Wednesday, August 31, 2011

PetroAmerica (PTA, PTAXF) Hits Light Oil in Columbia

Just posted the previous Flash on site and news from Las Maracas-2 drilling shows up.

Looks like PTA management made some right moves, and could be on the way to being a small oil producer.

If this keeps up, then the small production could fund the further exploration and no more dilution.

Disclosure:  Long PetroAmerica

Marco G.


Petroamerica Discovers Light Oil with the Las Maracas-2 Sidetrack Exploratory Well, Los Ocarros Block, Colombia


Related Quotes

Press Release Source: Petroamerica Oil Corp. On Wednesday August 31, 2011, 12:42 pm EDT
CALGARY , Aug. 31, 2011 /CNW/ - Petroamerica Oil Corp. ("Petroamerica") (TSXV:PTA.V) is pleased to announce a light oil discovery with its Las Maracas-2 Sidetrack well ( the "well") on the Los Ocarros Block, in the Llanos Basin of onshore Colombia .
During initial testing, the well produced, under natural flow from a 6-foot perforated interval in the Mirador Formation, light oil (37 degree API) at rates up to 938 barrels of oil per day ("bopd") with bulk sediment and water of 1.3% through a fully open choke size of 2 inches. The well was flowed on clean-up for 24 hours and was shut-in at a fluid rate of approximately 860 bopd with a water-cut of 2%. The pressure build-up analysis shows significant skin damage. More extensive testing with an electro-submersible pump will be performed using a workover rig at a later date.  This will provide more information on the well deliverability, reservoir properties and accumulation size.  The well has been completed as a future producer.
The petrophysical evaluation of the logs obtained while drilling ("LWD"), indicate a net oil pay thickness in the Mirador Formation of between 30 to 40 feet depending on which cut-off parameters are used and an average porosity of 21%. In addition to the Mirador Formation, drilling to the deeper reservoir objectives of the Gacheta and Une reservoir formations was planned, however, due to operational difficulties resulting from the high deviation angle, the final total depth ended up in the Mirador Formation. Nonetheless, this well has significantly reduced the exploration risk of these deeper reservoir objectives, which will be drilled by a vertical well at some point in the future.
Petroamerica announced on July 4, 2011 , that it had entered into a farm-in agreement with Parex Resources Colombia Ltd. Sucursal ("Parex") to farm-out 50% of its working interest in the Los Ocarros block (the "Farmout") which was derived from a farmout with Talisman ( Colombia ) Oil & Gas Ltd. ("Talisman"), announced on January 4, 2011 . The Las Maracas-2 sidetrack well was drilled as an exclusive operation, with Parex paying the cost of drilling and logging the sidetrack up to a cap of US$7.0 million. The cost of casing, testing and completing the well will be shared equally. Under the terms of the Joint Operating Agreement, the non-consenting party has the right to back-in to the discovery and retain its 50% working interest by paying 1000% of its working interest share of the cost of the exclusive operation to drill and test the Las Maracas-2 sidetrack well. In the event that the non-consenting party decides not to back-in, Petroamerica will hold a 50% working interest in the Las Maracas discovery, and a 25% working interest in the rest of the block.
The transfer of Petroamerica's 50% working interest pursuant to the Talisman farmout remains subject to approval by the Colombian National Hydrocarbon Regulatory Authority (the "ANH"), and the subsequent transfer of 50% of such working interest (net 25%) as part of the above noted farm out, is subject to approval by the ANH.
Petroamerica is a junior oil and gas company operating in Colombia and its shares are listed on the TSX Venture Exchange under the symbol "PTA".
" Nelson Navarrete "
President and CEO

PetroAmerica (PTA, PTAXF) - Moving Up

...Aug 31, 3011 seems to be moving a bit upwards...
Goombarh Flash 30,  August 25, 2011
Bottom Fishing - Dragged up a Billion Share PetroAmerica (PTA, PTAXF)

Good Day,

Just too lazy to build the good case for investment by myself.  However, here in these write-ups in the Spring of this year, pumping the PetroAmerica stock, one gets a sense of the company:

Ahead of the Herd - Columbian Oil:

James West in the Midas Letter:

An article by exclusiveReports:

Short Article in Resource Investor

And a capsule summary of what's happening recently:
Petroamerica Oil Corp. (PTA-X0.140.0053.57%) has moved away from a year low of 12 cents on news it has received $2.8-million in oil revenue during the first six months of 2011 from its 15 per cent working interest in the Balay discovery of the LLanos Basin in Columbia. Since beginning long-term testing of the Balay discovery in July 2010, more than 420,000 barrels of oil with an average price of $105.91 a barrel and a per-barrel netback of $65.48. Two new test wells were started on long-term testing during the past week, producing a collective 6,561 barrels per day with negligible water under electro-submersible pump. The oil is being trucked by road although Petroamerica and its partners are now evaluating the logistics needed to transport those quantities of oil.

