COD
instances where a junior company has exposure to huge upside (800BCF prospective resource – could be worth over $2b) but a relatively low risk profile.
Usually, projects like this are expensive to acquire; however, the relationships in the Ukraine and the way the deal has been structured (vendors are getting scrip and the only cash paid is out of cashflow) has resulted in a very attractive investment proposition.
It is a large licence onshore Ukraine in a mature petroleum province, surrounded by producing oil and gas fields and criss-crossed with infrastructure. Any discovery can be quickly and inexpensively commercialised.
A High gas price environment US$12/mcf and 50% netback makes economics very attractive.
Prospects partially proven by two historic wells:
• Shallow prospect no 1 = 130BCF – or ~$400m NPV potential. With a Company market cap of <$20m => 20x uplift – and this is only one of multiple prospects on the permit.
o Independent log re interpretation suggests large gas / condensate pay in good quality reservoir
o Cheap re-entry or twin well appraisal opportunity
• Deep prospect no 1 = 162BCF – also $400m NPV potential.
o More expensive to drill but larger follow up potential and likely to attract a farm-in partner
Near term catalysts:
• Updated resource (additional vintage seismic lines are likely to be obtained which should increase the confidence around the resource)
• Progress on farm-out of deep prospect (and possibly shallow)
• Acquisition of additional licences
• Chevron moved into the area next door to Cossack
- Forums
- ASX - Day Trading
- daytrading oct 25 morning
daytrading oct 25 morning, page-114
-
- There are more pages in this discussion • 52 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Featured News
The Watchlist
1CG
ONE CLICK GROUP LIMITED
Mark Waller, MD
Mark Waller
MD
Previous Video
Next Video
SPONSORED BY The Market Online