TSXV:CLAS.H - Post by User
Post by
willibrichon Aug 10, 2010 10:34pm
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Post# 17339878
Not really surprised by today
Not really surprised by todayToday's volume and price action do not really surprise me. . Having read the recent postings here, I am reminded that retail investors often trade on their emotions and ,sad to say, invest in a stock without doing much research.
I have worked in the oil industry and I know that there are many variables which affect the daily flow rates of producing oil wells. What is the reservoir porosity ? ,What are the pressure gradients in the formation ? ,what type of oil are we dealing with ? How much water and gas , if any is present ? How large is the pool of oil being tapped ?
We do not know. After flow testing of this well, many of these questions will be answered.
What we do know is that there is in excess of 100 feet of oil pay. Most of this is in the MIrador formation, the lowest one. Remember that ground temperatures increase by 25 degrees celcius for every mile of depth. The Mirador pay zone oil is under enormous pressure and is very hot.. This allows for greater flow rates.
We also know that this was a wildcat well and it will enable QEI to drill a number of development wells in the adjacent area. Mr. Robert Szczuczka and his very capable team are to be commended for their work. For this discovery is indeed a turning point for Quetzal. They are about to transition from mainly an exploration oil company to a producing oil company. A company that will hopefully be able to finance further exploration and development from it's existing cash flow.
I see that PMG has blocks 25 and 31 which are to the west and south. Go to PMG's April 13 press release which describes the Yenac-1 well producing 1800 bopd from 42 feet of pay in the Mirador formation. PMG is raising $ 550 million U.S. which will be used partially for acquisitions.
And at today's closing price, with a market cap of 37 million, QEI must look pretty tempting. I am thinking that QEI will be bought out before they have the chance to drill too many more development wells.
Anyway , I am a happy camper and will be content to wait for developments to unfold