Audacious ASX Micro Cap to Drill Potential US$6BN Gas Resource
PUBLISHED: 28-08-17 MINUSTEXT SIZEPLUS
There’s something undeniably appetite-whetting about the combination of sheer grit, blue sky aspiration, and a formidably high-stakes play for speculative investors.
These kinds of stories are the ‘make or break’ variety, the likes of which are relished by risk-taking small cap stock investors.
Come late-September, today’s ASX listed gas micro-cap has a highly leveraged drilling event to look forward to.
It’s deftly snapped up a 20% earn in potential exposure to the Tulianyo Project – which has a potential in ground value of up to US$6 billion. That’s a net potential prize of $1.2 billion to this tiny company.
The Tulianyo Project has been independently appraised to host up to 6 TCF of recoverable gas – this is giant scale – and untested.
Drilling in 2014 at the project encountered multiple, stacked, gas bearing conventional reservoirs… however they were not tested due to mechanical difficulties.
Based on all work completed to date, the company is reckoning on a 50/50 shot at success.
Which we think are pretty good odds given the size of the prize.
But it may not suit your investment strategy or risk profile – so if you are chasing a safe, slow yielding ASX200 stocks – stop reading now or seek professional financial advice before making an investment decision.
This potentially monolithic conventional gas resource sits in northern California’s prolific Sacramento Gas Basin.
The Sacramento Basin has been a significant gas-producing province for decades, and more than 11 trillion cubic feet of gas has been tapped from its fields over the years.
The structure of the gas discovery is a large anticline with up to 91 square kilometers of closure. Here, there is a strong surface expression, gas seeps and gas encountered by historic drilling.
Historic drilling suggests that the entire anticline could be gas charged.
The structure is said to closely resemble a major discovery in Wyoming whose gas reserves have been estimated at up to 40 trillion cubic feet.
With its eye on a gross, unrisked multi tcf prize, today’s ASX gas junior is hoping to encounter something very sizeable when it commences an appraisal well in late September.
That’s right – this is an appraisal well – the discovery has been made.
Lending serious credibility points to the venture, is the company’s pair of strategic, high-pedigree partnerships. The goal is to leverage its outcomes by working in a joint venture capacity with its farm-in partners.
One of these is none other than California’s largest natural gas producer: California Resources Corporation (NYSE: CRC).
Not bad for a microcap ASX stock to have a company like this on its side.
The other is Cirque Resources LP, a private company based in Denver, Colorado, which is captained by well-known oil and gas explorer, Peter Dea. Highly leveraged appraisal drilling is set for September, merely a few short weeks away.
This project would therefore be prime for commercial development, with just moderate onshore-California development costs.
But if drilling is unsuccessful… Well, that’s it. No cigar.
We hasten to note again that this isn’t for the faint of heart.
But before we delve head-first into the specifics of the Tulainyo Gas Discovery and further detail what precisely is at stake, some introductions are in order. Unveiling:
MPE Price at posting:
0.2¢ Sentiment: Buy Disclosure: Not Held
