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You'll probably have to wait until their September 17th AGM for any real news. This company obviously doesn't pump or promote. I am sure they are already producing oil. But going by the timing of past announcements, they will want to make sure the flow is steady, sustained, and producing the volumes expected for predictable and consistent results, before they announce anything. Quite a difference from many bulletin board companies, It's good to see a company that understands the difference between hype and creating real value for the shareholder. A shareholder meeting is a good time and place to bring people up to date.
Pretty sure they are "saving" any news until their AGM September 17, logical they would make all the announcements that day
Bitumen price of $45/barrel to break even, going by recent projects where start-up costs per flowing barrel have been up to $50,000 with stable production cost between $35,000 and $40,000 per flowing barrel.
No surprise. I've just finished reading the full research report.
New information in it is that the single well pair is expected to produce 500 bpd in which DWOG share would be 125 bpd. Even at $10 per barrel margin because of the very high costs always involved in the first production, that's $35,000 a month revenue.
Looking at the current differential between bitumen and WTI, and forecasting ahead, we should be looking at $17 to $20 per barrel profit after they expand production with the next wells.
Anything above $10 a barrel profit is commercially viable once you get to the 5,000 bpd production stage. Even at $10 bucks, 5,000 bpd gives them $350,000 cash a month on their portion of the working interest while others carry the costs.
Patience pays! I'm not a stock valuator, but my reading of their SEC filings tells me that even before production, this stock should be valued more than twice as high as it is now. The market agreed last year when the stock hit 60 cents, I just can't figure how 100K shares would trade at this level.
You are right, big share dump today.
After they announce first production results at their shareholder meeting in September, maybe they will start to get some analyst coverage so that these low 30s trades will come to an end.
Looks like they dodged another bullet. The royalty claim may have been total BS, but it still could have tied them up in court for years. . It's a lot easier dealing with a fake royalty claim of one per cent that someone might try to dangle over their heads, than a 6.5 per cent royalty claim.
http://finance.yahoo.com/news/deep-well-acquires-cancels-potential-120000599.html
Good to see the narrowing spread between bitumen prices and normal crude oil prices.
https://osi.alberta.ca/osi-content/Pages/OfficialStatistic.aspx?ipid=941
Makes the economics even more robust and by the time the reservoir ramps up to full production of 30,000 to 60,000 barrels per day, there should be access to Canadian tidewater on both the east and west coasts.
I believe we will be in a very different position by the end of September, when there will be production reports on the first month of production. The reservoir economics outlined in the DeGolyer report available in the Canadian SEDAR filing are really solid. Once production confirms that, it is my belief the share price will reflect the value of the company. I notice over on the Yahoo board some guy is claiming DWOG is a scam with no evidence whatsoever except a bunch of exclamation marks. I guess they don't know how to read regulatory filings or reservoir assessments.
Looks like we're into price stability now on the trading. But there's still a steady dump of about 40,000 to 50,000 shares every week. A few years back the guys who ran the TAMO boondoggle had their hands on a pretty big block of DWOG shares, as I recall from the court case that slapped them down. Wonder if they are the ones doing the dumping.
http://deepwelloil.com/news_rel/apr7_08.pdf
Good to see they've announced their AGM. I'll ask a friend to go have a listen. I'm too well known in Calgary to go myself and I don't want to be a distraction.
It's up on their website too:
http://deepwelloil.com/DWOG%202014-05-28%20See%20Thru%20Equities.pdf
Real Madrid, the upside is that once they get sustained oil flow, they can apply to have the contingent resources upgraded to reserves. That will value the oil higher, as contingent resources carry a much lower value than reserves. Plus they haven't really done the full exploration on about half of their land.
Thanks, great presentation. Way more pictures than their website has.
Wonder if it has something to do with the investor presentation in New York. Wayne do you have a copy you can post?
I'm waiting for August, too, and for the new technologies in SAGD.
Neil did a real good job a couple of years ago at the World Energy Congress pointing out all the advantages of SAGD. I remember his presentation showing how this is much more environmentally sustainable than other energy production. If you look at Figure 10 on Page 15, you'll see how adding solvent to the steam gets you a much higher recovery rate.
http://www.worldenergy.org/documents/congresspapers/250.pdf
It's going to be a good couple of years!
