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Filing highlights on oil & gas assets.
a) Hayter Prospect, Alberta, Canada
By a participation agreement dated December 21, 2006, Nuance Exploration Ltd. (“NEL”), a wholly owned subsidiary of the Company acquired a 100% ownership in the interpretation of 3D seismic data covering four sections of certain land, known as the Hayter Prospect, located in the province of Alberta, Canada by paying $82,650 (CDN$95,000) in costs of acquiring and interpreting the seismic data.
a) Hayter Prospect, Alberta, Canada – (cont’d)
On October 15, 2007, prior to the evaluation of the 3D seismic data, NEL sold to the original grantor (the Grantor) its 100% interest in the subject property and received as consideration a non-interest bearing promissory note for $111,144 (CDN$110,000) to be repaid by November 30, 2007.
On November 30, 2007, the Grantor did not pay the promissory note and NEL and the Grantor entered into a Participation Agreement whereby NEL accepted a 20% interest of the Grantor’s working interest in the County Line 10D Hayter 10-8-40-1 W4M well as full and final settlement of the promissory note totalling $95,702 after considering the effects of the foreign exchange on the note.
On October 16, 2009, the Company entered into an amendment to its Participation Agreement pursuant to which it acquired an additional 30% working interest in the Hayter Well in consideration of a release by Force from an amount of $23,938 owed by the Grantor to the Company. The Company holds a 50% working interest of the Grantor’s interest in the Hayter Well.
The addendum was subsequently amended by the parties on February 1, 2010 to replace the reference to the Company in the agreement with Nuance Exploration Ltd., the Company’s wholly owned subsidiary.
As at May 31, 2012, the 50% working interest of the Hayter Well was recorded at $135,427 (November 30, 2011:- $135,427). The company also recorded $15,148 (November 30, 2011 - $13,524) as an asset retirement obligation (Note 10).
Mineral Property
On July 6, 2010, the Company entered into a Property Option Agreement (amended May 11, 2011) to acquire an option to purchase a 100% interest in the property known as the Zoro 1 property, a mineral property comprising 52 hectares (approximately 128.50 acres) in the Snow Lake region of Manitoba Canada. In order to exercise the option, the Company must pay cash or issue stock to the Optionor by the following dates:
i) $59,600 (Cdn$62,000) on signing the agreement (paid)
ii) $102,900 (Cdn$100,000) or issue 1,000,000 shares of common stock on or before June, 15, 2011. (1,000,000 shares issued with a fair value of $80,000)
iii) $194,800 (Cdn$200,000) or issue a specified number of common shares still to be determined by the parties on or before June, 15, 2012 (Note 13)
iv) $389,600 (Cdn$400,000) or issue a specified number of common shares still to be determined by the parties on or before June, 15, 2013.
During the six month period ended May 31, 2012 the Company incurred $nil (six month period ended May 31, 2011 - $nil) of exploration expenditures on the property.
ATP Announces Completion of MC 941 A-2 Telemark Well
Jul 9, 2012 6:30:00 AM
Copyright Business Wire 2012
HOUSTON--(BUSINESS WIRE)-- ATP Oil & Gas Corporation (NASDAQ: ATPG) today announced the completion of the workover at its Mississippi Canyon (“MC”) Block 941 A-2 well located in the Mirage Field at the Telemark Hub. The well was completed with 3 ½ inch tubing at a measured depth of 17,140 to 17,401 feet to add the Miocene B Sand completion to the wellbore for field development optimization. Initial test flow rates are at 4,000 barrels equivalent per day (Boe/d) of which 90% is oil. The A-2 well will be tied back to the facility immediately and is expected to produce at a rate of 4,000 to 5,000 Boe/d.
The MC 941 A-2 well produces through the ATP Titan floating drilling and production platform. ATP operates the ATP Titan and Telemark Hub which is in approximately 4,000 feet of water with a 100% working interest and holds a 100% ownership in ATP Titan LLC which owns the ATP Titan and associated pipelines and infrastructure.
About ATP Oil & Gas Corporation
ATP Oil & Gas is an international offshore oil and gas development and production company with operations in the Gulf of Mexico, Mediterranean Sea and the North Sea. The company trades publicly as ATPG on the NASDAQ Global Select Market. For more information about ATP Oil & Gas Corporation, visit www.atpog.com.
ExxonMobil Starts Production from the Kizomba Satellites Project in Angola
Jul 9, 2012 4:00:00 AM
Copyright Business Wire 2012
Phase 1 to produce approximately 100,000 barrels of oil per day
Development to recover approximately 250 million barrels of oil
Nearly $1.5 billion was spent on local goods and services for the project
IRVING, Texas--(BUSINESS WIRE)-- Exxon Mobil Corporation (NYSE:XOM) announced today that its subsidiary, Esso Exploration Angola (Block 15) Limited (Esso Angola), has started production from the Kizomba Satellites Phase 1 project offshore Angola.
The Kizomba Satellites initial phase is expected to ultimately produce 100,000 barrels of oil per day, and recover a total of approximately 250 million barrels from the Mavacola and Clochas fields, located 95 miles off the coast of Angola in water depths of approximately 4,500 feet.
