January 16, 2013 - Calgary, Alberta -
Anatolia Energy Corp. (TSXV:AEE) rose 22% on 12.7M volume on Wednesday after the announcement of
Spudding of their Giremir-1 Well on the Sinan Licence in Turkey. Their 50% joint venture partner Calik will be drilling the initial exploration well on the Sinan Licence to a depth of 1,250 meters and results should be known within a few weeks. From the news release:
"Giremir-1 is expected to be drilled to a depth of approximately 1,250 meters for a total cost of US$1.4 million. The deepest horizon to be drilled will be the Upper Sinan Formation. Although its hydrocarbon potential is unknown in this area, the Paleocene age reservoir produces oil in 5 fields in southeastern Turkey; most notably at the Selmo Field which is located approximately 47 kilometres northeast of the Giremir well."
The company has a net cash position of over $5M as of September 30, 2012 which compares very favourably to their market cap of $7.2M. The bonus to Calik funding the initial well is that AEE ends up with a potentially hugely positive news event in a short time frame without an outlay of its own cash. Should they find hydrocarbons in the region, expect the stock price to rise even faster than it did in early May 2012 when it raced from as low as 12 cents on April 23 to a high of 33 cents on May 7 after the company announced their
Dadas Shale core results. The picture below shows the location of
Anatolia's assets and their close proximity to well-known oil producing nations.
Larger oil and gas firms like Shell have renewed interest in the area. They just started their
Shale Gas exploration program in Southest Turkey in September, right on the doorstep of several of AEE's assets. This heightened interest in Turkish shale gas assets certainly makes AEE a strong target for a takeover given their early success with Dadas. Reviewing Anatolia's
corporate presentation shows how close Exxon and Shell's projects are to AEE's property.
Another key driver for Anatolia's future success is the extremely favourable economic conditions for oil and gas exploration in Turkey. They will get Brent Crude prices for their oil and are subject to only a 12.5% government royalty and 20% corporate tax rate meaning margins inclusive of operating and transportation costs should be in the 55-60% range as estimated in their presentation.
Based on their news release on Tuesday, large oil and gas player interest right on their doorstep, their results from Dadas and the favourable economic environment in which they operate, AEE makes a very attractive investment both in the short term and long term for investors interested in oil and gas exploration plays.