Petro One Energy Corp CUDBF

AlphaPortfolios Short In-Port Report: Petro One Energy POP.V

[alphaflight]

AlphaPortfolios Short, In-Port Report

Partner and financing:
 

• The partner is a division of the Korean Sovereign Wealth Fund. This partner is quantum leap over typical financiers in this space.  What does that tell you?
   
• The first-phase cash injection is more than the company’s current MCAP.

• No junior oil company land a joint venture of this magnitude in many years. Again, what does this tell you?

• This is an exclusive deal with one partner who will be a stable long-term holder.  When KMDC makes a bet this, they sit on the shares for years, while the company executes its business plan, creating a stable float.  As soon as people figure this out, watch the offers dry up. 

 
 
Phase 1 deal and cashflow:
 

• KMDC pays all the costs until the wells are paid back. POP takes no financial risk on any wells. POP remains the operator.

• KMDC gets cashflow 65% and POP gets 35% until the wells are paid off.  After that they split cashflow 50-50 (!)

• In other words, POP is front running risk-free cashflow on every well.

 
 
Phase 2 deal and cashflow:
 

• Within 120 days of Phase 1 completion, KMDC can elect to fund POP between $42,000,000 - $82,000,000 – bringing total JV up to $100,000,000 based on sensible share price, operational development, and performance criteria.

 
Summary:
 

• Investors will not find a joint venture deal this risk-free and favorable on the TSX-V.  Anyone else see a deal where someone pays you millions of dollars to first earn a 35% profit and later a 50% profit with no risk?

• Little press and promotional coverage, key people on vacation, for now provides a buying opportunity before drilling kicks in.

• This is generous funding for all of POP’s first-tier programs and beyond, for years.  There’s no need for any other partners or financings – all the way up until POP becomes a serious mid-tier producer, pumping out thousands of barrels a day.  Have you seen the share prices of companies in that league?

• This is an exclusive, bought deal.  The only way to get a piece of the action now is to buy in the market.

• Either buy now while everyone’s still trying to figure this out, or try to get in later, when the coffers are loaded and drills are spinning across all of Petro One’s top-tier targets.  The easiest money is made right at the beginning, when no one understands or knows about a deal.

• And now you know what I know.  How much you make after this is entirely up to you.  Me, I’m already thinking about an upgrade to a new Hanse 505. 

 
James Hudson, AlphaFlight Portfolios Inc.