“This project combines ExxonMobil’s project management expertise with local suppliers and businesses to maximize the value of Angola’s significant petroleum resources,” said Neil Duffin, president of ExxonMobil Development Company. “The Kizomba Satellites project was completed ahead of schedule and with industry-leading safety performance, as was the case with previous Block 15 developments.”
Phase 1 of the project will develop 18 wells with subsea tiebacks to the existing Kizomba A and B floating, production, storage and offloading (FPSO) vessels, optimizing the capabilities of on-block facilities to increase current production levels without requiring an additional FPSO vessel.
The Kizomba Satellites development has achieved a high level of Angolan content, with approximately $1.5 billion invested in local goods and services, including contracts for fabrication, logistics support and training and development of Angolan personnel. Angolan participation in Block 15 projects has increased significantly over time as local companies, working with ExxonMobil and the Block 15 Contractor Group, developed their capabilities to perform the work required for such complex projects.
“Nearly 100 percent of the topsides and subsea equipment were fabricated in Angola, and we have provided more than 10,000 hours of skill-based training to Angolan contractor personnel for the project,” said Stéphane de Mahieu, Esso Angola Managing Director.
ExxonMobil was awarded Block 15 in 1994 and, to date, has discovered a total of approximately 5 billion oil-equivalent barrels. First oil was produced from Block 15’s Xikomba field in 2003, followed by startups of Kizomba A in 2004, Kizomba B in 2005, and Kizomba C in 2008.
Other Block 15 developments include the Gas Gathering project, which commenced on-block gas handling in 2011 and is transporting associated gas to the Angola LNG facility in Soyo. Development planning continues for several of the remaining discovered resources at Block 15, including the Kizomba Satellites Phase 2 and the 2009 Mondo South discovery.
In addition to Esso Angola (Operator, 40 percent interest), other co-venturers in Block 15 are BP Exploration (Angola) Limited (26.67 percent), Eni Exploration Angola B.V. (20 percent) and Statoil Angola Block 15 AS (13.33 percent). Sonangol is the concessionaire.
CAUTIONARY STATEMENT: Statements in this release regarding future events and conditions are forward-looking statements. Actual future results, including production rates, resource recoveries and project plans, costs and timing, could differ materially due to changes in long-term oil and gas price levels or other market conditions affecting the oil and gas industry; political or regulatory developments; actual future reservoir performance; unexpected technical or operating events; the outcome of commercial negotiations; and other factors discussed under the heading "Factors Affecting Future Results" posted in the Investor Information section of our website (www.exxonmobil.com). References in this release to resource volumes, including barrels of oil, include quantities that are not yet classified as "proved reserves" under U.S. SEC definitions but that we believe will ultimately be produced.
About ExxonMobil
ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is the largest refiner and marketer of petroleum products, and its chemical company is one of the largest in the world. For more information, visit www.exxonmobil.com.
Valero Energy Corporation (NYSE: VLO: $25) has been picked by S&P Capital IQ as its Focus Stock of the Week. VLO carries S&P Capital IQ's highest investment recommendation of 5-STARS, or Strong Buy.
"We believe that Valero Energy is poised to benefit from the unprecedented secular changes that are occurring in the North American refining space, driven by crude oil production from U.S. shale plays and the Canadian oil sands," said Tanjila Shafi, equity analyst at S&P Capital IQ. "We are positive on the company's significant presence in the Gulf Coast, where most of the North American crude oil production is heading."
Forest Oil Provides Eagle Ford Shale Update, Announces Second Half 2012 Capital and Drilling Program, Estimated Second Quarter 2012 Net Sales Volumes, and Second Half 2012 Guidance
Jul 9, 2012 3:20:00 PM
Copyright Business Wire 2012
Strong Results from Recent Wells in the Eagle Ford Shale
Company Adjusting Capital Spending and Pursuing Potential Divestitures to Enhance Financial Strength and Flexibility
DENVER--(BUSINESS WIRE)-- Forest Oil Corporation (NYSE:FST) (Forest or the Company) today provided an update on its Eagle Ford Shale operations, and announced its second half 2012 capital and drilling program, estimated second quarter 2012 net sales volumes, and second half 2012 guidance.
Eagle Ford Shale Update
Since Forest’s last operational update, three horizontal wells have been completed in the central fairway of the Company’s Eagle Ford acreage position that had an average 24-hour maximum production rate of 787 Boe/d (96% oil). The first two wells had a 30-day average production rate of 535 Boe/d (95% oil), and the third well, which has been on production for 18 days, has averaged 616 Boe/d (94% oil).
Given these and earlier 2012 well results, a second drilling rig was recently moved to the field.
Drilling in the Eagle Ford is focused in the central fairway of Forest’s acreage position, where the Company has experienced the most consistent results and has the largest, most contiguous block of acreage. This approach provides the opportunity to maximize drilling efficiencies, while further reducing the average well cost below $6 million as the program incorporates pad drilling.
