TSXV:BNX.A - Post by User
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2511MacDonaldon Dec 04, 2009 7:21am
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Post# 16553424
Farm In - Jensen Property
Farm In - Jensen PropertyA farm in on the Jensen property has just been announced. This company has been inactive for the past year. Glad to see that they are still alive.
The Jensen pool is estimated to hold 20-30 million barrels of oil in place. Approximately 5-10% could be recoverable, meaning there is a potential recoverable resource of 2-3 million barrels. The downside is that this is a Madison formation with low porosity and permeability meaning that production will be lower but for a longer period of time. An average well might make 25-30 barrels per day, at best, but will produce steady for decades. The recent wells had completion problems and produced mostly water. The pay zone is estimated at 100 feet. There is a similar pool on the US side of the border still producing oil.
It will take capital to prove up these potential resources. The farm in partner will determine the overall potential of this field over the next 6-12 months. Other alternatives include horizontal wells.
A young landman and officer of the company (Ed Nunes-Vaz) purchased quite a few shares last summer. He joined the board after making this $300,000 investment. He must believe in this project to put this much capital on the line.
Based on the current activity, I rate these shares a buy with a ten cent target by year end. Ten cents is the price that Ed Numes-Vaz paid for his position last summer. This is also the price that creditors exchanged debt for equity. Blackrock Capital of Boston, Ma.,hold approximately 3.3 million shares. Plenty of tax loss carry forwards to defer future income taxes also.
Congratulations to Greg Bilcox and Ed Numes-Vaz for keeping this play alive throughout a very difficult year.