What are the key differences in PetroAmerica now and in the spring, well, there is the stock price for one, as in the chart following:

The stock price is now at the lowest point that it has ever been.

Another is that there was a management ruckus and changeover, where PTA undertook too much and too ambitious a program that their finances could not support, and they have divested out of some projects.

Also, a key alliance with Pacific Rubiales Energy with Pantin on the BOD may now be finished.

And the final factor is the severe dilution with financing in June, 2011 with 150 million shares now giving a 330 million share total and possibly 900 million fully diluted with all the warrants being exercise.

Is the situation that bad?  IMHO, no, the management is key, and they appear hard at work in creating value for the shareholders.  PetroAmerica still have relationships with Talisman Energy and Petrobras.  Their Balay wells are producing and they are expecting news from their Marracus drilling.

So, the Goombarh has taken a position in this bottom fish, with the anticipation of good news coming and the eventual rise in the fall with oil prices moving back higher.

Until next time,
Marco G.

Tuesday, August 30, 2011

Vast Explorations - VST, VSTFF - Under priced

Goombarh Flash 31,  August 29, 2011
Vast Explorations - VST,  VSTFF - Under priced

Good Morning,
Got this note from my friend Hardrock:

Hi friends,

Just posted on Vast forum.

Underpriced, based upon misunderstanding news release.
Just da way I see dat!

In case yas dinna understand ma previous post.
Niko is carrying Vast in this drilling.
Vast still owns 34.78% of this prospect.
The previous NR caused share price to tank.
This funny worded NR is hard to understand, but is supposed to clear the situation and allow the price to move back up.
Niko has already started drilling.
If you think, price is going down, stay away.  But da Rock thinks price is going to 50 cents soon.
Just da way I see dat!
CALGARY, ALBERTA--(Marketwire - August 29, 2011) - Vast Exploration Inc. ("Vast" or the "Company") (TSX VENTURE:VST -News) announces that it has entered into an Encumbrance for Financing Agreement ("Financing Agreement") with Nikoresources (Kurdistan) Ltd. ("Niko") in regard to the Qara Dagh Block in Kurdistan. Under the terms of the Financing Agreement Niko will provide financing of US$9,000,000 to be used by Vast to pay outstanding amounts to Niko under a joint operating agreement as well as to fund future expenses related to the deepening of the Qara Dagh well to 4,150 meters. Niko will, additionally, provide financing to Vast in regard to 34.78% of Vast's share of the cost of all operations going forward. "Niko has loaned Vast $9 million to use in funding the deepening of Qara Dagh."
In return, Vast will have the obligation, in the event that a commercial discovery is made and produced, to pay Niko an amount equal to the net proceeds of sale associated with an undivided 12% interest in the Qara Dagh Block. 
"Vast will pay Niko a dollar amount equal to 12% of block value."
Such financing arrangements have been put in place pending Kurdistan Regional Government approval of the sale by Vast to Niko of an undivided 12% interest in the Qara Dagh Block.
The Financing Agreement with Niko remains subject to receipt of approval, if necessary, of the TSX Venture Exchange.
Da Rock concludes that Vast still owns 37.5% share and just owes some money to Niko.
What is not said, is the date of valuation of monies owing.  However, the key is still owning 37.5% share of Qara Dagh Well!
Just da way I see dat!

Disclosure:  I am holding Vast Explorations already.

Marco G.

Tuesday, August 23, 2011

Junior Oil Plays - Aug 12, 2011

Goombarh 69 - August 12, 2011
Good day,

As is all the rage these days, people want to share their "musings", so I will ponder instead of muse.  Just not wanting to be part of the larger crowd, it is the contrarian in me.
Firstly, and most important, are the markets going crazy or what; will the markets resume moving?  Yes, the markets are forever evolving, and yes, the markets will move upwards.  Look at Cisco, which was beaten down and an also ran, reported yesterday and moved upwards over 10%.  Look at Europe, which banned short selling, so the markets responded by moving higher, over 5% each.  Just a few sporadic examples, but the world is not ending no matter what happens; people just pick themselves up and move forwards.  Attached is the latest missive from Ken Fisher, he does not know that I am advertising for him; but his outlook is for a plodding along year, with stock picking rated as important (since when is stock picking not important?  I suppose only when the tide rises, then everything moves.).