The recent wells, and the earlier 2012 wells located in the central fairway, meet or exceed Forest’s type curve. The type curve projects an estimated ultimate recovery of 300 Mboe, with a pre-tax drilling rate of return of approximately 25% based on a $80 WTI crude price and a $6 million well cost.
Interim CEO Patrick R. McDonald commented, “The strong results from these wells in our Eagle Ford acreage position give us confidence we have an economic and attractive oil play. While discussions continue with parties interested in our Eagle Ford asset, we have identified a go-it-alone plan that is attractive to the Company and should allow us to hold approximately 40,000 net acres. We can then look to monetize a portion of the remaining acreage through small divestitures or farm-outs.”
Without the introduction of a joint venture partner, Forest plans to hold approximately 40,000 net acres with a 100% working interest over the next several years, initially with two rigs and eventually with three rigs. This acreage position has 500 total locations identified based on 80 acre spacing. Employing a two rig program, and the current schedule of drilling and well completions, net sales volumes from the Eagle Ford play is expected to exit the year at 3,000 Boe/d, from a second quarter 2012 average production rate of approximately 1,000 Boe/d.
Second Half 2012 Capital and Drilling Program
Forest intends to fund the Eagle Ford development program and reduce overall capital spending rates by cutting capital from lower return liquids projects in East Texas and the Panhandle area. Specifically, by the fourth quarter of 2012, in addition to the two rigs running in the Eagle Ford, Forest will have two rigs running in the Panhandle, down from five currently, targeting the Hogshooter and other oil intervals and one rig running in East Texas targeting liquids intervals, down from two currently.
Second half 2012 capital expenditures are estimated to be between $190 million and $210 million (excluding capitalized interest, capitalized stock-based compensation, and asset retirement obligations incurred), down from an estimated $435 million in the first half of 2012. By the fourth quarter of 2012, Forest expects its capital spend run rate to be approximately equal to expected cash flow based on current commodity prices.
Mr. McDonald stated, “Adjusting the capital spending rate is the first step in improving the Company’s financial strength and flexibility. Over the coming months we will proceed with additional steps by identifying and selling non-reserve based and non-core assets. In our core areas where we have reduced capital spending, our acreage is held by production; therefore, we can return to those areas with a more aggressive development program in a more robust commodity price environment.”
Estimated Second Quarter 2012 Net Sales Volumes
Second quarter 2012 net sales volumes are estimated to average approximately 335 MMcfe/d (68% natural gas and 32% oil and liquids). Second quarter net sales volumes were negatively impacted by approximately 8 MMcfe/d due primarily to downtime associated with a fire at Eagle Rock’s Phoenix-Arrington Ranch natural gas processing facility in Hemphill County, Texas. The facility returned to operations on July 3, 2012.
Second Half 2012 Guidance
The detail below represents Forest’s updated guidance for net sales volumes and capital expenditures for the second half of 2012. The updated guidance remains subject to the cautionary statements and limitations contained in Forest’s December 12, 2011 press release under the caption “2012 Guidance” as well as those stated below under the caption “Forward-Looking Statements.” Except as indicated below, guidance detailed in Forest’s press releases dated December 12, 2011 and April 30, 2012 remains unchanged.
Net Sales Volumes: Net sales volumes are expected to average 320 – 330 MMcfe/d (67% natural gas, 17% oil, and 16% natural gas liquids) during the second half of the year. Natural gas volumes are forecasted to average 215 – 220 MMcf/d, oil volumes are forecasted to average 9,100 – 9,400 Bbls/d and natural gas liquids volumes are forecasted to average 8,500 – 8,800 Bbls/d.
Capital Expenditures: Forest intends to invest between $190 million and $210 million for capital activities (excluding capitalized interest, capitalized stock-based compensation, and asset retirement obligations incurred) during the second half of the year.
Ouch that was quite a drop. Still braving the storm?
The U.S. Energy Department's weekly inventory release showed that crude stockpiles fell sharply, as imports declined. The agency's report further revealed that within the 'refined products' category, gasoline stocks edged up, while distillate supplies were down from the week-ago levels. Meanwhile, refiners pulled back their utilization rates by 0.6%.
The Energy Information Administration (EIA) Petroleum Status Report, which contains data for the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.
The federal government's EIA report revealed that crude inventories fell by 4.27 million barrels for the week ending June 29, 2012, following a decline of 133,000 barrels the week before.
Analysts surveyed by Platts had expected oil stocks to go down some 2 million barrels. A dip in the level of imports and production led to the stockpile drawdown with the world's biggest oil consumer even as refiners lowered their utilization rates.
However, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – increased by 225,000 barrels from previous week's level to 47.64 million barrels. Stocks are just under the all-time high of 47.78 million barrels reached earlier in June.
At 382.90 million barrels, current crude supplies are 6.8% above the year-earlier level, and are over the upper limit of the average for this time of the year. The crude supply cover was down from 24.8 days in the previous week to 24.5 days. In the year-ago period, the supply cover was 23.6 days.
Very exciting chart. Today's acquisition is opening it up for more growth. Exciting prospects.
Treaty Energy Corporation Acquires Four Oil & Gas Leases in Shelby County, Texas
The Company to Re-Enter the MADELEY F1H Well in Shelby County, Texas on Monday, July 9th
Jul 9, 2012 8:40:00 AM
NEW ORLEANS, July 9, 2012 /PRNewswire/ -- Treaty Energy Corporation (OTCQB: TECO) (www.treatyenergy.com), a growth-oriented international energy company, today announced the acquisition of four new Oil & Gas Leases in Eastern Texas, and its plan to re-enter and re-complete the MADELEY F1H well in Shelby County, Texas.
Today Treaty Energy Chairman, Andrew V. Reid, is pleased to announce that a major multi-stage acquisition has been signed by Treaty Energy. Mr. Reid believes that this acquisition, upon completion of the multiple stages, will position the company for tremendous growth and allow Treaty to move to a whole new level in the oil industry. (An 8-K will be filed on this acquisition.)
This acquisition involves three parties: Jimmy Jones, seller of the CHUMLEY LEASE; 3K Oil Trust, seller of the ISAIAH HILL, MADELEY, and ELLORA LEASES; and Treaty Energy, the purchaser. Total acreage of the four Leases is 580 Acres.
Treaty Energy will start to re-enter the MADELEY F1H (API#42-419-31028) well on Monday, July 9th. This well is drilled vertically to the Fredericksburg Zone and initially had a 16ft lateral extension drilled. The driller on this well was permitted by the RRC to go much farther laterally, but due to unexpected increases in well pressure for which they were unprepared lateral drilling was stopped far short of the potential that this well held.
Production of this well was 161 BBLS of oil per day at that point. Treaty Energy is permitted by the RRC to laterally drill this well to 1770 ft, but will not necessarily drill that entire length. Treaty currently is planning to drill to 1000 ft, but may drill farther if deemed prudent to do so. The well planners and geologists involved with this well estimate production to be up to 400 BOPD. Re-completion is estimated to take one week. Update will be provided to shareholders upon re-completion.
There will be at least two more wells drilled to the Fredricksburg Zone with similar laterals on the 3K Leases with estimated production by the well planners of up to 500 BOPD each based on well logs of similar wells close to the areas to be drilled.
The CHUMLEY LEASE contains one well that is producing at a current rate of about 45 BOPD. This well was originally drilled to 3380 ft at which time the well blew out causing complete destruction of the drilling rig. The well was brought under control by pumping cement down the hole up to the 1900 ft Saratoga Zone. At that point the well started flowing and production equipment was set in place to produce the well.
During the drilling and logging of the well four Pay Zones were found: the Saratoga Zone at 1900 ft; the Annona Zone at 2185 ft; the Tokio//Blossom Zone at 2500 ft; and the Fredricksburg Zone at 3380 ft.
The plan for the CHUMLEY LEASE, as per the Purchase Contract, is to drill and produce each Zone separately. Initially, Treaty will build four Two-Acre Pads on which four wells will be drilled. Each of the four wells per Pad will be drilled to one of the four Pay Zones previously mentioned. Each of the Two-Acre Pads is estimated to have initial production of up to 1500 BOPD or up to 6000 BOPD for the group of four Pads. The cost of drilling these wells is estimated at $165,000 for each of the Saratoga Zone wells, $190,000 for each of the Annona Zone wells, $215,000 for each of the Tokio/Blossom Zone wells, and $240,000 for each of the Fredricksburg Zone wells.
Treaty will pay for these wells from a combination of revenues from oil sales and investments by some of the substantial new investors that have taken equity positions in the Company during the last six months. At least one of these groups will be offered, and will likely accept, a seat on the Company's Board of Directors in the near future. This will be a great moment for the long holding supporters of the Company. Once the sites for the Two-Acre Pads are selected and permitted Treaty expects to complete the drilling program in 18 to 20 weeks.
The purchase price of these four new Leases is $7,375,000, and is structured follows: $175,000 for the re-entry and re-completion of the MADELEY F1H Well that will start on July 9, 2012; $1,200,000 that will be paid within 75 days; and the balance of $6,000,000 to be paid in shares of Convertible Preferred Stock that will convert at several different share price levels as the levels are achieved and maintained for a required time as per the contract.
Mr. Reid stated, "I am overjoyed at the progress that is occurring at Treaty Energy. There have been many programs implemented in Texas and Belize and all are coming to fruition at the same time. To remind our shareholders, we have drilling programs in West Central Texas for 12 shallow wells (500 – 600 ft); we are moving forward to drill 9 wells (2300 – 3000 ft); and we are currently drilling a well to (1700 – 1900 ft) on the MC COMAS A LEASE."
Mr. Reid added, "We have drilled our first well in Belize, the San Juan #2 well, which is showing promising results. We are already in preparation of the site to start drilling our second well in Belize and are seeking to permit an additional six wells to properly outline and define our oil play in the Stann Creek District of Belize. In addition, we will soon outline our plans for the 1.4 Million Acre Paradise Concession."
Mr. Reid concluded, "I am grateful to all Treaty Energy shareholders and stakeholders for their abundant support over the last couple years. I believe that we are all soon to benefit from all our efforts and be richly rewarded for our success."
