anyone have a look at the background of these projects?
several months back they were owned by Santa Maria Petroleum (then Quetzal Energy). Atzam, LasCasas and Tortugas blocks were the plan b assets. Quetzal was more interested in developing some Colombian oil and gas blocks. you can read all the history here SMQ on the TSX but I thought some things were notable
before the CEO and deserted, 1-10 consolidation, and name change to Santa Maria, Quetzal traded around $60-80m mkt cap
they had planned to spin off the Guatemalan blocks into a new listed with 1 new share for 15 Quetzal shares implying a $4-5m value for the blocks ($60-80m / 15)
in the yrs 2009-2011 Atzam#1/#2 produced about 6000bopa. Atzam#2 was producing 40bopd in late 2011 (up from 5bopd after stimulation) Atzam#3 had been production tested at 20bopd although LasCasas had tested 125 and 150bopd at C8 and C9 in 2005 and 2007. in 2011 testing produced 'inconclusive results' and Quetzal decided not pursue further drilling
the spin out was voted down, the CEO quit (to pursue other interests) and the Guatemalan blocks were sold to www.sgs.com for $1.5m (keeping 10% on Atzam#4/#5 and a 10% option on others)
six months later SGS is flogging the blocks to CGV whilst keep producing wells Atzam#1/#2 (?) as there is no mention of these in the transaction
I don't know much about oil and gas so can't really judge the credibility of a 1000-1500bopd flow rates for Atzam#4/#5, but in the context of Atzam#1/#3/#3 those numbers seem pretty big. are they a credible target?
as far as I can tell seems CGV didn't necessarily get an under-the-radar bargin, but got pretty much what they plan to pay for; a high risk, low probability ring-in type project
still, with a month of expectation build up ahead of us, big quoted targets and no one really getting paid/putting up till 4c, not sure about a buck, but should go 4c
CGV Price at posting:
2.6¢ Sentiment: None Disclosure: Held
