Thursday, April 05, 2007

Petromin Resources AGM April 3, 2007

The PTR AGM was held at the law offices of Maitland & Company. (Looks like they switched law firms from last year). There was an overflow crowd of at least 20 people in the boardroom.

After the short formalities, Peter Ho was given the task of updating the Canadian operations and also on the future course of the company. He’s a very smart guy. He’s got the vision, the knowledge and the contacts. Coming from the Alberta Research Council, a non-profit entity, he has done a lot of work with CO2 sequestration that 8-9 years ago fell upon deaf ears in Alberta.

The Canadian operations have been the bread & butter plays – Frog Lake producing 300 barrels/day, Redwater 100b/d - but it’s getting more expensive to drill wells in Canada. They likely will have another well in Frog Lake. It’s your basic conventional oil & gas story. Some substance but no sizzle.

The sizzle or blue sky, will come from the enviro-energy (a term coined by Peter Ho) area. For instance, in Kuwait, there’s about 40 producing wells generating about 500,000 b/d – they’re elephants. There’s 20 Billion barrels that they cannot recover. However, if they use CO2 injection, it can add another 7-8% recovery, which equates to a very big number. So, there would be room for a technical service agreement here and a chance to make ‘damn good money’.

In China, there’s an abundance of coal but every year, miners are getting killed in the thousands. The government is trying to get rid of the CBM. Lots of pollution, hence, lots of opportunities here. Just wait for the Climate Change Statement from the Chinese Government later this month. They have to do something about it but they don’t have the expertise. This technology transfer gap can be supplied by companies like PTR, which appears to have a first mover advantage in this enviro-energy space.

In Indonesia, little PTR lost out in their bid for a project there to a much larger entity. The fact they made it into the final two speaks volumes. They beat out a lot of bigger companies including PetroChina.

PTR now has a presence in Mexico and Algeria due to their alliance with GTSSI, whose area of expertise is carbon capturing and monitoring, leaving the carbon storage part to PTR. (Check out recent news release).

A lot of things are dovetailing into PTR’s strategy. They are riding the sweet spot of a large wave. Kyoto 2008, Climate Change statement from China, both Harper & Bush developing a CO2 strategy, mainly because the electorate demands it. The environment, esp. after Gore’s An Inconvenient Truth movie, will be a major issue in any future elections.

What Petromin has is a unique vision and they appear to have done a lot of homework. I asked whether PTR will be a player if there‘s an exchange for emission credits in the post-Kyoto world, ie selling emission credits to the heavy polluters. Looks like they will be. They will likely receive emission credits for storing the CO2. Kenny Chan and Peter Ho have already gone to seminars dealing with carbon trading. I believe they said that the administration of it is being handled by the UN.

Prepare for lots of news releases in 2007.

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