Introducing the CVI - Punch Card Portfolio Newsletter
I write a weekly investment newsletter. This newsletter involves the development of a focused portfolio of undervalued securities. The subscription price is $10 per month (cancel any time). Every investment idea I recommend will be one I purchase for my own portfolio. If you have questions prior to subscribing shoot me an e-mail (Swizzledxxx@gmail.com)
Please note I'm running a low-tech operation and that the newsletter is sent by me via e-mail. There will be a delay between when you pay and when you receive your first e-mail (usually a couple of hours).
This 2009 article shows that THAI has made very little hard progress in the last 12 months. Without solid numbers from Kerrobert by year end, Mr Market will continue to have good reason to allocate zero value to the heavy oil division of Petrobank. This is now a "show me and prove it" story.
ReplyDeleteTony
Thanks for the comment.
ReplyDeleteGood reason to allocate zero value to the THAI technology, not to allocate zero value to the HBU reserves. Those reserves can be recovered using SAGD if THAI doesn't work.
I think that is the key thing to understand.
HBU HIGHLIGHTS
- HBU SAGD 2P reserves on our Whitesands leases, which includes lands encompassing our Conklin pilot project and May River commercial project, increased by 1.5% to 70.0 million barrels with net present value, before tax, discounted at 8% of $482 million.
- HBU 3P reserves plus high estimate contingent recoverable bitumen resources totalled 817.7 million barrels with net present value, before tax, discounted at 8% of $4.3 billion.
- McDaniel has completed the Transition Report, concluding that the THAITM process is field proven. The Transition Report assigns a best estimate THAITM exploitable bitumen-in-place of 1.8 billion barrels on our Whitesands leases, exceeding the SAGD exploitable bitumen-in-place by 17% or 259 million barrels.
- First oil sales from Kerrobert began on January 23, 2010.
Tony,
ReplyDeleteA little more on this. See attached link which contains an interview with Passport Capital. They explain how Whitesands (HBU) has significant value as a traditional oil sands development.
http://www.gurufocus.com/news.php?id=108064
That's fair - I had discounted the bitumen assets themselves, through concentrating on the struggles of the THAI process technical development. I remain long with a big position (by my standards).
ReplyDeleteRegards, Tony.
"That's fair - I had discounted the bitumen assets themselves, through concentrating on the struggles of the THAI process technical development."
ReplyDeleteI think that is the key here. I mentioned Petrobank to a couple of hedge fund managers that I speak to. They both referred to THAI as being a science project. But my answer was who cares ? The heavy oil division is worth $30 without THAI. THAI makes this a homerun if it pans out. It is still worth 2x the current market price even without THAI.
Thanks for the comments.