Streetsignal reportGreetings to all PRD investors.
I thought you may enjoy this, although it is quite lengthy, it give great insight into the company and its potential.
Enjoy,
AR
Date: Tue, 18 Dec 2001 20:32:41 -0700
>
>StreetSignal Premium
>_____________________
>
>EARLY STAGE OF A NEW (AND VERY LARGE) CANADIAN OIL/GAS PLAY
>
>Applies to
>
>Pacific Rodera (PRDCDNX $0.13) and International Frontier (IFRCDNX
$0.30)
>
>http//www.stockhouse.com/comp_info.asp?symbol=PRD&table=list
>http//www.stockhouse.com/comp_info.asp?symbol=IFR&table=list
>
>For the past 2yrs, a small group of companies has been building a
massive
>land position in the Central Mackenzie Valley of the NWT. I have read
>prior articles that this region could theoretically host a massive oil
&
>gas field. It has managed to attract 3 of the largest exploration
>companies in North America who combined have a total market
capitalization
>of approx. $25 billion. As strange as it seems, the other two
companies
>are ridiculous little players that trade on the CDNX and combined have
a
>market cap of $3.5 Million.
>
>International Frontier (IFRCDNX $0.30) actually seems to offer the
>greatest leverage but my main concern is the serious lack of liquidity
and
>because they hold positions that range from 10% to 22%, the cash they
will
>need to participate is substantial. To date, I have seen very little
>effort on their part to raise money for this region and this is
somewhat
>troublesome. It does not mean though, that they will not farm out part
of
>their interest to cover the cost. The other concern I have in the
short
>term is that drilling will start in this first phase (Jan/02) on the
>EL-401 field and I've worked on this all day and still cannot locate
where
>they have a % of this field. With IFR it may actually be better to
wait
>and see how this first phase of drilling goes as any serious success
will
>open this play wide up. The other option is just to bottom fish over
the
>next 30 days and try to get stock in the 0.20's.
>
>Pacific Rodera was complicated to finally determine their % interests.
>They range from a low of 1.89% (EL-401 being drilled in January), to
an
>otherwise average of 6.6% on the remainder of 1 million acres. The
>positive aspect to the lower percentage is that they could easily
manage
>the capital requirements while the senior players pay for the bulk of
>exploration. They also managed to sell part of an interest in EL-391
to
>EOG Resources for $1/2 million cash and a further $1.5 million in
>exploration costs (still leaving PRD with 6.6%) - this may still be
the
>route IFR goes which would make it more attractive.
>
>While holding only 1.89% or 6.6% of a property seems like a waste of
time,
>it is definitely not when you're going after elephant size oil/gas
>deposits. The fact that 3 of North America's largest oil companies
are
>participating in this project leads me to believe the potential is
>enormous. If major discoveries were ever made here, the valuations
could
>run into the billions. Holding 6% of such a discovery when you only
have
>10 million shares outstanding can have a pretty dramatic impact on
your
>stock price.
>
>The most important point to remember with these type of plays - is
that
>they do not happen overnight. It has already take 2yrs to reach this
first
>phase of drilling and it may take another 2yrs to really find out what
>lies beneath these 1 million acres of virgin territory. Both juniors
(prd
>and ifr) will have "zero" discretion over when news is released. It is
not
>uncommon for oil/gas companies to withold information for strategic
>reasons and while news will eventually come out, it could take months.
>
>This is the type of speculation where you literally have to take a
minor
>position and forget about the stock for at least a year. The play
could be
>enormous and the upside potential equally so, but it will require
patience
>and the risk that you could lose the entire investment. Tuesday
Canaccord
>crossed out approx. 300,000 shares at $0.12 and $0.15. If a person is
>going to sit on this stock long term, it is best to try and position
as
>cheaply as possible. Drilling will not start until January on the
property
>that PRD has the smallest position in. As a result, it should still be
>possible to buy cheap stock for a while.
>
>A summary of the partners involved and developments since January 2000
is
>included below.
>_____________________________________________________________________________
>
>Consortium Partners Consist of the following
>
>1) EOG Resources ( EOGNYSE $36.39 - market cap of $4.2 Billion U.S.)
>
>2) Anadarko ( APCNYSE $51.43 - market cap of $12.8 Billion U.S.)
>
>3) Unocal (Northrock) Corporation ( UCLNYSE $33.85 - market cap of
$8.3
>Billion U.S.)
>
>4) International Frontier ( IFRCDNX $0.30 - market cap of $2 million)
>
>5) Pacific Rodera ( PRDCDNX $0.13 - market cap of $1.5 million)
>
>
>Information Compiled from Public Filings with Sedar
>____________________________________________
>
>Jan 2000 - (EL-391)
>
>drilling commenced on an exploration well targeting 100 million
barrels.