Impressive financing. Going to have to do some DD here but that kind of money could really improve production and reserves.
American Petro-Hunter Announces $10 Million Credit Facility
Jul 9, 2012 10:50:00 AM
SCOTTSDALE, AZ -- (Marketwire) -- 07/09/12 -- American Petro-Hunter, Inc. (OTCBB: AAPH) ("American Petro-Hunter" or the "Company") is pleased to announce that the Company entered into a three-year credit facility with ASYM Energy Partners LLC and its affiliates ("ASYM"), a private investment firm focused on the energy industry. The credit facility, in the amount of $10 million, is secured by all of the Company's assets. Proceeds from the loan will be utilized to fund the development drilling of oil properties located in central Oklahoma as well as acquisitions, repayment of certain accounts payable, and working capital.
As part of the transaction, ASYM will advise the Company in the areas of operational, technical, engineering and financial matters. In addition, a total of approximately $2.7 million of liabilities were either forgiven or exchanged for common stock in the Company. This included the forgiveness of the Royalty Interest Payable, the exchange of equity for accounts payable that reduced the balance to approximately $0.3 million, and the amendment of the convertible debentures which extended the maturity date to six months after the maturity of the credit facility, and removed all liens and security interests. Also as part of the transaction, the 6% overriding royalty interest held by certain convertible debenture holders was contributed to the Company.
The Company intends to utilize the credit facility to initially fund the development drilling of the Company's North and South Oklahoma oil focused horizontal drilling program, primarily targeting the Mississippi Lime and the Woodford Shale. The credit facility will also allow the Company to participate for its full working interest participation and accelerate production as well as allow the Company to consider acquisitions of projects, production and leases.
Company President Robert McIntosh states, "We are extremely pleased to have closed this milestone funding arrangement with ASYM and are expecting outstanding upside for the development of our projects, especially with the welcome inclusion of added expertise bolstering our financial and engineering strengths. We have aggressive growth plans ahead and look forward to our new funding partner's active engagement that we expect will allow the Company to gain the necessary scale through significant production and cash flow growth. As we meet our business objectives, we should be in a position to migrate to an exchange like the NYSE AMEX or NASDAQ with the goal of providing increased liquidity to our shareholders."
About American Petro-Hunter, Inc. (OTCBB: AAPH)
The Company is an exploration and production (E&P) Company focused on the acquisition and horizontal development of the Mississippi Lime and Woodford oil formations located in Oklahoma and Kansas. The Company operates from its offices in Wichita, Kansas. Visit us at: www.americanpetrohunter.com
8% jumper today. Sign of good things?
They certainly believe in the future prospects for this asset.
500 BOPD is very impressive. Driver seems to have his hat on straight. Volume has been light and the price seems to be sagging. Seems promotional effect is wearing off any ideas what to expect next?
Yeah corporate spin is pretty much all the same. Swap out the name and pictures LOL. I agree I think McClendon is going to be on the way out soon. CHK is over leveraged in natural gas in my opinion and unless we mass produce LNG terminals I don't see any significant price increases any time soon. Selling off assets to finance debt is kind of like going in reverse. Pressure I am sure McClendon is feeling from the board.
Survival is key in my opinion here in this unstable economic climate and tough financing markets. I think the smart CEO's are using lower oil prices to acquire new reserves before prices go up again. Should be a nice gain going into 2013 for the right managed companies. ATPG could be one of them.
Thanks for the jump start, excellent DD.
Yeah it doesn't seem right. I think it would work so long as the funds produce the revenues and expansion of reserves required to justify a higher share price.
Yeah from what I can see this Lincoln funding is critical to progressing. I haven't figured out how much will service G & A and debts but the more going into production development the better the stock will perform. Time will tell...
The independent oil and gas explorer is driving revenue...more than most of it small cap peers can say. The $43 million company has generated $8.7 million in sales for the last twelve months (as of 1st quarter), which isn't a ton for an outfit of this size, but it's more than a glimmer of hope too.
Cubic Energy, Inc. has been threatened with a delisting since late last year, but appears to be staving off the conditions that would promote the AMEX to do it. Either way, QBC seems to be quietly building up some steam. Now we just need to see if it can unleash it.
Oasis Petroleum Inc. has an Analysts' Rating of 2.10 and 5-Year Projected Earnings Per Share Growth Rate of 26.67%. The short interest was 7.88% as of 05/24/2012. Oasis Petroleum Inc., an independent exploration and production company, engages in the acquisition and development of oil and natural gas resources in the Montana and North Dakota regions of the Williston Basin. The company's primary project areas include West Williston, East Nesson, and Sanish. As of December 31, 2011, it had approximately 78.
Oil and Gas Properties Data
On October 15, 2010, the Company paid $250,000 to acquire oil, gas and mineral leases on the Lozano and Marcee properties. As a result of the asset purchase, we own a twenty-five percent (25%) working interest in the Lozano lease, which is a currently producing asset with three wells. The Lozano lease covers approximately 110 gross acres and is located in Frio County, Texas. The Company has a one hundred percent interest (100%) working interest in the Marcee lease located in Gonzales County Texas. The Marcee lease contains one well, is being developed for production and has proved reserves.