The main fundamental themes driving the markets should still work.  And what are these themes?  IMHO they are:
1.      Emerging market growth of middle class; especially in Asia.  This is just huge, ten-fold increases expected in about 20 years.  Analysts call this a secular move.
2.      Shift of economy from making stuff to making and sharing knowledge.  This makes measurement of economic numbers difficult and employment numbers are bad; because some segments of populations are being left behind.  Witness the battle for #1 business giant between Exxon and Apple; oily stuff versus knowledge gadget.
3.      Rises in costs for metals, precious metals, commodities, oil, food stuffs.  Peak Oil theory here applies to Gold and mining, and all other avenues of human endeavour including farming etc.  This is just basic economic theory, supply and demand; when supplies get stretched, further marginal production becomes more costly.  For example:  prime farmland is used already, to increase production, farmers use less suitable land on hillside, which does not grow as well and more difficult to irrigate etc., the production work is more for less output on the hillsides.  This applies to everything from oil to sugar, coffee to REE, Gold to corn.
I think that is enough for big thematic items; in thinking about things, it is no use to get too complicated, simple is easier and quicker to act upon.

Therefore, my action plan, which I have already hinted and noted previously, is that I am moving my investments to where there may be more of a tidal effect, namely undiscovered oil plays.  Three plays that I have looked at include the Alberta Bakken, the Nordegg Shale in Western Alberta SW of Edmonton and the Duvernay Shales underlying most of the present Alberta oil zones.  The driver is the coming of age of horizontal drilling and fracing for oil and gas.  The rage is now to go after not the existing reservoir areas, but the original source rocks where the oil is held tight.  Therefore they need to be horizontally drilled and fractured to release their goodies.  For the Nordegg, I have bought Anglo-Canadian Oil (AGC, AGDNF) and Donnybrook Energy (DEI, CSTPF) for the Duvernay.

Until next time,
Marco G.

PS: since this email, I have exited Donnybrook Energy.

Sunday, August 21, 2011

Bottom for Summer 2011 is In!

Goombarh 70 - August 21, 2011
Good Sunday,

Further to my last note of #69, I've thought to add some words to the encouragement of getting readers back into the market.  Yes, fear is all around, as depicted by the news media and specifically by some of the analytical postings on Seeking Alpha such as the following:

These writers are knowledgeable and well meaning, but the Goombarh thinks they are over analyzing, and they do not give a course of action.

Speaking of action, there are yearly doldrums as depicted across the indices following in the comparison chart, the Venture is the key index that I follow, where the juniors that I invest in are traded, but the S&P 500, the Wiltshire and the TSX are shown as well.  Note the green highlighted box showing the summer lows and the swift fall gains.  I believe, that this year 2011, the same picture will play out, as I believe the summer bottom is in with the prevalent pessimism out there.
A truism for the best gains is the lowest entry price possible for your stock position.  Therefore, the action for investors should be careful placement of your investment positions in stocks that have made their lows for this summer.  The gains are coming in September to December. 

As I have completely revamped my own portfolio and am now positioned for the possible fall rising, I thought it would be remiss of me to not mention that to you people, so therefore, now I have mentioned it.  Good luck.

Until next time,
Marco G.

Wednesday, August 17, 2011

New Shale Prospect - Shoal Point Energy - SHP on CNQ Exchange

Goombarh Flash 29,  August 17, 2011
New Shale Prospect - Shoal Point Energy - SHP on CNQ Exchange

Good Day,

Found another compelling prospect.  Shoal Point seems to be drilling and testing on old oil property with very thick shale and siltstone layers, over 100's of meters thick, due to folding from geologic action.  The shales also appear to have large and minute fractures. 

The Goombarh interprets from his reasearch, that Shoal have found oil for sure.  The only variable is whether they can economically recover it.  The basin that they are in is large, in the billions of barrels contained, and they have lots of ground in area.  Now with the shales being so thick and interspersed with siltstone, and being possibly fractured already, this is a very compelling situation.  The oil may flow freely. They already seem to say that the oil flow is in the range of 100's of barrels per day without further fracking.

Link to their corporate presentation:
Link to their well testing news:

This is not an easy stock to buy, as the CNQ is unquoted and very illiquid.  I am in process of accumulating a position.  Share price is around .20 Cdn.

Until next time,
Marco G.


International Frontier Resources has moved up 50%  from last Flash and holding tough.

Primary Petroleum is moving today up 25%

Anglo Canadian Oil moved up on news a few days ago.

Donnybrook Energy is moving slowly on low volume.

In Summary, there is a starting recognition of Shale oil plays in North America.  This is early days for some of these plays.  Check Seeking Alpha and search on Shale oil and read the many authors writing about shale oil.  Good Luck to you all.

