Beaver Creek, a Trade Truce Extension and $100 Oil

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Sorry - it’s just going to be a short Saturday edition this week.

I’ve just finished the final day at the Beaver Creek precious metals summit.

A conference where gold and silver nuts from around the world converge to tell each other how good gold and silver are.

Last year at Beaver Creek silver was $42, gold was $3,600 and the mood was electric.

This year silver was higher at $66, gold was higher at $4,300, but the mood was more subdued.

Also meeting this week - US president Trump and Chinese President Xi had their long awaited catch up - and nothing much seemed to get announced except a short extension to the “USA-China trade war truce”.

105 days to go until the truce expires.

The US did announce a bunch of funding deals for critical minerals during the summit - and critical minerals stocks were the only shining light in the small end of the market this week.

Between now and the US midterm elections in November, I am betting some wacky stuff is going to happen on the geopolitics front...

Either way, volatility in the market and commodities has arrived - and will likely last until the US mid terms.

And if the Ukraine war is anything to go by...

(remember how that was meant to “last a few weeks” after it started back in 2022)

The Middle East situation doesn't look like getting sorted out any time soon.

Which means oil is in for a ride...

On Tuesday we launched our new Portfolio Addition: Bounty Oil & Gas.

It’s been a while since the ASX has had a proper “swing for the fence” oil exploration well to follow.

And with the oil price around $100 the window for oil exploration projects is currently open.

I really like BUY’s newly announced oil exploration transaction in offshore Liberia.

The market seemed to like it too...

And then about 120 seconds after trading commenced, a seller/s dumped a whole bunch of stock really quickly.

Which spooked the market.

The stock ended up lower than its last traded price BEFORE the Liberia transaction was announced.

(obviously we are still holding everything - see our hold conditions here)

Anyway, F U to whoever dumped all that stock in the first few minutes and spooked the market.

Lesson learned: a very good asset acquired into an existing ASX company (stale, angry shareholders waiting to dump?) plus a recent cap raise (sloppy/loose book?) can sometimes lead to selling like this.

(I liked the Liberia asset enough to accept these risks)

Hopefully the sellers are now done and the market starts properly valuing BUY’s new transaction... instead of reading into the selling.

Ultimately, we are Invested in BUY for the long term to hopefully see a well drilled on a multi-billion barrel target, with all the typical, value building activities and share price catalysts along the way.

BUY acquired an exclusive right to negotiate a “Production Sharing Contract’ on a deepwater offshore oil and gas exploration block in Liberia.

At last close of 1.2c BUY is capped at ~$16.4M and should have over $4M cash in the bank.

(Moving up to ~$42M when transaction milestones are achieved and vendor shares issued).

The vendors of this right expect that this negotiation and Liberia parliamentary approval should be concluded by January 2027 or shortly after.

Liberia is on the west coast of Africa, and the offshore geological profile happens to be almost identical to the eastern top of South America - in particular offshore Guyana.

Offshore Guyana is one of the world’s newest oil hotspots, delivering over ~13BN barrels of discoveries since 2015. (source)

Offshore Liberia and offshore Guyana are known as ‘tectonic conjugate margins’.

Liberia and Guyana were directly connected as part of the supercontinent Gondwana until they began rifting and pulling apart between 120 and 100 million years ago.

(source)(source)(source)(source)(source)

The energy supermajors who flooded to offshore Guyana and delivered multi-billion barrel discoveries have now started piling into offshore Liberia.

Here is what offshore Liberia looked like in 2024:

(source)

And here is what it looks like now:

(source)

The offshore exploration block BUY is negotiating on is next door to blocks held by two energy supermajors.

$279BN TotalEnergies on one side and $187BN Petrobras on the other.

Little BUY is wedged in between.

(source)

This is proper deepwater, swing-for-the-fences, high risk, (potentially) high reward frontier oil exploration exposure (my first and favourite - buckle up it will be a ride...)

In a frontier basin that has yet to be opened up.

And BUY will have the exclusive right to negotiate a Production Sharing Contract (PSC) on a block with a potential multi-billion barrel target.

We poked around on the website of the vendors of the asset to BUY, and found this giant 127 page technical report.

Before reading, be mindful this is not an independent report, so approach with caution.

The report outlines a thesis that the block BUY is negotiating on could be an extension of the structures on Total’s block next door.

(the geophysicists and AI agents among you will love reading this report - if you are an oil geophysicist read it... OR paste this link into your favourite AI chatbot and ask it what it thinks)

According to that report, the block BUY is negotiating on could contain ~4.5BN barrels of “OOIP” (Original Oil In Place), unrisked, based on the screening volumetrics.

(source)

Again some caution is needed here - it is the vendor’s exploration team quoting those massive numbers - so it's not independent and it wasn’t put together using any seismic data - so it will likely change once BUY does further work and releases an ASX compliant resource estimate.

The block BUY is securing is supposedly an extension of the targets inside $279BN TotalEnergies - which are estimated to contain ~7.3 billion barrels of oil equivalent. (source)

According to that technical report, BUY’s exploration targets are a mirroring the geology that was responsible for the ~13BN+ barrels of oil discovered in Guyana starting in 2015.

We are Invested in BUY for the long term to hopefully see a well drilled on a multi-billion barrel target, with all the typical, value building activities and share price catalysts along the way.

Let’s see what it does next week...

Have a great weekend.

Next Investors