Next Oil Rush
FINALISED: 09-11-15 PUBLISHED: 09-11-15
AVD Secure Farm Out: Drilling Soon on 100M Barrel Target
Investing in oil exploration companies is inherently speculative in nature – but the fact that oil prices are currently hovering below $50 per barrel has sent some oilers the world over screaming for mercy.
However if you can identity a smart oil explorer, also one with a bit of luck, and that company makes a large commercial discovery, there can be swift, large uplifts in value – let’s face it, that’s why we invest.
The thing about low oil prices and tiny explorers is that they are often misunderstood to mean a lack of opportunity.
If anything, however, tough market conditions make the best opportunities more visible and tangible.
Let’s face it – any discovery made today at a cyclically low oil price won’t be commercialised until a few years down the track – by that time the oil price would have likely recovered, leveraging the value of the discovery further still.
What this means is that…
Swinging for the fences may be a great strategy in the heady uptimes, but in today’s oil markets, bunting could be a better bet.
So imagine a company that has found a sweet spot that reconciles the best of both worlds…
Antilles Oil & Gas (ASX:AVD) is it.
Partnering with other companies to reduce marginal costs and collaborating to share in both the risk and potential reward, AVD stands a better chance of success compared to if it went out to capture all the blue sky for itself.
At the same time, success is no guarantee for AVD, and it is recommended that professional advice is sought before investing.
AVD has just
farmed out 50% of its onshore Peruvian Block 105 to Uruguayan oil and gas fund Union Group, a multi-billion dollar resource fund operating globally.
Union will fund 75% of an onshore well to be drilled by AVD in the coming months for up to US$3M.
To put this in perspective, AVD is currently trading at a market cap of around $2M…
The exploration well will target a mean 29.6 million barrel shallow target and a deeper mean 100 barrel target.
Furthermore AVD has announced qualification of the Company to bid with partner Polarcus DMCC for an acreage position in offshore Barbados…
That’s a long term play that sits nicely with its near term ambitions.
With well-funded drilling to commence in the coming months and a top notch management team that has worked for majors such as Woodside and BHP, this could be an opportune time to take a look at this small $2M market capped company
before the inevitable rise in investor interest occurs in the coming months.
Which is why AVD has once again piqued our interest.
With that mind, we revisit:
Antilles Oil and Gas
ASX : AVD