Looks like very steady daily trading volumes of 25,000 shares or more ever since their investor presentation in New York. Might still be some steady selling by those who acquired shares when they were trading for a nickel and want to cash out with a six hundred per cent profit.
Here is a very interesting and very encouraging article about the new breakthroughs in SAGD.
http://www.junewarren-nickles.com/feature.aspx?id=9541
It is really interesting that Imperial Oil is getting 60 per cent recovery from its 30 year old (still producing) CSS wells in Cold Lake. It now makes sense why our guys are looking at horizontal CSS for the next pilot project.
Going by the article, looks like this pilot will produce more oil, and become much cheaper to operate, as time goes on.
They will almost certainly want to evaluate production economics for at least three to six months before proceeding to expansion. Establishing the production economics, including the cost of upgrading the oil from bitumen to synthetic crude, getting oil out at the maximum possible profit, is much more important than quickly expanding to three wells. One well pair will give them lots of data to look at, so they can come up with the development plan that works best, to build out to 50,000 barrels per day by 2020. So I doubt there will be any more drilling until 2015. Getting it right is more sensible than doing it fast and leaving profits behind in the ground or on the table.
Not disheartening at all. It makes no sense to spend $11 billion to produce 100,000 barrels of bitumen, which then need upgrading into synthetic crude oil. That's the big-money economics of mineable oil sands, as projected by the Total engineering.
In-situ oil sands extraction is much cheaper, much less intrusive, and has no tailings or tailing ponds to deal with.
Recent costs for in-situ (last few projects) are about $35,000 per flowing barrel. Going by those costs, 100,000 barrels of in-situ extraction would come in at $3.5 billion capital expenditure (capex), which is about a third of the cost of the mineable project Total just scrubbed.
Nice try at propaganda, bud. You keep on hating DWOG, we will keep on buying it. Please sell us your shares! Put them on the market at 30 cents, and you can enjoy peace of mind instead of being full of hate at a company that is solidly managed and making great pogress towards first oil.
More detail from Pan Orient
Canada - Sawn Lake (Operated by Andora, in which Pan Orient has a 71.8% ownership interest)
Andora has a 50% working interest in the Sawn Lake SAGD demonstration, and is the operator. For Phase 1 of the SAGD demonstration project, one SAGD well pair was drilled in the fourth quarter of 2013 to a depth of 650 meters and have a horizontal length of 780 meters, and construction of the SAGD facility for steam generation, water handling and oil treating has been completed in 2014. Steam injection at the Sawn Lake SAGD demonstration project commenced on May 21, 2014. After three months of steam injection, bitumen production is anticipated in approximately August 2014.
Depending on results of the first SAGD well pair in Phase 1, Andora will proceed with Phase 2 of the demonstration project. The second phase would include the drilling of two additional SAGD well pairs and the associated expansion of the SAGD facility.
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.
Pan Orient's quarterly report out today:
Commenting today on Pan Orient's first quarter 2014 results, President and CEO Jeff Chisholm stated: "The first quarter of 2014 and subsequent period have seen positive results and significant progress made across all three of Pan Orient's operating regions. Of particular note, a significant milestone was achieved with first steam injection at the Sawn Lake steam assisted gravity drainage ("SAGD") demonstration project. With regard to recent political events in Thailand, we have not experienced any impact to our current operations and do not anticipate any impact on our planned future operations."
Highlights
First Steam injection commenced at the Sawn Lake, Canada, SAGD demonstration project.
While we are waiting for news, here's the clearest explanation I have seen of how the SAG-D production works:
http://www.cenovus.com/operations/technology/sagd.html
When you look at the photos on the Deep Well production website, you can see the exact same kind of tanks that Cenovus has in this illustration.
Good to see they are doing a road show.
According to their Quarterly Report filed May 15 on the Canadian SEDAR system, Deep Well has cleaned up the overriding royalty. They have an option to buy a 2.5 per cent overriding royalty for $1 million. Going by their earlier filings, this means 5.5% of the overriding royalty is now gone. That's a BIG relief. First the lawsuits, now the royalty, all cleaned up one after the other. Great to see the leadership here.
