Extract from yesterday's edition. GLTA
CRUDE OIL $97.44 -0.50
TAG OIL (T-TAO) $4.67 -0.12
VALEURA ENERGY (T-VLE) $1.06 n/c
In the sell-off we have seen in the resource stocks, one
must hope for a bottom somewhere, if only for the more
intriguing stories. After all, the price of oil is now in the
neighborhood of $97.00, which is a lot better than where it
has been much of the past year.
It still seems a little dismal for those companies that are
mainly natural gas and if you are invested in the heavy oil
companies of northern Alberta, where pipeline constraints
are causing net oil prices recently of as low as $52.00, you
know that they are currently are experiencing little joy.
But are stories like TAG Oil and Valeura Energy seeing a
bottom and a future?
We note Arno Richter of the Canaccord desk writing this
piece on Valeura Energy: “Giddy-Up Horsy. Shares of
Valeura Energy continued to trade higher as the market
anticipates an operational update from their exploration
activity in Turkey. In early January, the company’s partner
TransAtlantic Petroleum announced 2013 guidance along
with an operational update. In the Gaziantep area of the
Anatolian Basin of Turkey, TransAtlantic’s first horizontal
drilling location, Alibey-1H, tested 150 b/d of heavy oil from
the Mardin formation. Valeura holds a 26% interest in the
well, which has undergone first stage perforations only.
The partners expect to complete multiple intervals once
weather conditions improve and drill an appraisal location
during 2013. In the Karakilise region of the basin, TransAtlantic
has demonstrated the effectiveness of both horizontal
drilling and fracking with the Gosku-3H and Bahar-1
wells. These locations, which produced ~475 and ~575 b/d,
respectively, appear to have extended the prospectivity for
both the heavy-oil Mardin and light-oil Bedinan formations.
Canaccord Genuity International Energy Analyst Christopher
Brown commented that he uses a DCF analysis to
value both conventional and unconventional assets. Although
there is a potential return of over 500% to Brown’s
risked 2012E NAV of $6.90, he does not expect investors to
fully prepay for upside potential at this stage of exploration.”