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If that is true, than why does Norwest say this in the report?
"The major factor is that, at present, there is no
pilot project that is applying in-situ recovery methods to bitumen in a hardrock carbonate host that can be used as a demonstration of recoverability. Not only is this
the case for Canada but there are no suitable examples anywhere in the world. This means that existing pilot projects in clastic hosts, which have different physical
characteristics from carbonates, have to be used for performance prediction."
I will respond to your major arguments.
"You point out that both Shell and Strata have bitumen in Bluesky and Gething clastic Cretaceous Formations, yet because some is in carbonate formation, they can't get anything. "
It says in the report that Shell's bitumen is in the upper clastic formation, and that ALMOST ALL of Strata's is in the lower carbonate formation. I never said, ever, that they "can't get anything," or that they won't be able to get the bitumen in the carbonate.
"So, are you saying Norwest intentionally misled us? I want to make sure, legally, we have them over the barrel. Since Shell is one of their clients, I guess I just assumed that they know what and where SHELL HAS BEEN SUCCESSFUL, but apparently, you feel that they misled us. Interesting. The major engineering firm in the field has lied in a report, saying NPV of $1.2 billion. That they will get 55,000 barrels a day. That THE MOST LIKELY RECOVERABLE AMOUNT IS 580 MILLION barrels."
No, of course they did not lie, and I never said they lied. When they estimaed the NPV of $1.2 billion however, they assumed that Strata's carbonate would have the same extraction characteristics of clastic rock. In my opinion and the opinion of most, this is a very unconservative assumption. They say it in the report on page 28, "This means that existing pilot projects in clastic hosts, which have different physical
characteristics from carbonates, have to be used for performance prediction." Therefore the NPV of 1.2 billion is only valid if the bitumen comes out of the carbonate rock as easily as it comes out of the clastic rock.
perhaps...
Raiders,
That is very bold of you to write that I am the one that cannot read. Here is just a taste of what you have written this last month:
3/19 “i dont mind hereing both sides”
3/19 “he dos'nt own a share”
3/19 “if you have any doubte call them”
3/13 “stop falling and settle in the dollar rangs”
3/12 “some would leave you to belive”
3/12 “i would have sold when it went too 1.96”
3/10 “what will tomarrow bring”
3/10 “keep lowering the price mite as well buy on the cheap”
3/10 “wish the MM will guit playing games and this move higher”
3/7 “I cant belive we did not make 2 dollars”
These are not just typos. You clearly lack a fundamental understanding of the English language. In the future, please refrain from insulting and name calling on this board. This board is intended as a medium to exchange information, ideas, and research about SOIGF. It is not intended as a forum to insult each other.
~fenix
Cag, what could they release right now that they know that could cause this stock to move? Keep in mind that the Norwest report clearly stated that they do not know if the oil is extractable until tests are done.
the report: http://www.sec.gov/Archives/edgar/data/1227282/000093980208000123/form6k030508ex99-1.pdf
Here is where Shell is currently producing from on their Carmon property adjacent to strata, page 16:
"According to public documents prepared by Shell personnel, their Carmon Creek bitumen deposit is mainly contained in two zones, both of which are in the Lower Cretaceous Bluesky Formation. They describe the upper zone as consisting mainly
of siliciclastic sediments of fluvial origin. The lower zone is described in one report as being of estuarine origin with brackish marine characteristics but mainly including
clastic sediments and only a small amount of carbonate."
This is a clastic formation, which has no characteristics or similarities to a carbonate rock.
Here is where Strata's oil is:
page 13
The target zones within the Cadotte leases include:
• Bluesky and Gething clastic Cretaceous Formations and
• Debolt Formation and Elkton Member carbonate Carboniferous units
page 16
The Debolt
is the principal ore zone at Cadotte.
Almost all of strata's bitumen is contained in the carbonate rock.
page 28
"However, in the
Cadotte lease case there are several factors, and one in particular, that prevent such a resource classification being made. The major factor is that, at present, there is no
pilot project that is applying in-situ recovery methods to bitumen in a hardrock carbonate host that can be used as a demonstration of recoverability. Not only is this
the case for Canada but there are no suitable examples anywhere in the world. This means that existing pilot projects in clastic hosts, which have different physical
characteristics from carbonates, have to be used for performance prediction."
From Strata web site
"cold production has been successful (Blackrock produced bitumen from carbonates using conventional production)"
Not to be a downer (which I keep having to be), but this is straight from the Wikipedia article on tar sands cold production:
"It has the advantage of being cheap and the disadvantage that it recovers only 5-6% of the oil in place."
Do the math, Strata's bitumen is not economic with a 5-6% recovery factor. They need to investigate other in-situ technologies with their pilot wells that could possibly have higher recovery factors. The fact that cold production might work does not help Strata.
As Cag said, people who are impatient. Some people expected to find out whether or not their deposit was extractable from the last press release. Now many people realize they may have to wait over a year for Strata's pilot tests. Many people do not want to wait a year to see a return on their investment.
