I had another listen to the GJ interview, I felt sorry for the poor bugger he sounded absolutely shattered (like the rest of us shareholders). No wonder the video camera was off during the interview, he was probably welling up during it or red with embarrassment.
A few interesting points stood out for me for me during the listening. Firstly GJ says that they are focussing on increasing production and that they are doing other exciting things in the Basin to assess the potential. What I believe GJ is referring to is re-entering the wellbore at Alvares and perform a flow test and I believe we will be getting an update on this very soon. This would align with the announcement made by Empyrean Energy two weeks ago when they specifically mentioned Alvares, and how it was also independent of Borba success.
“In addition, and independent of any potential success at Borba, with some COVID restrictions starting to ease, the Sacramento Basin JV partners are also keen to pursue the Alvares Prospect. Alvares was drilled for oil in the mid 1980s when gas was not a high priority target. The Alvarez well encountered some 10,000 feet of gas shows and flowed gas to surface from a very limited test of a 40 feet interval. The partners are currently investigating the permitting and logistics required to test the original wellbore integrity in order to potentially re-enter and carry out a more rigorous test program using modern day logs and perforating equipment.”
The good thing about Alvares is that it is has already been drilled to total depth (unlike Borba unfortunately), is an appraisal, had over 1.5 kilometres of gas shows, and is a relatively cheap exercise to re-enter the existing well bore and perform the flow test. The total (100%) unrisked recoverable prospective resource has been estimated at 2.4+ TCF (400 million BOE).
“Alvares is a large structure mapped with 2D seismic and interpreted by Sacgasco to hold prospective resources of over 2 Tcf estimated potential recoverable gas. A well drilled by American Hunter Exploration Limited in 1982 for deeper oil intersected 5,000ft of gas shows. No valid flow test was conducted due to equipment limitations and the deeper oil target failing. However minor gas flows to surface were recorded even with these limitations”.
The second interesting point was that GJ mentioned that they are looking at acquiring more oil production assets with Blue Sky. He then went on to mention that they also see opportunities in our backyard where they can be Operator. So I believe we may also be getting news on some local acquisitions very soon as well as some Canadian acquisitions, they are setting their sights far and wide imo.
This aligns with the announcements made regarding the acquisition of more oil production assets with larger scale production growth.
This from the SGC announcement; "The currently owned field are now experiencing solid cash generation and we look forward to communicating first revenue numbers very shortly. These leases have huge upside which we can realise from the current well inventory, facilities and acreage. Other opportunities currently being carefully assessed contain larger scale production growth potential."
This from the XST announcement; "Oil revenues are incoming shortly, and we will now focus on improving the production in Canada through workovers and assessing further potential acquisition opportunities immediately available to the Company.”
As well as the flow testing of the Kione in the next few weeks I believe that these are all potential catalysts in the near term and any one of them could cause a re-rate to the share-price from the current oversold levels.
As always DYOR there are just my thoughts, take with a grain of salt and do with them what you will (i.e. ignore, laugh, cry, smile, shake your head, put me on permanent ignore etc etc)
SGC Price at posting:
3.1¢ Sentiment: Buy Disclosure: Held
(20min delay)