long term debt

"To date, Painted Pony has not undertaken any hedging or commodity price contracts."

"Painted Pony continues to develop its land base through drilling to earn land, freehold leasing and participation at crown land sales. By the end of October, 2008, the undeveloped land within Saskatchewan was over 51,000 net acres."

"At the end of September 2008, the Company had a positive working capital position of $21.3 million and nothing drawn on the two bank credit facilities totalling $22.0 million."

*"Directors and mgmt own 18% of current outstanding shares, based on votes"

Analysis or something resembling a one: The company has no net debt and is likely to have 40 to 100(through water flooding) million barrels of light of oil(>41 API) in reserves. The flow rates in the Bakken are very slow: on average 50-200 bbl's per day per well. The Saskatchewan Bakken oil is commercially viable with the price of oil at 40 dollars per barrel according to Crescent Point Energy Trust(which is the biggest operator in the Canadian Bakken). If the company earns merely 2 dollars per barrel from the oil produced from Saskatchewan and one uses the 40 million barrel estimate for the recoverable oil reserves, the net value for the Bakken assets would be 80 million dollars, which is 60% higher than the current market value. This estimate assumes no value for the BC operations, which are already producing natural gas and generating cashflow. I would estimate that with WTI at $60(long term average?) and recoverable reserves of 40 million bbl's there is potential upside of >600% in the share price.
Access to funding at the moment is difficult for most companies and damn near impossible to oil & gas and mining juniors. PPY's financial situation is adequate, as it had in the end of 3rd quarter a positive working capital of 21 million, undrawn credit lines worth of 22 million and cashflow generating assets. PPY should be able to maintain and even increase it's production in the near future without new capital.