Yes they are in the process of constructing pilot wells, but have not conducted any tests yet because they are not complete. They may be able to tell you that they can get some bitumen out of the ground, but they cannot say yet whether or not it will be economic. Oaklandraiders, again I point out the fact that this board is for anyone interested in SOIGF, not just owners of the stock.
Obviously there is some up-side or I wouldn't be here. Just a little too risky for my taste at the moment. Oaklandraiders, I am sorry if you don't like to hear both sides of an argument but thats what this board is for!
If I call strata they will say their processes haven't started yet, and they still need to test the reservoir bitumen's extractability. I am not saying that anyone is wrong for investing in strata, just that I am not willing to take such a large risk with my money until I know more details about how they will extract the bitumen. These do not have to be Strata's results either, if Shell were to release that their pilot tests in the carbonates next door went very well, then I probably would buy some Strata immediately, as the risk to my money would be much lower.
Cvet,
Are you invested in Strata? If yes, explain why. If no, why do you think the stock price is hanging in around a dollar, up from .25 in Sept.?
No, I am not invested in Strata. I am interested in this company because of the large up-side potential if things pan out well for SOIGF. The reason I am not invested in strata is because there is a huge down-side potential as well. Strata has no proof whatsoever that their bitumen will be economically extractable, and all pilot tests so far by other companies in carbonate rock point to the fact that it will be much more difficult and less cost effective to extract bitumen from a carbonate if economic at all. If the pilot tests show that the bitumen is not economic, this stock will be at $0.10 in a flash. There is a huge risk involved in this investment that most do not consider. Because of this huge risk, I do not wish to own any SOIGF at the moment. I think that because SOIGF has such a small market cap, it is off limits to many large funds. I will wait until I know more about the extraction processes in carbonates specific to the Peace River area before I invest, and I believe I can still make a lot of money with very little risk this way.
The share price is hanging out at a dollar because SOIGF has no proof that their bitumen will be economically extractable. It went up from 0.25 because they announced that they had discovered bitumen on their land.
Why also did an Indian company just buy 1.7 million shares at a dollar?
Many people ask questions like these without realizing the flip-side. Why did people sell 1.7 million shares at a dollar?? Every share bought is a share sold, for every believer there is a non-believer. One company or person buying a lot of shares only shows their confidence in the company, and others lack of confidence.
t-soprano1,
Your pumping is not justified and all your statements are merely exaggerations of the truth. To say Shell is "going crazy on the carbonates" is very misleading. They will be testing them out the same as SOIGF. They are currently NOT producing from any carbonates.
"POSTED ABOUT BQI BY SOMEONE ELSE,,BUT I THINK EVERYBODY IN SOIGF SHOULD READ TOO. EVERYTHING IN IT IS ALSO ABOUT SOIGF, AND MATH DONE WOULD VALUE SOIGF AT $7 AT SOME POINT IN THE FUTURE. AS CVET SAYS,,,THAT MAY TAKE A YEAR+. "
BQI and SOIGF are NOT comparable companies at the moment. All of BQI's bitumen is contained in actual SANDS, not carbonate rock. This means that the permeability is on the order of 5 darcies, which means that it is very free flowing. In Norwest's report, they cite that other companies with carbonate deposits have a permeability on the order of 0.3 darcies. This means that BQI's oil will be MUCH easier to extract, and have higher recovery values. BOTH of these companies are currently in the process of pilot well testing, although BQI is further along than SOIGF. BQI is hoping for a recovery factor of 60-80%+, while SOIGF is hoping for a recovery factor of 10%+! BQI knows that their bitumen will be economic to recover, just not how economic, while SOIGF does not even know if their deposit is economic. Making a direct comparison of these companies is NOT valid, and this is reflected by their market caps.
BQI market cap =800 million
SOIGF market cap =50 million
"maybe I should mail all the PR's to my step dad's oil geologist brother and settle it"
the PR is not what is actually important. The full report tells the story.
Yes, the news is neither bad nor good. It basically says what everybody already knew.
"AGAIN,,, ANY COMMENT OF "carbonate rocks" IN REPORT?"
why dont you just read the report yourself, or look at my old posts that cite the report
Yes, I read all of those links you posted, and yes there are other carbonate projects also trying to develop out there. However, it clearly states that there is not a single company commercially producing bitumen out of a carbonate yet in canada. Both Shell AND Husky are also in the initial stages of testing because getting it out of hard rock is a lot more difficult than out of a sand. The rock has a much lower permeability (50-300 millidarcies, or 0.05 to 0.3 darcies) while a sand has a higher permeability (1-10 darcies). This plus the viscosity of the bitumen present determines how easily it will flow to the wells when heated.
Yes, Shell purchased that land for less than $0.10 a barrel. They have not yet produced any bitumen commercially from it, and are in the same position as strata. They plan to build some pilot test wells and see what kind of recovery factors they can get as well.