As part of the Reverse Merger, the Company acquired an oil and gas lease in Anchorage, Alaska. Production on the properties has not commenced and there can be no assurance that any hydrocarbons will be economically recoverable; however, pre-production activities, such as a multi-phase exploration program of trenching, sampling, geophysical surveys and test drilling have commenced.
On January 28, 2011, United American Petroleum Corp. entered and closed a purchase and sale agreement with Patriot Minerals, LLC, a Texas limited liability company for a $5,000 payment to a consultant. The Purchase Agreement provides, among other things, that United American Petroleum Corp. shall purchase multiple undivided working interests to certain existing wells and to certain leases located in Texas. In connection with the Purchase Agreement, United American Petroleum Corp. formed a wholly owned subsidiary, United Operating, LLC, a Texas limited liability company, for the purpose of operating the various interests set forth in the Purchase Agreement. The properties purchased from Patriot Minerals by United American Petroleum Corp. are producing at December 31, 2011. The Company is currently undergoing various reserve studies to assess potential production and to continue the development of the wells purchased.
On January 28, 2011, United American Petroleum Corp. entered and closed a purchase, sale and participation agreement with Gabriel Rosser, LP (“Gabriel”). The purchase agreement provides that the Company shall purchase Gabriel's undivided 50.83% working interest and 39.131% revenue interest in the Gabriel 2 SWD Gabriel 3, 4, 5, 9, 15, Rosser #2 and #4 and Koi #1wells in exchange for consideration of $10 and the assumed and paid $84,975 of liabilities, which were owed to certain vendors of Gabriel. The properties purchased from Gabriel Rosser, LP by United American Petroleum Corp. are unevaluated and non-producing as of December 31, 2011, and the Company is currently undergoing various reserve studies to assess potential production and develop the wells purchased.
On November 4, 2011, United American Petroleum Corp. entered into and closed an Agreement with Alamo Energy Corp., a Nevada corporation pursuant to which United American acquired a 75% working interest in an oil and gas lease totaling approximately 110 gross acres located in Frio County, Texas and all wellbores and personal property related thereto for the total purchase price of $160,000. The Company currently has a 100% working interest in the Lozano lease, which is a producing property with three wells.
On November 30, 2011, the Company entered into and closed an asset purchase agreement with McKenzie Oil Corp. pursuant to which United American acquired a 100% working interest in what is designated as the McKenzie State Well No. 1, located in Pecos County, Texas, in exchange for an aggregate cash sum of $550,000 and 50,000 shares of the Company’s common stock valued at $40,500. The McKenzie well currently has one producing well valued at $80,655. The remaining wells are classified as unproved.
During the three months ended March 31, 2012 the Company capitalized $212,292 of development costs for the Gabriel Rosser and Marcee leases under the full cost method of accounting.
How much production do they currently have?
Projects
Key Project Facts
11 Projects (Producing)
Over 4,000 Acres
10 Counties
178 wellbores
United procures assets in one the nation's foremost energy producing states - Texas.
Producing and operating amongst industry giants such as EOG Resources (Mkt Cap 28.11B*), Devon Energy (Mkt Cap 25.92B*), Noble Energy (Mkt Cap 17.78B*), Cheasapeake (Mkt Cap 14.38B*) and Cabot Oil and Gas (Mkt Cap 6.69B*) UAPC is ideally positioned for rapid organic expansion.
United has 11 main projects, but also owns interests in many other projects.
Our operating division performs outsourced oil and gas services to other oil and gas companies. With our portfolio of well operations, we believe we have a secure, reliable source of income providing a stable base on which to build.
Please click on the links to the left to read about our specific projects.
* market caps correct as of Jan 25, 2012, as quoted on Yahoo! Finance
Seems the stock could justify support between $.30-.40 after the rest of the shake out assuming management has a plan b to the over priced promo. Thoughts?
Right about the time you get one of those mailers its time to consider a heavy short position. This fell off the plank a day or two after this post.
The upside? Once the promoters are cleaned out it could be an attract trade off the bottom should there be any merits to warrant such a move.
Lots of acreage which is great. What is the potential recovery of the underlying mineral reserves?
New Mexico Operations
Colfax County (The Raton Basin), New Mexico
222,855 gross acres of wholly owned mineral interests (fee simple)
Additional 2,400 net acres under lease
Look-alike geological analogue to the Tucumcari Basin producing gas to the south
Operationally similar to the Deep Cotton Valley / Bossier in East Texas at 15,000 feet
Resource potential of 4 to 7 TCF gas-in-place
Presently continuing development of geological data and analysis prior to implementation of drilling plan
*All acreage is approximated as of Fiscal Year End April 30, 2011
West Texas (Permian Basin) - Tom Green County, Texas
1,063 net acres under lease in the prolific Permian Basin
623 net acres are held by production by two wells
East Texas - Panola, Houston, Angelina and Cherokee Counties, Texas
9,053 net acres under lease in the East Texas Basin
2,366 net acres are held by production by four wells
*All acreage is approximated as of Fiscal Year End April 30, 2011
I did very well buying this stock in 2010. Been in a downward spiral since. This seems to make it an attractive pps. Would appreciate any feedback you can bring in reply to my due diligence.
