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Monday, 14 January 2013
Calling All Dragons: Caza Oil & Gas and Tethys Petroleum to showcase their goods
Private investors are being handed the opportunity to become the next Kevin O'Leary, or Arlene Dickinson thanks to innovative Dragon’s Den-style events.
The Proactive Investors One2One forum promises to provide them direct access to the bosses of some of the nation’s most dynamic growth companies.
Indeed, the next One2One Investor Forum will be held at Metropolitan Hotel Vancouver - 645 Howe Street - Vancouver Room, on January 22. It promises to be an interesting affair, with two compelling investment opportunities on hand for attendees.
The two firms, Caza Oil & Gas (TSE:CAZ) and Tethys Petroleum (TSE:TPL), will make a 20 minute pitch followed by a 10 minute inquisition by a roomful of potential Dragons.
“Our inquisitors are every bit as tough as their television counterparts, but perhaps a little fairer,” says Proactive Investors managing director Craig Ribton.
The brainchild of Ribton and co-founder Ian McLelland, the One2One Forums offer just that chance.
Although the format is similar to the reality TV series (Proactive says it came up with the idea first), the aim is slightly different.
“We are about empowering investors, rather than demeaning the people in charge. I don’t think that approach works or has ever worked,” said Ribton.
“Our plan since our inception has been to introduce investors to some of the most exciting and dynamic growth investments out there.
“We also want to level the playing field for those investors by offering them the kind of access that only fund managers receive.”
In six years, Proactive has organized more than 300 events and introduced investors to some of the stock market’s best-performing stock market listed companies.
Once all the companies have presented, complimentary canapés and beverages are available for 90 minutes during a break-out session, where attendees can mingle with other guests, or ask more questions to the presenters.
Appearing at the Metropolitan Hotel in Vancouver from 1:30pm onwards will be Caza Oil & Gas and Tethys Petroleum (see mini-biogs below).
These two companies will also be presenting at the One2One Investor Forum in Calgary the following day, January 23, at the Hyatt Regency Calgary, 700 Centre Street SE, from 2:30pm onwards.
Their venture into Western Canada will also be followed by presentations in Toronto later this month. Caza Oil & Gas will be presenting on January 24 at the St. Andrew's Club - 150 King Street West, 27th Floor, from 5:30pm onwards.
Tethys Petroleum, meanwhile, will present in Toronto a week later, on January 31, at the Ivey ING Direct Leadership Centre - 130 King Street West, together with Sunridge Gold (CVE:SGC). These presentations will also begin at 5:30pm.
Caza Oil & Gas (LON:CAZA, TSE:CAZ) is targeting the Bone Springs play in New Mexico, which has the potential to be a company maker.
The company recently started initial production at its Forehand Ranch Bone Spring test well, with the well recovering hydrocarbons and frac fluids at a gross rate of around 1,631 barrels (bbls) over a 24-hour period at the end of December, producing 170 bbls of oil, 103 thousand cubic feet of natural gas.
This equates to 187 bbls of oil equivalent, and 1,444 bn bbls of frac fluid.
Caza has a 54.83% working interest before payout (42.02% net revenue interest) and a 63.00% working interest after payout (48.27% net revenue interest) in the Forehand Ranch 27 State Com No. 1H well, which is situated in Eddy County, New Mexico.
Late last year, the company secured almost US$22mln in new finance that provides it with the flexibility and firepower to exploit its Bone Springs play in New Mexico at its own pace.
Cenkos analyst Ashley Kelty reckons the results from upcoming wells in New Mexico will provide “catalysts for further share price revaluation”. Caza is particularly enthusiastic about the potential associated with the third Bone Spring Sand on the property.
The company also recently revealed that it acquired two new leases in the Bone Spring play at the December 2012 State of New Mexico Oil & Gas Lease Sale on two new prospects: West Rover and West Copperline.
Tethys Petroleum (LON:TPL TSE:TPL), meanwhile, is an oil and gas producer focused on Central Asia. Its deal to bring in major new partners into the massive Bokhtar project in Tajikistan was a transformational event in the story of the company’s development, according to City broker Seymour Pierce.
Last month, Tethys struck the deal with French major Total and state-backed Chinese firm CNPC (China National Petroleum Company). Now each of the new partners will own a 33% stake in the project – and Tethys’ 85% owned subsidiary KPL owning the other 33%.
The deal secures funding for an important phase of exploration that aims to further advance the project, which is currently estimated to host an eye-watering 27.5bln barrels of oil. As such it provides immediate validation of Tethys' considerable resource base in Tajikistan, Seymour Pierce analyst Sam Wahab said in a note.
Importantly, Tethys participation in the program is largely carried - with up to $80mln being spent on the Canadian firm's behalf. As such, it is only required to pay 33% of its share of the costs of the upcoming program and this is expected to amount to around $9mln.
Separately, Tethys continues to make progress in Kazakhstan, with exploration and development drilling targeting a 1.3bln barrel recoverable resource base.
Sunridge Gold Corp. (CVE:SGC) is a mineral resource company focused on the exploration and development of its 100% owned Asmara project in Eritrea.
Late last month, the Vancouver-based company said that talks are progressing with the Eritrean National Mining Corp (ENAMCO) for the African company to buy a 30 per cent participating interest in the gold explorer's Asmara project in the region.
The Canadian junior gold company said that negotiations are progressing within the framework of the mining code of the country. Once talks are concluded, ENAMCO will contribute 33 per cent of all development costs, as well as any other ongoing expenses on the project, including exploration.
"The key point here is that we are working under the Eritrean framework that was outlined, and that talks are progressing well," Sunridge's VP of corporate development, Greg Davis, told Proactive Investors in December.
"We have the blessing of the goverment," Davis says, adding that an agreement is expected within a few months.
The Asmara project consists of four mineral deposits - the Emba Derho, Debarwa and Adi Nefas copper-zinc-gold and silver deposits and the Gupo gold deposit - all located within 40 kilometres of the capital city of Asmara.
The results of a preliminary feasibility study in May that considered all deposits being processed at a central mill showed production of 365,000 tonnes of copper, 812,000 tonnes of zinc, 415,000 ounces of gold and 11 million ounces of silver over a 15.25 year mine life.
The report also estimated a pre-tax net present value of $555 million at a 10 per cent discount rate and an internal rate of return of 27 per cent, with an initial capital cost pegged at $489 million.
Sunridge is now working on finishing a feasibility study on the Asmara project, on track for April this year, after which an application for a mining license and permitting will follow, along with the social and environmental impact assessment.