QIS Update #3 2015 - March 10th 2015
Included in this update:
- Blackbird Energy reports initial test results from its two horizontal Montney wells at Elmworth
- Newlox Gold Ventures provides operations update, completes private placement, commissions NI43-101
- NTG Clarity has been awarded a $1 million contract
On Monday, our latest Weekly Summary was posted in the QIS Capital Forum on smallcaps.ca at www.smallcaps.ca/forum. These updates take a look back at the news and activity from the prior week as well as take a look at the week ahead. We also discuss how the markets have performed that week. In addition, at the end of each weekly recap, we either discuss a new stock to watch that may be worth your time in performing some additional due diligence or else we take another look at a stock that has already been highlighted in this section from a past week. Since Dec. 5, 2014, we’ve mentioned seven stocks in this part of the weekly summary and the average return has been just under 30% for this group. We look forward to providing the weekly recaps on the forum throughout 2015.
Please feel free to email us anytime at firstname.lastname@example.org or call us at (250) 377-1182. We look forward to your comments, questions, and feedback.
Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.295 (coverage commenced Aug 19/11 - $0.18)
Blackbird Energy Inc. has announced that its first two operated horizontal Montney wells, which are located at 06-26-70-07-W6 (06-26) and 05-26-70-07W6 (05-26) on Blackbird's 69 section land block at Elmworth, Alberta, Canada, have been successfully completed and tested. The 06-26 and 05-26 wells were drilled into the Middle Montney and Upper Montney intervals respectively, and both wells represent significant condensate and liquids-rich gas discoveries for Blackbird. Blackbird is operator and has a 100% working interest in both wells and its lands at Elmworth.
The 06-26 well, which targeted the Middle Montney interval, was drilled to a total measured depth of 4,734 meters, including a horizontal lateral of 2,052 meters. The well was stimulated with a 14 stage slick-water plug-and-perf completion with three to five perforations per stage, for a total of 51 intervals, and approximately 55 tonnes of proppant per interval. A total of 15,500m3 (approximately 97,500 barrels) of slick-water was pumped down-hole. The 06-26 well flowed on cleanup, recovering approximately 21.7% of its load fluid prior to being shut-in.
The 06-26 well was tested for 72 hours with a significantly restricted bottom hole choke (15/64 inch) due to infrastructure constraints, which Blackbird plans to mitigate over the course of 2015. Over the final 48 hour test period, the well was flowing up tubing with a flowing tubing pressure of 3,451 kPa (501 psi) and a bottom-hole flowing pressure of 19,440 kPa (2,820 psi) at a rate of approximately 407 boe/d (44% liquids), including 1.36 mmcf/d of natural gas, 133 bbls/d of 50 degree API condensate and an estimated 47 bbls/d of plant recoverable natural gas liquids (NGLs), for a total liquids to gas ratio of 133 bbls/mmcf. During the 48 hour test, the well returned approximately 717 bbls/d of load fluid, as the well is still cleaning up.
As is industry practice, the well is now shut-in to allow for the reservoir to imbibe load fluids and to gather further pressure data. Further testing is planned following spring break-up to help evaluate the well's potential.
The 05-26 well, which targeted the Upper Montney interval, was drilled to a total measured depth of 4,621 meters including a horizontal lateral of 1,951 meters. The well was stimulated with a 13 stage slick-water plug-and-perf completion, which included three to five perforations per stage, for a total of 49 intervals, and approximately 55 tonnes of propant per interval. A total of 13,800m3 (approximately 86,800 barrels) of slick-water was pumped down-hole. The 05-26 well flowed on cleanup, recovering approximately 32.3% of its load fluid.
The 05-26 well was tested for 64 hours. Over the final 48 hours of the test period, the well was flowing up tubing with a flowing tubing pressure of 2,100 kPa (305 psi) at a rate of approximately 466 boe/d (67% liquids), including 0.9 mmcf/d of natural gas, 281 bbls/d of 46 degree API condensate and an estimated 32 bbls/d of plant recoverable natural gas liquids (total liquids to gas ratio of 341 bbls/mmcf). During the test, the well returned approximately 1,077 bbls/d of load fluid, as the well is still cleaning up. As is industry practice, the well is now shut-in to allow for the reservoir to imbibe load fluids and to gather further pressure data. Further testing is planned following spring break-up to help evaluate the well's potential.