When does SNRV find its bottom. Video about the company
Operation Plans and Focus
We are currently focused on completing our ST9-12A #4 well in Fisher’s Reef Field in Galveston Bay which was drilled in early 2012. In addition to this newly drilled well, our broader focus is on increasing production from all four fields in Galveston Bay and Trinity Bay. Based upon our geological review and analysis, there exists numerous opportunities within each field to quickly and easily increase production without the necessity of additional drilling. It is our intention to focus on this “low hanging fruit” and then proceed to consider additional drilling projects.
Specifically, Red Fish Reef Field which was recently brought back on-line having been shut-in for over a year, holds a great deal of additional potential. We will first focus on the production infrastructure of the field and then focus on the individual wells. One of our initial projects in the field will be to reduce back pressure on all wells by implementing the use of a pump on the production platform in the bay. This reduction in back pressure could increase production by as much as 15-25% before additional work is done to increase the production rates from individual wells. Of course, the next step is to begin work on those wells that have the most potential for the least risk. Our field study has indicated several high priority projects that we expect to initiate within the coming months, including several wells that require only minimal mechanical repair to reestablish production.
Outside of Galveston Bay, our geological and engineering team headed by our Vice President, Steven Carter, have been actively developing drillable prospects in South Texas as well as participating in drilling projects on a minority basis. Our recent successful participation in the Palacios #1 well is beginning to bear fruit and we hope to continue on this track. The focus is primarily on generating our own in-house drilling projects which can then be promoted out to industry partners and investors on a traditional third-for-a-quarter basis. This strategy reduces our exploration and financial risk to an insignificant level.
In this process, our geologists must first locate and research hundreds of potential prospects before finally discovering projects they believe have significant potential. After an iterative process of review and rework between our engineering and geological staff, these prospects must then be submitted to management for investment review at which point a decision is made to move the project forward and begin capital investment, which likely entails leasing acreage to secure the prospect, drafting and printing of maps and presentation materials for marketing, and finally marketing the prospect to potential investors and partners. Our exploration department has already identified at least 4 different projects areas outside of Galveston Bay that appear to have significant potential in excess of a million barrels of oil equivalent, primarily focused on oil-rich targets rather than natural gas.
A strong acquisition strategy is something I favor. From the recently quarterly. Go Driver!
Note 2 - Acquisitions
Galveston Bay Energy, LLC
On February 15, 2011 we closed on the acquisition of a private Texas oil and gas company named Galveston Bay Energy, LLC (“GBE”) which owns working interests in and operates producing oil and natural gas properties and its related facilities in four fields located in Galveston Bay, Texas. Immediately following our acquisition of GBE, we sold 15% of our own aggregate working interest in the Galveston Bay fields for $1,400,000 in cash to SPE Navigation 1, LLC (“SPE”), a company controlled by Michael Watts, who is the father-in-law of Jeremy Driver, a Director and our Chief Executive Officer. Our agreement with SPE provided that SPE could acquire an additional 10% working interest in the properties for $1,150,000 paid within 90 days of the acquisition. Effective May 1, 2011, SPE acquired an additional 10% of our aggregate working interest in the Galveston Bay fields for an additional $1,150,000 pursuant to our agreement. During the quarter ended April 30, 2011, we incurred $2,558,580 of acquisition costs, which are more fully described in our annual report for the year ended July 31, 2011, and which consist primarily of stock-based finders fees, in conjunction with this acquisition.
During the nine months ended April 30, 2012, we determined that we could estimate a range of potential loss associated with an environmental liability at one of the properties we acquired when we acquired GBE (See Note 11 – Commitments and Contingencies). We adjusted the purchase price allocation for the purchase by increasing accounts payable acquired and oil and gas properties acquired by the amount that we recognized, $112,500 ($37,500 of the cost was recognized with the acquisition of SPE, thus a total of $150,000 is accrued for this contingency). The adjustment did not change the identifiable net assets acquired.
SPE Navigation I, LLC
On September 23, 2011, Duma acquired SPE, which owned 25% of the working interest in the oil and gas properties originally owned by Galveston Bay Energy, LLC and 1,000,000 shares of Hyperdynamics Corporation, a public company traded on the New York Stock Exchange (NYSE:HDY). The total purchase price consisted of 3,799,998 shares of Duma’s common stock. We acquired 100% of the membership interest in SPE and thus SPE is our wholly owned subsidiary.
As of the acquisition date, the working interests previously owned by SPE were conveyed to GBE. Thus, all oil and gas revenues after the SPE acquisition were attributed to GBE. Our consolidated statements include the results of the 100% acquired working interest.
