Pescod Late Edition
Analysts Kevin Shaw, Fred Kozak and a few other analysts are celebrating a certain victory on an oil and gas stock in South America...which is currently in registration so we can’t make any comment. However, we ask Shaw what would be the one play he would be looking at now for adventure...
As we are on the prowl for ideas all the time, Kevin Shaw of Casimir Capital comes up with an interesting thought, or at least it sounds like an interesting thought. But who would have thought oil and gas exploration in France? Sacre bleu.
In a very recent piece, Shaw takes a look at Gallic Energy and writes, “Initiating Coverage: Gallic Begins Operations in France’s Aquitaine Basin with the 1st of Multiple Conventional “Game-Changers” Targeting 400+ Bcf in a $9+/MMBtu Market. GLJ report highlights 466 BCF of resource potential being tested via two upcoming drills. With Gallic re-entering the Os- sun-2 and Azereix-1 wells, GLJ has estimated the in-place re- source potential of the targeted formations at 466 bcf OGIP. Older well data on Ossun-2 encountered three formations, combining for a best estimated OGIP of 176 bcf while two for- mations are targeted with Azereix-1, with best estimates 290 bcf and 1.5 mmbbls of condensate & oil in place.
First ‘Game-changer’ focuses on the high impact Ossun-2 sidetrack which starts within weeks. Gallic is planning on spudding a sidetrack at the Ossun-2 well location on the Ger permit, kicking-off near a depth of 1,344 m with drilling esti- mated to commence in early March. Success at Ossun-2 would be a pivotal step for Gallic, allowing it to fund a significant ex- ploration program in France. The company has identified addi- tional new drill locations & significant follow-up development work, contingent on the success of Ossun-2 and Azereix-1.
Cashed up and drilling forward on two large 100% W.I. blocks (Ger and Ledeuix Permits) in Frances’s Aquitaine Ba- sin; Discovered reserves on surrounding fields have seen ~12TCF & 120 mmbbls to date. GLC remains in a strong finan- cial position with $17mm cash and zero debt. A successful prove-up on just one of the upcoming high impact plays drilled back to back on the Ger permit would quickly place GLC in the appraisal & development mode with tie-in facilities located nearby. The Ledeuix permit also offers big gas opportunities with offsetting field discoveries in the 2 Tcf to 9 Tcf range. With gas prices at the $9+ / mmbtu level, gas is highly attrac- tive to develop and a sizeable “find” by GLC could be rerate this stock overnight.”
We should point out that a lot of analysts have had trouble over the last couple of months and all those targets that were set, some of them still seem a long way away.