Garth Braun, Chairman, CEO and President of Blackbird stated, "Our team, which has more than 100 years of combined technical experience, including considerable Montney experience, is highly encouraged by the condensate and liquids-rich gas discoveries demonstrated by the tests of our inaugural Middle and Upper Montney wells which were drilled on time and budget. The slick water completion program that was implemented, may not demonstrate the highest short-term test rates prior to load recovery, but we believe will ultimately result in the highest rate of return and production over the life of the well. We are optimistic that further testing following break-up will allow for a more fulsome clean-up of the load fluid, and will ultimately demonstrate an increased presence of both condensate and liquids-rich gas, particularly given the over-pressured nature of the Middle and Upper Montney reservoirs discovered at our Elmworth project. Based on these results, it is our plan to continue forward with the aggressive delineation and development of our Elmworth project, beginning with the design and construction of a battery, which we anticipate will allow for tie-in by the first quarter of 2016."
QIS Capital: This will be our last update for Blackbird Energy although we will continue to follow the company and its progress. The market was obviously expecting higher test rates for the first two wells or it was simply another “buy on mystery, sell on history” scenario. It’s very important to point out that the wells were flow-tested on a significant choke (15/64 inch) and the pressures were some of the best yet in the area. An article in Baystreet.ca quoted “At a realistic surface flowing pressure of 2,100 kPa and a down-hole pressure of 15,240 kPa, we calculate that the well could produce at approximately 3.14 mmcf/d of natural gas and 417 bbls/d of liquids, for a total of 941 boe/d, representing a liquids to gas ratio of approximately 133 bbls/mmcf.”
We’ve had disappointments and excitement with Blackbird and overall we’re still almost a double (we were almost a triple) from our original Feature price. We wish management and shareholders the best of luck as the company develops their massive land position.
Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.075 (coverage commenced March 31/14 - $0.05)
Newlox Gold Ventures Corp. has announced a private placement of 1,000,000 units at $0.05 per unit. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share of Newlox for a period of up to two years from the date of closing for $0.10. No finders fee is payable in connection with this placement.
The company advises that, in accordance with its January 23rd announcement, a NI 43-101 has been commissioned.
Newlox Gold Ventures Corp. is a precious metals trading and environmental reclamation technology company. The company has secured access to multiple surface dumped stockpiles of historical tailings for reclamation. The company is not an exploration or mining company. It does not conduct mineral exploration, orebody definition, or mining.
Newlox Gold’s initial reclamation facility is operational and is continuing with the final stages of an expansion program designed to increase throughput. Its recently announced construction of a “Beneficiation Plant” has progressed to the point whereby an initial test run on March 4, 2015 has succeeded in liberating contaminates and precious metals from concentrate made from waste dumps, thereby confirming proof of concept, engineering, design and deployment. The company wishes to acknowledge the help from the Norman B Keevil Institute of Mining Engineering at the University of British Columbia and particularly Professor Marcello Veiga for their engineering support of this environmentally important undertaking.
The longer-term objective of Newlox Gold Ventures Corp. is to establish a dividend paying enterprise, which will allow its shareholders to participate in equity value growth, share in profits, and contribute to environmental clean-up while setting a high standard of social responsibility.
QIS Capital: Although progress has been a little slower than expected (isn’t that always the case?), this is a very exciting time for Newlox and its shareholders. The company has successfully tested its new benefication plant and after some continuing adjustments should be on its way to planned gold production. We expect to see further news on the plant expansion and benefication plant operation in the near future.
NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.30 (coverage commenced Feb. 4/10 - $0.045)
NTG Clarity Networks Inc. has announced that the company has received a contract from a leading mobile operator in the Gulf region to provide software development, telecom consultants, and project management resources. NTG has already started work on this contract.
"NTG has been working hard in the last few years to establish ourselves as a leading provider of quality telecom software products and services in the Gulf region. This contract reflects the increasing confidence and satisfaction of our customers in our extensive expertise in telecom systems and operator requirements." said Ashraf Zaghloul, NTG Clarity’s Chairman and CEO.
QIS Capital: Contract announcements have been a little slower over the past 6 months, but the company has sufficient work through at least the second quarter and is expecting further contract announcements throughout 2015. Management is forecasting revenues of over $20 million this year which is another 30% higher than its estimate of $14 million for 2014. We expect to see Q4 and annual results in mid-April.
Disclaimer: This article is for informational purposes only. The information contained within this article should not be construed as offering investment advice. Those seeking direct investment advice should consult a qualified, registered, investment professional. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The company profiled assumes no liability for the information presented. This is not a direct or implied solicitation to buy or se ll securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. The author(s) owns directly or indirectly 202,000 shares and 706,348 warrants of Blackbird Energy Inc., 2,504,000 shares, 1,000,000 warrants, and a $60,000 convertible debenture of Newlox Gold Ventures Corp. and 1,360,500 shares and 200,000 options of NTG Clarity Networks Inc. QIS Capital may have a financial relationship with these companies and may trade in the stocks mentioned. No stock exchange has approved or disapproved of the information contained herein. Copyright © 2003 - 2015 QIS Capital Corporation.