The transaction was a related party transaction because SPE was owned by companies controlled by our CEO, his brother-in-law, and his sister-in-law, and SPE was managed by our CEO’s father-in-law. The purchase price was calculated as $9,500,000, based on the quoted market price of our stock on the date of the acquisition. The assets and liabilities were recorded at SPE’s carrying value on the date of the acquisition and the excess purchase price over the net assets acquired was $4,367,750, which was recorded as compensation expense because this was a related party transaction. The transaction is intended to be structured, for tax purposes, as a tax-free merger, and as such, Duma would assume a carry-over basis in SPE’s assets. Consequently, a deferred tax liability was established.
Are they on track to exceed 1000 BOPD by year end? Do you happen to know how many barrels they have currently per day? TIA
Oh I see. I wondered why this one had taken such a nose dive followed by the reverse split. What other deals has he been involved in?
Do the charts auto update to the current date? I trade 90% oil stocks so I found it useful. If I see any missing I will let you know. Any exchange?
Completely agree. More production to serve the debt would be the answer but question is can they do it under their current financing.
Holy great ibox of charts. Nice work!
Interesting points on oil. $70 doesn't seem to far away but also doesn't seem very realistic (JMHO). The threats in the Middle East accelerating and Europe moving closer to resolutions we could see some pretty aggressive price movements.
Suffice to say I would welcome $70 per BBL for the very reason you pointed out, it creates a buying opportunity for many oil stocks, not to mention very attractive buying opportunities in the oil patch.
Great call, it turned on the day you posted that. I take it Hoffman is out of shares?
The only resaon I see the stock is down at this level is because Hoffman needs to cash up and is selling. I think this is a great buying oppoirtuunity
Does have what it takes to turn this one around?
Michael J. Newport
Michael J. Newport, our Company’s President and Chief Executive Officer, has been actively involved in petroleum land management for nearly thirty years, with experience in all phases of oil and gas land management and expertise in acquisitions, operations, divestitures, agreement preparation, negotiations, CAD mapping and broker supervision.
Mr. Newport started his career with Amoco in its New Orleans office in May 1979 where he spent two years. He was actively involved in supervising brokers and writing all forms of land contracts for North and South Louisiana, Mississippi, Alabama and Florida.
In 1981, Mr. Newport became a district landman for Harkins & Company in its Jackson, Mississippi office where he spent four years assembling drilling prospects and all land activities associated with operations in Mississippi, Alabama, Florida and Louisiana. From 1985 to 1989, Mr. Newport was posted to Harkins & Company’s Oklahoma City office where he had the same responsibilities for Oklahoma and Arkansas as well as Mississippi, Alabama, Florida and Louisiana.
Mr. Newport joined Greenhill Petroleum in 1989 in Houston, Texas, where he was the land manager for six years in the Permian Basin Region. In addition to land management activities, Mr. Newport was responsible for acquisitions and divestitures.
After leaving Greenhill, Mr. Newport has spent the last thirteen years managing brokers for West Texas, South Texas, East Texas, Oklahoma and North Louisiana as well as performing all landman management activities for various operators actively drilling and completing wells in these areas.
Mr. Newport received a Bachelor of Business Administration (Finance) degree in June of 1977, a Masters of Business Administration degree in August of 1978, and also completed the required hours for a Petroleum Land Management degree in May, 1979.
Very interesting article. Good points about declines in fracked wells. I think the biggest point is that natural gas is localized due to lack of LNG infrastructure, if that changes it could stabilize prices.
Good points to consider about what could happen.
I believe that value is its own catalyst, it is valuable to note that there are significant near-term catalysts that could re-price the stock up toward its intrinsic value:
Progress in achieving its Alaska milestones. Over the next few quarters, the company should achieve a production run-rate that validates its proved reserve valuation.
If the shares remain undervalued even after the company cranks out large positive free cash flow, we would expect stock repurchases to take place to further enhance intrinsic value per share.
Management is well-aligned with shareholders, and has strong financial acumen. The current President, David Voyticky, founded the value investing hedge fund Red Mountain Capital. The CEO, Scott Boruff is a former investment banker and crafted the "deal of the century" buyout of Pacific Energy's Alaska assets.
Achieving the higher production rates and cash flows will also enable Miller to dramatically lower its cost of debt. This will further boost profitability and help Miller explore and develop its vast probable and possible reserve base.
Buyout possibilities - the Cook Inlet has seen acquisition activity in recent years. As Miller enhances production and cash flows, buyout interest from private equity firms or larger independents such as Apache (which owns other fields in the Cook Inlet) should emerge.
Source: http://seekingalpha.com/article/322262-miller-energy-resources-looks-massively-undervalued
You know he must of played his contracts very well to have that exit strategy. Wonder what's next on his agenda, Disneyland?
I base most of my buy / holds on reserves and potential of recovery. The value of these assets is represented by the so-called "PV-10" of its proven, probable and possible resources.
The PV-10 is the present value of the net cash flows (discounted at 10% per annum) expected to be generated by the company's resources. Miller's Alaska reserve estimates were compiled by Ralph E. Davis Associates, a highly reputed reservoir engineering firm that has been in business since 1924.
Proven Reserves (P1):
10.4 million BOE
PV-10: $396 million
Probable Resources (P2):
7.9 million BOE
PV-10: $259 million
Possible Resources (P3):
30.8 million BOE
PV-10: 596.9 million