"but it doesn't change the fact that Shell and others are buying these leases and extracting oil from the carbonate"
I am only posting citations and facts from the report which is located here: http://www.sec.gov/Archives/edgar/data/1227282/000093980208000123/form6k030508ex99-1.pdf
Here is where Shell is currently producing from on their Carmon property adjacent to strata, page 16:
"According to public documents prepared by Shell personnel, their Carmon Creek bitumen deposit is mainly contained in two zones, both of which are in the Lower Cretaceous Bluesky Formation. They describe the upper zone as consisting mainly
of siliciclastic sediments of fluvial origin. The lower zone is described in one report as being of estuarine origin with brackish marine characteristics but mainly including
clastic sediments and only a small amount of carbonate."
This is a clastic formation, which has no characteristics or similarities to a carbonate rock.
Here is where Strata's oil is:
page 13
The target zones within the Cadotte leases include:
• Bluesky and Gething clastic Cretaceous Formations and
• Debolt Formation and Elkton Member carbonate Carboniferous units
page 16
The Debolt
is the principal ore zone at Cadotte.
Almost all of strata's bitumen is contained in the carbonate rock, and shell is NOT extracting any bitument from their carbonate rock, nor is anyone else in the world.
page 28
However, in the
"Cadotte lease case there are several factors, and one in particular, that prevent such a resource classification being made. The major factor is that, at present, there is no
pilot project that is applying in-situ recovery methods to bitumen in a hardrock carbonate host that can be used as a demonstration of recoverability. Not only is this
the case for Canada but there are no suitable examples anywhere in the world. This means that existing pilot projects in clastic hosts, which have different physical
characteristics from carbonates, have to be used for performance prediction."
I am not saying that there is no chance that the bitumen could be extracted, just that no one is currently doing it or has ever done it. This is why the market cap is currently about 5% of the NPV, because of the risk associated with betting that the bitumen will be extractable.
" so the fact that Norwest says the most likely amount to be recovered, IN SPITE OF THE CARBONATE FORMATION, is 500 million barrels plus,"
This statement is not true. In the report on page 28 Norwest states that they assumed the host rock was CLASTIC to get probable recovery factors (not carbonate, like stratas rock), because there has never been an extraction of bitumen from a carbonate host rock before anywhere in the world.
If strata does in deed construct pilot wells, they will be the first to try. If the pilot wells are successful, then that will truly move the stock. However, those results would be about a year away.
Want to know why this stock is still sitting at $1?
Page 28 of the report:
However, in the Cadotte lease case there are several factors, and one in particular, that prevent such a resource classification being made. The major factor is that, at present, there is no pilot project that is applying in-situ recovery methods to bitumen in a hardrock carbonate host that can be used as a demonstration of recoverability. Not only is this the case for Canada but there are no suitable examples anywhere in the world. This means that existing pilot projects in clastic hosts, which have different physical characteristics from carbonates, have to be used for performance prediction.
All the report said is "if" they can get the oil out, they will make a lot of money, which everybody already knew before the report.
sorry i read this a while ago and have nothing to cite. im sure if you do some DD you could find the info though...
actually, shell drilled some holes on this land and discovered the bitumen back in the 60s i believe. everybody knew there was some bitumen there, and shell had a chance to buy it when strata did but chose not to.
I didn't say Strata wasn't possibly a potential takeover candidate. I'm just saying that comparing the Blackrock takeover price to Strata is irrelevant, and that even if the news is good they would have to spends hundreds of millions over a period of years to develop their site to ever get a price like Blackrock received.
wasnt blackrock already producing when they were acquired, something strata is at least 3+ years away from being able to do? doesnt that make blackrock a more valuable company than strata, as hundreds of millions will have to be invested in order to begin production?
So why not just buy at $0.50 then instead of now?
I would consider loading up again at $0.70, but it probably will not get there. I am fine with missing the initial jump and buying at open if the news is indeed that good, but I do not feel as confident as you do to be a holder now.
Did you just reply to yourself using the "grapeman" alias? Both messages are signed "Cvet". I am not an investor right now, just a speculator. I bought in at the news of the find and sold half at 1.90 post-split and half at 1.50 post-split. I will buy in again if the opportunity presents itself, i.e. great news or if price dips low enough.
what makes you think it will be 30% recoverable? There is no carbonate field in all of Albera with those numbers, which is why there are no carbonate fields in production.
Everyone here forgets that all of Srata's oil is contained in carbonate formations. I don't know of anybody currently producing out of a carbonate formation in Alberta, although Shell and Husky have plans to. Once other carbonate operations go online or Strata proves that this resource is economically feasible the stock price will rise.
you act as if you already know that the news is good. do you know for sure that the geology is favorable?
what pathetic volume so far today....least the sellers aren't giving in too much
No it has not been announced yet, although it has been approved by the shareholders. TDAMERITRADE interals say that it is OCT 10.
Looks like we're headed towards another million share day! Guess people are getting word of the split..
Why does it say 4:2 split instead of just saying 2:1?
here a link to what i saw
http://research.tdameritrade.com/public/stocks/overview/overview.asp?symbol=soigf
look in the bottom right corner under the events tab
Stock split announced! On my investment calendar it says, "October 10 -- Stock Split 4:2". Does anybody know why it is 4:2 instead of just saying 2:1?
Do you know what their recovery rates are?
Yes, but do we know anything about recovery rates or even if this resource is economically extractable?