Next Investors logo grey

MPE commences drilling Tulainyo Gas Discovery

Published 22-NOV-2017 14:23 P.M.


2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

ASX gas explorer, Magnum Gas & Power Limited (ASX:MPE), today announced that it has commenced drilling at its Tulainyo 2-7 gas appraisal well in northern California’s Sacramento Basin.

The Ensign Rig 587 is now onsite. In the past 24 hours, the rig equipment has been tested and pre-spud safety procedures have been carried out. The well is planned to a total, measured depth of approximately 1,700 metres (5,600 feet), and drilling operations are expected to take less than one month to complete.

The Tulainyo Gas Discovery structure is a well-defined large anticline, with up to 91 square kilometres closure. It has a strong surface expression, gas seeps, and gas has been encountered here during historic drilling.

MPE’s 60% owned subsidiary, Gas Fields LLC, is earning up to 33.33% (20% net) in the Tulainyo Gas Project via a joint venture with the project operator, California Resources Production Corporation (NYSE:CRC), a subsidiary of a NYSE-listed company, which is California’s largest natural gas producer.

In 2015, CRC produced 44 million cubic feet of natural gas (or 7,000 barrels of oil equivalent per day) in the Sacramento Basin, which could supply all the homes in the City of Sacramento for nearly two years.

MPE’s other partner is Cirque Resources LP, a private company based in Denver, Colorado, led by two-time Wildcatter of the Year, Peter Dea.

Based on current prices, this project has a potential in ground value of US$6 billion, of which MPE has the ability to earn $1.2 billion.

It should be noted though that MPE is a highly speculative stock, high risk stock and investors should definitely seek professional financial advice if considering this stock for their portfolio.

California only produces a sixth of its annual gas demand, and is expected to import 98% of its natural gas requirements by 2025. Given this, if MPE manages to strike large, commercial gas quantities at its appraisal well in the coming weeks, it could stand to emerge as a significant disruptor in terms of these uneven supply-demand dynamics.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.