Sonoro Energy Ltd (SNV)

[MHT]

Why is SNV moving so slow?

You have to put everything into perspective; there is a reason for it. Richard Wadsworth is an ops guy and he has a real good reason for the timeline.

First as I stated in an earlier post, the awarding of the drilling contracts will be done this month. This should stabilize the share price, if not move it a bit higher. Then the construction begins.

Initially the Company was going to drill on top of the old abandoned well from 1935. However, when they got their hands on the seismic data, they noticed that the old well was not constructed on the highest pressure point of the oil reservoir.

Please refer to page 14 of the latest presentation ( http://www.sonoroenergy.com/upload/media_element/54/01/sonoro_corp_pres_june_v5.pdf . You will notice that the place to drill the wells is actually located 2 KM to the west of the old well. Next, if you look at page 13 of the presentation, you will notice that the old abandoned well is located 2 KM of the west of the highway; hence the new wells will 4 KM to the west of the highway.

Since they are now contemplating drilling 2 KM to the west of the old abandoned well, they now have to construct the required infrastructure (roads leading from the highway to the location of the new wells) that they had not contemplated before. They will use the month of July to construct the infrastructure required for the new locations.

They could start drilling in August, but are holding off for two reasons:

1) Ramadan. Although you could get some people to work during the religious holiday, they won't be as effective as they would after.
2) Rainy season. They will need water to extract the oil out of the ground. The rainy season doesn't start until September, in which time they can accumulate enough water to last until next year's rainy season. What's the point of drilling in August, only having to wait until September to extract the oil?

The terrain of the wells is located approximately 250 meters above sea level. Again, referring to page 14, the oil reservoir is located between 200 to 300 meters below the surface (+40m to -60m from sea level). Normally, it should only take 1 day to drill to this depth. However, since they are not familiar with this area's geology, they are going to take their time, constantly change the drill bits. Hence, it will take between 10 to 12 days. According to the seismic, they believe that this reservoir contains approximately 100 million barrels at this depth. They can always drill deeper at a future date.

I know it seems like it is taking forever; however, we've waited this long, so what is another month if they going do it right the first time?

Theoretically, the share price should be around $0.25 right now. Probably down, because the rest of the juniors are down. Nevertheless, there should be a significant move up mid-August as we get closer to the drilling date.