This is from the SEDAR filing. Couldn't get on to SEC Edgar system, seems to be down for some reason.
http://www.sedar.com/new_docs/all_new_pc_filings_en.htm
On March 18,
2014, as part of the SAGD Project agreement we had the right to repurchase a 3% GORR, from the operator of the SAGD Project at their
cost, that potentially encumbered six oil sands leases covering 23,405 gross acres (9,472 gross hectares) located on our Sawn Lake
properties. We have since repurchased the 3% GORR for Cdn $2,697,600 and have an option to purchase a 2.5% GORR for Cdn
$1,000,000
Maurel et Prom's other big Canadian play seems to be moving ahead.
http://thechronicleherald.ca/business/1201152-corridor-quebec-vote-no-barrier-to-energy-project
Good to see DWOG's development partner so strongly committed to Canadian oil.
Have you heard anything about an Annual General Meeting? i don't think they've had one since they got to the QB listing from Pink Sheets. Please let me know if you find out. Now that they're in the production phase, it's time they had one. It would be good to get some face to face answers.
I'm going to pick up what I can until the price reaches 48.8 cents, which is what Maurel and Prom paid to buy in to DWOG.
M and P has a market cap of $2.35 billion and had 2013 sales of $869 million.
They obviously see value in DWOG that's above and beyond the current market valuation. If M and P think they're going to make a lot of money after paying such a premium, and all the development costs of the pilot project, I want to be along for the ride.
Resource extraction is always a patience play, even in "proven" commodities.
The Coalspur mine in Alberta got conditional regulatory approval nearly four years after filing for government permits, and finally look like it's going to start mining this fall.
The heavy oil industry is even more regulated than the coal extraction industry, and the regulatory process can be even longer. This is because all the thermal extraction technologies are fairly new. Go back 20 years, and SAGD was an experimental technology. It is still being refined in its application. DWOG being cautious and releasing facts. There are others out there who report on promotional pumps every week which sound impressive but say little or nothing of real value.
Today's update suggests that the inspection was concluded, and the equipment must have passed inspection. That would be why the construction management team handed it over to the operations team.
The update says steaming will continue for up to three months, and that they expect first production around the end of July.
If you hate DWOG why are you on this board?
Thanks for the update, Wayne
That's it. I'm going to scrape together as much as I can to buy shares. I'm getting sick and tired of the manipulation. If somebody wants to keep driving it down, I'm happy to pick up now, while we wait for the oil to flow. If anyone is still trying to spread doubt by manipulating the share price after that production report, they deserve to be beaten at their own game by having others buy up the shares they've shaken out of the tree.
You always have faith in good leadership, and Horst is one of the best!
http://en.wikipedia.org/wiki/Horst_Schmid
I believe it's possible to drill between eight and twelve well pairs from a single pad, because of the horizontal legs. Think of a clock-face with a well pair radiating out from every hour mark.
Good job, Wayne. Looks like they listened to you! You must have a good connection with the boss.
http://deepwelloil.com/op_sagd.htm
I agree. But still, it would be good to see a DWOG website with pictures of what is going on up there. Anyone with background in the business will know what steamers, tanks and water treatment units look like. If they have finished building the production platform, we can tell from the photos. If it is still under construction, we can tell from the photos. I have no reason to doubt Pan Orient's release. Two of the three publicly-traded companies that are partners here are producing oil (Maurel and Prom and Pan Orient). Since Pan Orient says steaming will be in April (and we have about a third of a month left), it would be good to see what the facilities on site look like as of now.
Part of the selloff might be the truly stupid buzz in Calgary that Google Earth shows no installations on the site . . . probably didn't occur to these Einsteins that Google Earth isn't a "real time update"
So whoever shook the tree down to 15 cents yesterday, and bought that big block of shares being offered at 19 cents, just made a killing. This manipulation is beyond disgusting. Wonder if "hatingDWOG" posted just to shake the tree. If they picked up 100,000 shares as a result at a one-day profit ranging of up to 11.5 cents per share, it shows you that scare tactics work, no matter how slimy those tactics turn out to be.
Do you believe that the third partner in the DWOG Sawn Lake venture, linked below, also would fall for "BS Propaganda" considering they paid 48.8 cents a share for a stock that has been deliberately manipulated downward to 15 cents today?:
http://www.bloomberg.com/quote/MAU:FP