Urgent Update - Significant Discovery: Petro One Energy (TSX:V – POP)

Today’s news from Petro One Energy is simply outstanding, and I wanted to get a quick note off to my regular readers and followers.  If you’ve been following my blog, you’ll see I have been a fan of this company for some time and have posted my thoughts on a regular basis.  I had high expectations for POP’s exploration programs, and I have commented on the management team’s skill and past successes many times.  But quite frankly, I am extremely impressed by the results from this first drill program, which has all the earmarks of a landmark discovery.

It’s time for me to let the highlights of this press release do the talking.  The first hole of its first summer drill program has led to the discovery of a previously unknown light oil pool on the Company's 100% owned J5 property in Saskatchewan, Canada:

• This conventional vertical well demonstrated an excellent flow rate of 9.63 cubic metres (60.57 bbl) of light oil to surface in just 7.75 hours from the Viking sand at a depth of 736.5 m, without stimulation, swabbing or pumping.
• Flowing pressure in the tubing measured at surface was stable at 1,000 kPa throughout the flow period, indicating a reservoir of excellent quality.
• The well has been shut in pending installation of a separator and adequate tanks later this week, at which time it will be placed in full production.
• With oil flowing to surface on its own, and excellent reservoir pressures, a pump is not necessary.
• A final core analysis completed by Core Labs has confirmed excellent porosity up to 23.5% and unusually high permeability up to 3,980 mD over the perforated interval.
• This new oil pool is contained within an extensive Viking sand corridor on the J5 property indicated by the high-resolution seismic program shot by Petro One last spring.
• The excellent productivity of the 10A-15 well is explained by a highly porous and permeable basal channel facies that cuts across the main thick Viking sand fairway.
• As a result of this significant discovery, an expanded exploration and development drilling program of up to 17 additional wells has been planned on J5 to exploit the full potential of this newly identified reservoir.
• "Petro One is to be congratulated on discovering such an outstanding quality reservoir sand on their very first exploratory well", said Harold Ryan, P.Geol., Geoscience Manager at Chapman Petroleum Engineering. "It is very rare to find an untapped reservoir in the Viking that has such excellent porosity and permeability and can be exploited by conventional drilling.”

It is extremely important to note that this discovery is only Petro One’s first well drilled, and they have 18 locations in total on J5 alone.  And in case you missed it folks, this is an old-fashioned gusher—meaning oil is forcing its way out without the aid of a pump jack.  The flow rate and reservoir pressures are so consistently good that it indicates a huge find in terms of size, quality, and robust, long-lasting economics.  This is a light sweet WTI find – no fracking required!

This is the best Viking well I have ever seen, and unless someone can show me otherwise, I suggest this might be the best of its type in the history of Oil exploration of Southeastern Saskatchewan. 

I need to be totally clear—reservoirs of this type produce the kind of results that major companies, such as Husky, Exxon, etc. hope to find and put into production (and often struggle to do so).  Yes, these results really are that good and this first hole has the potential to be a company maker. 

This is an excellent start for this fast-growing junior producer, and I expect it will forever change the face of this company and stimulate powerful players in the Oil business to come straight at POP with offers.  They’re being tight lipped about the location of the discovery and have no doubt taken the necessary measures to stake up the best ground.  A lot of investors were watching this stock, but now expect significant industry interest in all POP’s exploration and development activities. 

Most importantly, Petro One has a number of targets undergoing active exploration at this time which I believe have equal or even greater potential than the barn-burning results we have seen from the first hole on J5. 

In my estimation equal, Petro One has explored less than 1% of the overall economic potential of its existing grounds in Southeastern Saskatchewan and Manitoba.

In my last post on June 6, I concluded that it was imperative to investors to pick up POP at that time, before the stock ran away from the crowd. 

Today, I take that back, but with good reason:  A start, with results of this type has grossly exceeded my expectations.  I mused that Petro One had all the characteristics of a winner, and it would finish strong.  But today’s results are more than a fast start.  They’ve achieved more on their first hole than most junior oil explorers and producers will achieve in a company’s lifespan.

This management team has done it before and is doing it once again.  I am adding more right now.  Petro One is a winner that is going all the way.