1. Positives are contained in Kipp's post. Huge potential after big discovery well. Could double and triple production within the next year.
2. Negatives.
Latest report showed production has dropped a bit instead of increasing. In addition, there was mention of the dreaded word....WATER. Increasing water is a function of the field. It's a water drive field and PMG.to is gearing up to handle increased fluid production to stabilize oil production.
Latest Corcel well was disappointing. Didn't hit the mother lode like 10,000bpd potential of first well.
Overall production is well below capacity of wells due to lack of pipeline. That is being built and should be hooked up late 2008. Building pipeline well over current capacity, indicating company is optimistic about future results.
3. Overall, this remains a big growth story. In addition to the Corcel field, PMG.to has over a million acres of prospective land to explore. They are also bidding on additional heavy oil leases. Colombia is next to Venezuela and has substantial resources of heavy oil. THAI should be a big help in extracting this oil in a cost efficient manner.
Mgmt is a big plus as they are shared with PBG.to. PBG is my biggest holding and represents over 20% of my portfolio. I originally missed out on the big PMG run because I figured I was already benefitting thru PBG. But I looked at the huge growth and decided to buy PMG also because the growth potential is higher than PBG. Probably higher risk than the Bakken play with PBG but very high potential for production and cashflow. Fiscal regime in Colombia is very pro company and PMG has very high netbacks.
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