PetroReef, PER.v/PTORF.pk C$.34
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Posted: Thursday Jul 15 2:41:30PM 2010
My faith has been tested but hopefully Petro-Reef will come thru. They finally have the approval to build a sour gas plant and start producing a nice oil well with 150-200bpd oil production. They are gas heavy so this is very important to boost cashflow. Hoping that the next drillings will be development wells near the discovery well that had the oil. With the plant built, they should be able to drill and bring them online before yearend and positively impact production and cashflow. Previous guidance was for .24 cashflow in 2010 WITH the oil well producing. Since the plant has been delayed, they will likely miss the .24 but should still get close. Need to see how the new well produces in September on AND whether they can drill development wells that are similar. Bobwins
Here is their latest presentation:
Press Release Source: Petro-Reef Resources Ltd. On Thursday July 15, 2010, 4:37 pm
CALGARY, ALBERTA--(Marketwire - July 15, 2010) - Petro-Reef Resources Ltd. (TSX VENTURE:PER - News), Petro-Reef Resources Ltd. ("Petro-Reef" or the "Corporation") is pleased to announce that it has received regulatory approval for the construction of a 4.0 mmcf/d amine facility in its core area of Alexander. Construction is scheduled to be completed by the end of August, allowing for Petro-Reef to bring onstream approximately 300 boe/d, including 150 - 200 bbls/d of crude oil currently standing behind pipe.
In anticipation of regulatory approval for the amine facility, Petro-Reef obtained approval for four drilling locations and is in process of obtaining approval for two additional development oil drilling locations. Petro-Reef intends to commence drilling its first well next week, with 2-3 follow-up locations to be drilled in early August.
On June 14, 2010, Petro-Reef announced it intended to raise, on a best efforts basis, up to $6,000,000 through a combination of flow-through shares and common share units. While significant interest in the offering exists, due to a combination of volatile commodity and equity markets, Petro-Reef has determined that it is in its best interest of the Corporation to postpone the equity offering until later in the year. At that time, Petro-Reef will have completed a substantial portion of its development oil drilling program as well as have completed construction of its amine facility which, upon completion, will substantially increase crude oil production and cash flow. With a substantial portion of its production currently hedged at prices significantly higher than current market prices, Petro-Reef is able to execute on key elements of its drilling program and complete construction of its amine facility in the absence of closing the equity offering.
Posted: Friday Apr 23 11:00:11AM 2010
PER.v/ptorf.pk +.05 to C$.51
No news about drilling or receiving permits for sour gas facility but Petro-Reef has been steadily climbing since I bought it at .37. Company says they have 40 oil well sites to drill and could expand to 80 if downspacing was granted. These are shallow, 50bpd oil wells so fairly cheap to drill but could dramatically change the rev source for PER.v, since they were mostly ngas until they hit these oil zones.
Need sour gas facility permits so they can build it and get behind the pipe production online and drill more oil wells!
Posted: Friday Feb 5 2:52:33PM 2010
I finally got around to looking at the Q3 oil/gas results from QIS this week. Based on my review, I decided to buy PetroReef.
PER.v has 84% ngas production. They are currently at 1050boepd but are forecasting 1400boepd for 2010 with .24 cashflow. So the stock is currently selling for less than 2X forward cashflow.
This is dirt cheap and is a great turnaround for the company. Thru Q3 in 2009, Per has produced .07 cashflow per share. So .24 is a pretty big jump but I think the main reason for the optimism is the oil well they hit. Oil is bringing in much more revenue than ngas and they have followup locations.
Here is the guidance PR:
Here is Q3: