$100,000,000 CAD to Drill 97 Net Drill Locations! This is the best news I have ever seen from a development drilling standpoint in over 40 years of investing on the TSX. To have a financial backer like the Korean Government is the Holy Grail within the financing, investment banking and or Joint Venture community. My hat is off to Petro One’s Management.
Petro One Energy has 9000 acres & this agreement covers only 2500 acres. Petro One will now have significant cash flow to develop the other 6500 acres at 100% ownership of production. I’m actually pinching myself while I’m typing this to make sure I’m not dreaming, because this is a deal made in heaven for current shareholders or anybody that is looking to become a shareholder. If you want to look at a stock chart to see what this share price is going to do over the next 2 years while these 97 development oil wells get drilled, take a look at WCP (WhiteCap Resources).
It’s public information by the Saskatchewan Government that 3,213 oil wells were drilled in 2013 and 3,107 were brought into full production. That’s over 90% success rate. Petro One Energy’s properties are surrounded by production and infrastructure. Think of all the recent buy-outs in Petro One’s neighbourhood: CanEra (over $1.1 billion) right beside Petro One’s property, and Novus being bought by the Chinese government, right next to another Petro One property for over $358 million. It’s obvious that we will be seeing 90% success rate with this 97 well program also.
Once the first oil well is drilled by Petro One and oil comes out I think we’re well over $1.00 a share and headed to $2.00 by the time the 3rd oil well gets spudded. The market will do what it always does and forecast forward while we’re on our way to $5.00 a share. With this kind of financial backing, $5.00 a share is probably 8 months away.
I just finished some research work on Petro One Energy with a close friend who is a 51-101 compliant Oil Geologist and we came up with the numbers below. My friend has worked in oil patches all over the world for multi-nationals. We served together in the Navy, so I trust him with my life and did many times. Anyways that’s a story for another day, now let’s look below at what these two seasoned Vets from the Forces and markets came up with.
These numbers below are based only on the here and now, my friend insisted on that. 9000 Acres *Average Land Value 4000 Acre*
Reserves P1 +P2 +P3 5,504,800 x 20barrel
Equity (Cash & Investments in Petro One Energy)
$75,328,929 divided by 74,000,000 shares out | = $36,000,000
=$34,194,800
= $5,134,129
= $75,328,929 Cash Value POP
=$1.01 share price now |
The best part: This valuation does not include $96 million of the $100 million that’s coming to Petro One from the Korean Government.
Basically, this stock is just a cash value steal up to $1.01, that’s why the Korean’s are putting equity in. Koreans are very smart and wealthy. Once Petro One starts drilling this stock should be $7.00 in 18mnths.
It’s obvious, you now know what to do……..