Thursday, August 11, 2011

Alberta Bakken Players

Alberta Bakken Players

Found this Bank of Montreal Research Report date April 6, 2011, from browsing in my portfolio companies websites, and felt this deserved sharing.

Here's a list of rationale on why investing here makes sense:

Click on the hyperlink below to access the whole report:

Remember, early investors may get the best gains.

Marco G.

Tuesday, August 9, 2011

Rosetta Alberta Bakken Wells Aug 2011

From this presentation, the Goombarh inferrs that Rosetta is proceeding on developing this Alberta Bakken field.  This means other players involved in this area should move higher, as they hold valuable property.

Monday, August 8, 2011

Alberta Bakken Results are Confidential But Promising

Alberta Bakken Results are Confidential But Promising
Thanks to bobsmith1 's posting on
Extract from the recent Aug 6 news article:
Grinnell Day Chief, the Blackfeet Tribe's director of oil and gas.
The tribe, he said, hopes the exploration will lead to recoverable oil. Production would lead to even more local jobs in the oil industry, and the possibility of millions of dollars in royalties.
Results from the exploration are confidential — but promising, he said.
"The success of some of these wells is going to be good," Day Chief said. "We will eventually have some production here."

Rosetta hits Bakken Oil

Rosetta hits Bakken Oil

Rosetta's Aug 8 financials caught my eye in mentions of the Alberta Bakken drilling.

Expanded Southern Alberta Basin horizontal drilling program — Rosetta initiated a three-well horizontal drilling program during the second quarter of 2011 that will continue to test the commerciality of the play. The first horizontal well was spud in the second quarter and drilling operations are now underway on the second and third wells. Rosetta plans to expand the horizontal program to include an additional four wells to be drilled by year end.
. . .
During the first half of 2011, Rosetta completed eight vertical delineation wells on its approximately 300,000 net-acre position in northwest Montana. In total, eleven delineation wells have now been tested. All have encountered oil from multiple reservoirs that produced varying quantities of oil and gas. The vertical delineation wells span a wide area and test results have varied. Based on this variability, some areas of the play will have a higher chance of commerciality than others. While not all vertical testing is complete, production from testing only the Bakken reservoir resulted in an average seven-day rate from all well tests of 22 BOPD and associated gas from these single stage vertical completions.  

So in summary, Rosetta is adding 4 new wells by end of 2011 in the Alberta Bakken.  Note that they hit oil in all their drilling, and gave an average of 22 BOPD for the whole lot.  The Goombarh's interpretation is that Rosetta is being careful and conservative in their choice of words, as these are delineation wells in their own words, and also as test of Bakken reservoir, and single stage,  these are not meant for production, but merely to find areas that they will go horizontal and fracture to complete.  I am inferring that the variability that they refer to is in how thick the Bakken is at the well and also in terms of the depth and the pressure encountered.  Note the rumours of a high pressure sweet spot.
To my understanding, the Bakken is not a good reservoir, as the oil is tight, in other words, the shale has to be broken to allow the oil to slowly leak out from the heat and pressure.  The Bakken is not a reservoir at all, but is a source rock for oil, for which it is among the best in the world, with their Total Organic Content (TOC) of up to 60% by weight.  Contrast this with other source rocks that are good for oil with a 5 to 10% TOC.  The main driver here is that the Bakken oil here has not been released and have not migrated elsewhere, but they are contained in the source rock, the Alberta Basin Bakken. 
The thought, is that this is very good news, Bakken is hit everywhere, with the pressure being much higher in certain sections of this play.

Friday, August 5, 2011

Alberta Bakken - Much Potential

Alberta Bakken - Much Potential

Found a March 2011 report on the region and the players in that area.  The report is good background, considering it is now 5 months later.  Still, very useful, and I would recommend that investors in the area, should carefully digest the contents.

Extract from this report:

Technical factors in favour of the play:

1. source rock;
2. extensive hydrocarbon saturation;
3. in the oil window;
4. overpressure;
5. fracture enhancement;
6. reservoir;
7. formation penetrations;
8. log, core, cutting, and drill stem test analyses;
9. historical production precedents;
10. recent perforation and test sample;
11. recent production data; and
12. regionalization.

Industry factors that support the play:
1. land acquisition activity;
2. multiple parties;
3. multiple drilling licenses; and
4. Bakken-experienced operators.

Here is the link to the Scotia report on the Alberta Bakken:
This report only serves to support my own conviction on the potential in this area.  I have purchased more shares of juniors in the area.

PS:  Found another recent Alberta Bakken presentation at June Petro-Geo Conference, available here: