Monday, March 13, 2006

PTR AGM - Mar 10/06

PTR AGM – Mar 10/06

Stepping into the board room at Lang Michener, I shake hands with Dr Ross Gorrell, president and Mr Robert Curr, geologist. There are a couple of insiders and a couple shareholders there – about 10 people. Dr Gorrell mentions that Mr. Kenny Chan is in Indonesia and Mr. J. Chan is in China working on deals and will not be able to make it to the AGM.

Formal AGM starts and is over within minutes.

Updates on PTR’s bread and butter but prosaic plays –

Redwater - 4 successful oil wells producing, the 5th one next week. 3 more new locations t/b drilled. However, their JV partner Signal Energy appears t/b in play, on the verge of being taken over by a private company. One thing that has happened over the last couple of years is that the operator continues to be taken over. Last year it was GRR, then Signal bought them out, now a private company is kicking the tires. Apparently, they are valuing a barrel of production between $50-75K/barrel of production. RW is producing about 100 b/d.

By this valuation, if RW is producing 100 b/d valued at $50K/barrel of production, then RW alone should be valued at $5M/37M shares o/s = 13.5 cents. Caveat – this is my take, I might be missing an important factor here.

Morningside - 1st royalty chq next couple weeks. G2 Resources bringing in rig this week to drill Basal Belly River. 1 producing well, 1 t/b drilled & 1 to follow up on.

Gilby – operator is Highpine Resources , something about payout Oct 2/05 or Dec 05.
Took them 8 months to get drilling cost back. Additional zones. End result - cost to PTR $0.00, but get 16 2/3 working interest.

Calmar – farm out – marginal gas well, but potential in the glaconite zone.
Bottom line – Cash flow built in, will get better.

Frog Lake – LSD7. heavy oil. 3 wells plus 4th one in the next year. 130 b/d.

There is a comment from a shareholder re exit 2006 barrels/day figures. Mgmt mentions that they should have a clearer idea of the figures in about a month or so.

These are the bread and butter plays, the elephant plays have to do with China and Indonesia. That’s where Mr. Peter Ho gets involved. Has good credentials. (see NR). Although there are lots of CBM plays in China, play likely to be in North America. It’s the technology transfers that’ll be important as China is still employing ancient practices in extracting minerals.

Remember CNOOC/Unocal fiasco and the controversy that erupted – headline generating, lost of face – things anathema to the Chinese mindset. Is there another way to accomplish the sourcing of energy/technology without headlines? Is the LLC far enough removed from the parent (so that any embarrassment will not be reflected upwards)? Apparently, this LLC has the money to spend. (Think federal government spending spree at fiscal ear end.)

The MOU is to be clarified within 60 days. There’ll be presentations to a China group here or in Calgary. Apparently, PTR was feted to a state dinner in China (= higher ranking officials). Reciprocation? Bottom line: Chinese co with money to spend to be matched with some NA plays by an under the radar middleman.

Gold mine written off to $1, but can always restart. Property in Indonesia is surrounded by Barrick, Inco, Newmont. Perhaps, it gets revived and if so, gets spun off. The big money investors are probably there.

These guys are ambitious dealmakers. They’ve done quite a bit of homework, made their contacts and they’ll be swinging for the fences.

My opinion: bread and butter PTR should be more than 31 cents (230 b/d * $50K/bop divided by 37M shares). Elephant PTR doubles that to 62 cents at least.

No comments: