"Madalena Energy Inc. acquired Gran Tierra Energy Inc.'s Argentina business unit, which was very accretive for shareholders, as it provides Madalena with a solid foundation and sizeable footprint in arguably one of the biggest shale plays in the world. Post-acquisition, the company has a large portfolio of opportunities across 14 concessions, with multiple horizontal development plays, an extensive exploration portfolio on high-impact conventional exploration assets and a multibillion-barrel asset base for unconventional shale and tight sand plays.
If we look at the acquisition based on fundamentals, Madalena got the asset at a huge discount. The company paid just $9.67 per boe for 2P reserves, or just $19K per flowing barrel of production, which is extremely cheap compared to transactions with similar production levels. With this acquisition Madalena triples its production, and could dramatically increase its cash flow in 2014 and 2015 respectively."
(7/29/14)
-
The Mining Report Interview with Etienne Moshevich
"My favorite North American phosphate project is Arianne Phosphate Inc. and its Lac à Paul project in Quebec. We like its management, and we've been impressed with how far it has moved this project along. This is a large, igneous project. There are two types of phosphate deposits: sedimentary and igneous. Igneous is rarer but results in higher phosphate content, up to 40% or more. Sedimentary deposits typically result in phosphate content in the 25–35% range. Higher content means higher purity and value. [Arianne announced July 16 a TraMan Inferred mineral resource estimate of 146 Mt at 5.3% P205.] It's good news, but the deposit was pretty big already. In other words, Arianne has firmed up its resources. North America has two or three existing phosphate rock mines expected to come to an end of their mine lives in the next 5–10 years. This gives confidence to potential phosphate fertilizer producers that they can source phosphate rock from a company like Arianne. The project probably will go into production by H2/18. The major hurdle is, once again, securing funding. With a capex of over $1B, the question is whether Arianne can raise this money by itself or whether it will seek a partner. . .Arianne will have rail access to a port. Quebec has always been helpful in this respect, so I don't expect infrastructure to be a problem. There are several potential partners. One is Agrium, whose Kapuskasing mine in Ontario closed earlier this year, forcing it to source its phosphate rock from Morocco. Mosaic would be another candidate, as some of its phosphate rock mines in Florida are expected to be shuttered in five years or so."
(7/29/14)
-
The Mining Report Interview with John Chu
"Madalena Energy Inc. acquired Gran Tierra Energy Inc.'s Argentina business unit, which was very accretive for shareholders, as it provides Madalena with a solid foundation and sizeable footprint in arguably one of the biggest shale plays in the world. Post-acquisition, the company has a large portfolio of opportunities across 14 concessions, with multiple horizontal development plays, an extensive exploration portfolio on high-impact conventional exploration assets and a multibillion-barrel asset base for unconventional shale and tight sand plays.
If we look at the acquisition based on fundamentals, Madalena got the asset at a huge discount. The company paid just $9.67 per boe for 2P reserves, or just $19K per flowing barrel of production, which is extremely cheap compared to transactions with similar production levels. With this acquisition Madalena triples its production, and could dramatically increase its cash flow in 2014 and 2015 respectively."
(7/29/14)
-
The Mining Report Interview with Etienne Moshevich
"My favorite North American phosphate project is Arianne Phosphate Inc. and its Lac à Paul project in Quebec. We like its management, and we've been impressed with how far it has moved this project along. This is a large, igneous project. There are two types of phosphate deposits: sedimentary and igneous. Igneous is rarer but results in higher phosphate content, up to 40% or more. Sedimentary deposits typically result in phosphate content in the 25–35% range. Higher content means higher purity and value. [Arianne announced July 16 a TraMan Inferred mineral resource estimate of 146 Mt at 5.3% P205.] It's good news, but the deposit was pretty big already. In other words, Arianne has firmed up its resources. North America has two or three existing phosphate rock mines expected to come to an end of their mine lives in the next 5–10 years. This gives confidence to potential phosphate fertilizer producers that they can source phosphate rock from a company like Arianne. The project probably will go into production by H2/18. The major hurdle is, once again, securing funding. With a capex of over $1B, the question is whether Arianne can raise this money by itself or whether it will seek a partner. . .Arianne will have rail access to a port. Quebec has always been helpful in this respect, so I don't expect infrastructure to be a problem. There are several potential partners. One is Agrium, whose Kapuskasing mine in Ontario closed earlier this year, forcing it to source its phosphate rock from Morocco. Mosaic would be another candidate, as some of its phosphate rock mines in Florida are expected to be shuttered in five years or so."
(7/29/14)
-
The Mining Report Interview with John Chu
"Madalena Energy Inc. acquired Gran Tierra Energy Inc.'s Argentina business unit, which was very accretive for shareholders, as it provides Madalena with a solid foundation and sizeable footprint in arguably one of the biggest shale plays in the world. Post-acquisition, the company has a large portfolio of opportunities across 14 concessions, with multiple horizontal development plays, an extensive exploration portfolio on high-impact conventional exploration assets and a multibillion-barrel asset base for unconventional shale and tight sand plays.
If we look at the acquisition based on fundamentals, Madalena got the asset at a huge discount. The company paid just $9.67 per boe for 2P reserves, or just $19K per flowing barrel of production, which is extremely cheap compared to transactions with similar production levels. With this acquisition Madalena triples its production, and could dramatically increase its cash flow in 2014 and 2015 respectively."
(7/29/14)
-
The Mining Report Interview with Etienne Moshevich
Pan Orient Energy (TSX-V:CAN)
Canadian junior oil and natural gas company based in Calgary, Alberta.
[news
][website
]
Quantum Energy (QEGY.PK:OTC)
Development stage publicly traded diversified holding company with an emphasis in oil field development trading
[news
][website
]
Super Nova Minerals Corp. (SNP:CNSX, OTC:SNOVF)
Oil & gas exploration company focused on developing the Millford Bakken property
[news
][website
]
The Phil Flynn Energy Report Wednesday July 30, 2014
Take That Comrade
The EU and the US are slapping sanctions on Russia and the trade is trying to calculate the hit on the global economy. The sanctions are supposed to target "key sectors" of Russia's economy like banking, defense and most importantly energy. While many feel the impact is priced in and that the sanctions might have been tougher the oil markets act like it will be a negative on economic growth. While the EU tried to avoid the gas industry as a target they still have to be concerned that Russia may try to cut off gas supply as we get closer to winter. The EU is still dependent on Russia for trade and about one-third of their energy supplies and Russia is dependent on the money it gets from the EU. The stakes have been raised but will it be enough to get Putin to fold? It probably won't be enough to change the Fed's game plan as they meet today.
The US is telling Russia to frack-off by denying Russia fracking technology and access to US deep water oil-production equipment for use in the Arctic and other deep waters the Russians want to explore. Oil companies BP PLC and Total that have major deals with Russia are getting prepared to take a hit. Russian oil production expansion really depends on Western technology so it seems that Russian oil production will not live up to its potential anytime soon. But Russia may not take US poultry! Take that President Obama!
Not to mention financing of other types of commodity transactions as well. The U.S. made that harder by placing sanctions on Russia's second-biggest lender VTB Group, as well as the Bank of Moscow and the Russian Agricultural Bank. The EU has also slapped Russian banks with sanctions but we are not sure which ones but that should make it difficult for state-owned Russian banks to raise capital for any type of deal.
Gas oil in Europe rose and the dollar made a record high against the ruble.
Nat gas rallied back on expiration and the possibility of a storm. The National Hurricane Center is reporting that showers and thunderstorms associated with an area of low pressure located about 1300 miles east of the southern Windward Islands remain limited. The circulation of the system is well organized, however, and the low could develop into a tropical depression later today or tomorrow while it moves generally west-northwestward near 15 mph.
Fed Day today! While we hope for surprises probably won't get any unless Janet Yellen gets chatty. Maybe the Fed will acknowledge the strong jobs number but with iffy housing data it will be hard to make the case that all is well. As far as the taper goes expect no change another taper of $10 billion, is on tap.
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