Oil and Gas Main (fka OGM)

[themetallurgist]

PPTL's $214mil project...

Premium Pretroleum annouced awhile ago about a huge natural gas project up in Canada. They wanted to keep the testing on "tight holes status" so that they could buy 2 more crown lease zones without compitition, but I found out that they bought 8 zones! This has not been released yet, but will be anyday. Better hope on the train... here's the DD.

I found where Alberta lists all of the oil and gas crown leases, who purchased, how much land, and for how much money. Here's Alberta's public offerings website that I found the info, ( http://www.energy.gov.ab.ca/1051.asp ) Look at the pdf for May 31, June 28, and July 26. It says that PPTL purchased 2 zones of 256 hectares of land (4-11-001, 002) in May; 3 zones of 256 hectares of land (4-11-002) in June; and another 3 zones of 256 hectares of land (4-11-061) in July, for a total of 2048 hectares (or 5060 acres total) at approximately $670,000 total.

I called the CEO, Bruce Thomson, after work and he said yes, that they did purchase a substantial amount of land, but wouldn't tell me how much. He also said that by the end of the month that they would come out with a PR stating how much and the test results. In a previous PR, they stated that a gas well three quarters of a mile away from their property that it has been producing 3.4 mmcf per day... that's the same as 3400 mcf, where 1 mcf=1mmbtu, and a mmbtu was $5.60 yesterday. This multiplies out to $19,000/day or $570,000/month, or $6.9 million/year. And that's for one gas well. From what I've seen, there's about 1 well per 160 acres... If PPTL has 5060 acres, that's about 31 wells. If they all produce that same amount of gas and have that many wells, which are doubtful, then that would yield about $214 million/year.

I'm sure it would take awhile for them to drill that many gas wells, but if you look at the all-star team of PPTL, these guys probably have great networking. Infact, they said in a previous PR that they were about to get a rig within weeks because of networking. The one well PPTL drilled, they said that Schlumberger did the work. Also, these wells are around 1,800 feet! That is VERY shallow so the wells would be drilled fairly quick. Normally it takes a week to drill around 4,500 feet and cost around $150,000 per well to drill and case.

One PPTL's website ( http://www.premiumpetroleum.com/ ) they meantion about the Whitemud prospect. Mr. Thomson told me that they were no longer interested in the prospect and that they would focus on Boyne Lake. He also told me however, that there were 894 million outstanding shares. I don't know what the float is, but that still is a hefty amount. That amount is high mostly from the merger with ZooTech, where they had a 1 for 1 stock deal. Mr. Thomson also told me that after the PR is out, that they will be hiring an Investor Relations company to help get their name out. I also read that PPTL only owns 75% of Boyne Lake and that Habanero owns 20%. Habanero already released the flow rate of the gas, which was 3.9 mmcf per day. This is more than the near-by well. Also, there has been a spam email thing going around, which might have dropped the stock way down.

Take this info for what you want. As always, you should do your own due diligence! If this is want you want to call it.