Talisman Energy, a subsidiary of Spanish major Repsol SA, will test Pan Orient Energy Corp.'s (POE:TSX.V) East Jabung field in Sumatra. Pan Orient acquired the property in 2011.
PiercePoints in ValueWalk noted that Pan Orient Energy "used seismic surveys the last few years to uncover a massive reef and clastics drill targetwhich could be one of the biggest onshore discoveries of the decade. . .independent engineers appraised [the project] as having a best likely size of 149 million barrels equivalentabsolutely huge for an onshore project. "
Talisman "executed a farm-in deal with Pan Orient where it will pay 100% of the costs for an exploration well in order to earn a 51% interest in the project," commented PiercePoints. "That's a lot smaller interest than majors usually demand for a carried well. Leaving Pan Orient with a full 49% ownership in the projectequating to 73 million barrels equivalent upside in the best case forecast by reserves engineerswhile this junior sits back and watches Repsol pay to test the prospect."
In his What is Chen Buying? What is Chen Selling? newsletter, Chen Lin noted that "Talisman/Repsol owns the block just to south of it and knows the area and its geology well. The decision of drilling these two wells was made by Repsol one year ago when oil was at 30 dollars."
Lin also noted that he is surprised that Pan Orient has been "completely forgotten by the Bay Street this close to the major drilling. POE has a very strong balance sheet with CA$0.90+ cash per share and no debt." He believes if the well is successful, "we can see mad rush to chase the stock," and noted that Pan Orient does not need to raise any money, "so unlike most juniors, no financing is coming."
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1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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from Streetwise Reports - Exclusive Articles https://www.streetwisereports.com/pub/na/17337