Streetwise report / Vast analyst
In a recent interview with Streetwise Reports, Wellington West Analyst Kevin Shaw, commented on Vast Exploration. Kevin lives in Alberta and believes there are few better places to invest than Canada's oil- and gas-rich provinces. But he also sees attractive international opportunities in such places as Kurdistan, the North Sea and Albania. "When you're putting a drill bit into the ground in Kurdistan," he says, "you're. . .'deep-sea fishing.'" In this exclusive interview with The Energy Report, Kevin explains why he's also big on the Cardium, Notikewin, Bakken/Three Forks and the Montney shale plays.
Kevin Shaw has extensive industry experience, including engineering, operations and management positions with Imperial Oil Resources, Trimox Energy Inc. and Colt Worley Parsons. Mr. Shaw has a B.Sc. in Mechanical Engineering with a minor in Petroleum; and an MBA from the Haskayne School of Business at the University of Calgary.
I thought you would be interested in reading his comments on Vast Exploration Inc. These are provided below.
Mr. Shaw's Comments:
TER: A recent Wellington West investment presentation deemed Kurdistan "the world's hottest exploration region." Please explain.
KS: Kurdistan has what we would call "mega play" potential. There aren't too many multi-billion barrel areas that have been under-exploited or under-explored. Kurdistan is one of those regions because it hasn't been open for business to oil and gas nations or entities under the different government regimes of the last 20 years. There's huge hydrocarbon potential there, contained within huge seismic structures. That's the attraction to Kurdistan. You've seen companies like Heritage Oil Corp. (TSX:HOC) and Gulf Keystone Petroleum Ltd. (LSE:GKP), the United States Short Oil Fund (NYSE:DNO) and others positioning in Kurdistan, as well as the smaller companies like Vast Exploration Inc. (TSX.V:VST), Longford Energy (TSX.V:LFD), Range Energy Resources Inc. (TSX.V:RGO) and others that are trying to tie up land positions as more and more management teams see the big rewards if you drill into one of these mega, multi-billion barrel discoveries. The discoveries are so big—it is one of the only places in the world you can still get truly "BIG" oil in place.
TER: What's the risk?
KS: The risk with Kurdistan continues to be the geopolitical environment between Baghdad and the Kurdistan regional government. At the end of the day, you've got over 35 international oil and gas companies in the area. Many governments around the world are trying to work with Baghdad and the Kurdistan regional government to figure out a proper business "law" to move the oil and gas industry forward. Kurdistan is definitely at a real primitive stage, in terms of having a business system and set of regulations for investment into the area by oil and gas companies. That's the risk right now, but there's a huge prize for the government to resolve this situation. I believe it will get resolved, but it may take some time.
TER: What are some junior E&P companies that you're following in Kurdistan?
KS: I cover Vast and Longford. Vast just spud a well a few weeks ago with Niko Resources Ltd. (TSX: NKO), a large international operator in the area. It's pretty exciting times for Vast right now. Vast has several large structures on their block in Kurdistan. Most of the blocks there are on trend with some of the major producing fields, whether it's Kirkuk or Taq Taq. When you're putting a drill bit into the ground in Kurdistan, you're—what I call—going "deep sea fishing." You're not sure what you're going to hit! Oil and gas has been hit over the last 12–14 months across four different horizons of interest. Whether it's in the Tertiary, Cretaceous, Jurassic or Triassic, there's a lot of hydrocarbon potential to change a company's stock price materially overnight.
Vast is currently drilling a large structure, which could easily be a 1 billion+ barrels find like that which Heritage hit not long ago. Other big players in the area that have drilled successful wells like Addax Petroleum Ltd. (TSX.V:SLG), which has now sold; and Gulf Keystone, farther to the north in the Kurdistan region, has hit some big finds. Both Vast and Longford are run by the same management team. The Longford block is a shallow development play that already has a number of vertical wells that were put into the block that did produce or show oil. We believe, Range Energy Resources is the cheapest trading stock in the Kurdistan space, currently, and could have one of the most attractive blocks in all of the Kurdistan region, nestled between the Heritage discovery and the existing multi-billion barrel Taq Taq field.
To see the entire interviewclick here.