>Drill location was close to a Norman Wells pipeline capable of
handling
>25,000 bpod. Northrock (32.5%), Berkley/Anadarko (32.5%),
International
>Frontier (21.7%), and Pacific Rodera (13.2%)
>
>Feb 2000 - Rig Move (tight hole status)
>
>first well plugged and abandoned - rig moved to new target 12kms south
but
>results kept private as the consortium was bidding on other licenses.
>
>Feb 2000 - Financing Proposed (Mersch Involved)
>
>2.5 million unit private placement with warrant attached (0.25 yr 1 or
>0.33 yr 2). Participant in the placement is Frank Mersch through
Casurina
>Partnership
>
>March 2000 - Financing Closes
>
>1.97 million units closed on financing at $0.25 with attached warrants
>
>August 2000 - (Parcel 1)
>
>Consortium consisting of Unocal (32.5%), Berkley/Anadarko (32.5%), EOG
>Resources (17.5%), International Frontier (10.9%), and Pacific Rodera
>(6.6%) - is successful in acquiring an oil & gas parcel in the Central
>Mackenzie Valley of the NWT. The parcel consists of 134,684 hectares
and
>is close to their other parcels near Norman Wells. The consortium was
the
>successful bidder and will commit to spending $16.6 million in initial
>exploration on this parcel.
>
>August 2000 - (EL-391)
>
>Pacific Rodera sells 3.8% interest in (EL-391) project to EOG for
$496k.
>EOG can earn another 2.8% by funding on behalf of PRD a further $1.5
>million as part of the total cost of the consortiums work
>committment. Consortium would now consist of Northrock (32.5%),
>Berkley/Anadarko (32.5%), International Frontier (21.7%), EOG
Resources
>(6.6%) and Pacific Rodera (6.6%)
>
>August 2000 - Option on (EL-401)
>
>Consortium consisting of EOG (50%), Berkley/Anadarko (25%), Northrock
>(25%) was successfull in acquiring this parcel for a work program bid
of
>$12.8 million. EOG in return grants PRD the right to earn a 1.89%
interest
>in EL-401 by paying 2.8% of the work program cost. Land area covers
>326,000 acres.
>
>December 2000 - Options Granted
>
>Pacific Rodera issues 160,000 options at $0.12 (3yr expiration)
>
>December 2000 - financing proposed
>
>1 million shares sold at $0.18 with warrants attached ($0.18 yr 1 and
>$0.21 yr 2)
>
>April 2001 - options granted
>
>342,000 options granted at $0.15 (3yr) and 50,000 of the Dec/00
options at
>0.12 cancelled
>
>June 2001 - financing changed
>
>The December financing at $0.18 with a full warrant was changed to 1
>million at $0.28 with half warrants. A full warrant can be exchanged
at
>$0.30 yr 1 and $0.36 yr 2
>
>June 2001 - options granted
>
>385,000 options granted at $0.25 (3yr)
>
>
>June 2001 - financing increased
>
>The previously changed financing of 1 million at $0.28 with half
warrants,
>has now been increased to 1.5 million. A full warrant can be
exchanged at
>$0.30 yr 1 and $0.36 yr 2
>
>
>July 2001 - financing closed
>
>1.2 million special warrants at $0.28. The increased interest was
>obviously because of better oil/gas prices during the period.
>
>
>September 2001 - (EL-416)
>
>Consortium consisting of Northrock/Unocal (32.5%), Anadarko (32.5%),
EOG
>Resources (17.5%), International Frontier (10.9%), and Pacific Rodera
>(6.6%) - is successful in acquiring an oil & gas parcel in the Central
>Mackenzie Valley of the NWT. The parcel consists of 80,510. The
>consortium was the successful bidder and will commit to spending $1.5
>million in initial exploration on this parcel.
>
>Seismic shot in 2000/2001 has identified two large structures on the
>parcel. The consortium now holds 4 large exploration licenses and 9
>freehold parcels covering 1.1 million acres in the Central Mackenzie
>Valley area (NWT).
>
>
>December 2001 - options granted
>
>369,000 options granted at $0.10 (3yr) and 314,000 previous options at
>$0.48 cancelled.
>
>Rather rotten thing to do for existing shareholders but seems typical
of
>Cdnx companies and it also depends upon whether they are paying
themselves
>a wage or not.
>
>
>December 12/01 - drilling to commence on (EL-401) in January.
>
>EOG Resources Canada Inc., Pacific Rodera's joint venture operator,
has
>commenced construction on the access road in preparation for drilling
to
>commence on EL-401. Subject to completing an ice bridge across the
>Mackenzie River, drilling will commence in early January, 2002. The
joint
>venture partners are EOG Resources Canada Inc., a wholly owned
subsidiary
>of EOG Resources Inc., Northrock Resources, Anadarko Canada Energy
Ltd.,
>International Frontier Resources Corp. and PRD who would earn 1.89%
>interest by paying 2.8% of the estimated $8 million cost (approx. $1/4
>million).