JonnyRBuck12
1 week ago
I found this article on two different Romanian websites, which leads me to believe that it is current and accurate. Whoever put up that 1.5 million share bid likely saw this article last week.
https://www.profit.ro/povesti-cu-profit/energie/cea-mai-mare-companie-petroliera-din-serbia-controlata-de-gigantul-rus-de-stat-gazprom-pregateste-startul-productiei-comerciale-de-titei-si-gaze-naturale-in-romania-21547237
https://www.ziuadevest.ro/nis-companie-petroliera-din-serbia-controlata-de-gazprom-pregateste-startul-productiei-comerciale-de-titei-si-gaze-naturale-la-periam-si-biled/
Translated:
The largest oil company in Serbia, controlled by the Russian state giant Gazprom, is preparing the start of commercial production of crude oil and natural gas in Romania
NIS Petrol SRL, the Romanian division of the largest oil company in Serbia, Naftna Industrija Srbije (NIS), controlled by the Russian state giant Gazprom, with over 56% of the capital, is preparing the start of commercial production of crude oil and natural gas from the Teremia Nord field , located on the Ex-7 Periam and Ex-8 Biled perimeters in Timi? County, where NIS Petrol is the majority concessionaire and operator, with 85% stakes, according to data analyzed by Profit.ro.
The company is close to starting the construction of a technological station for the collection, separation and delivery of hydrocarbons extracted from the Teremia Nord deposit, in the commune of Dudestii Vechi in Timi?.
There are currently 2 wells drilled on the site and another 8 are to be dug, according to the project documentation. Within the station, the production of the wells will be collected, the liquid will be separated from the gas, the extracted quantities will be measured, and the crude oil will be stored and later loaded into car tanks. NIS Petrol has a contract with the Romanian state company Conpet, the operator of the national oil pipeline transport system, based on which crude oil is unloaded from tanks and reloaded into wagons at Conpet's Biled ramp, to be transported by rail to the Serbian refineries of NIS at Pancevo and Novi Sad.
The Romanian subsidiary of the Serbian company owned by Gazprom estimates a daily production at the Dude?tii Vechi site of 100 tons of crude oil and 165,000 cubic meters of natural gas , of which 60,000 cubic meters – gas associated with crude oil. Part of the extracted gas quantities will be used in the production of electricity on site, and the rest will be fed into the national transmission system operated by Transgaz. For this, NIS Petrol will build a pipeline that will connect with the Nadlac-Arad gas pipeline . The first positive results of the explorations carried out in the Teremia Nord deposit were obtained in 2017, as Profit.ro reported exclusively at that time. Experimental production started in 2019.
According to the latest data from the National Agency for Mineral Resources (ANRM), NIS Petrol is the majority concessionaire and operator of 4 Romanian hydrocarbon perimeters, all located in the west of the country: Ex-7 Periam, Ex-8 Biled and Ex-3 Baile Felix (in partnership with Canadians from East West Petroleum), as well as DEE V-20 Jimbolia (along with Armax Gaz). The concessions were granted in 2010 . 2 other oil agreements to which NIS Petrol is a party, those related to concessions Ex-2 Tria (in which East West Petroleum is also a partner) and Ex-12 Crai Nou (with operator Moesia Oil nad Gas), appear as inactive at ANRM. In the case of Ex-2 Tria, the agreement expired last year and was not extended, and NIS Petrol paid ANRM the value of the mandatory exploration works provided for in the agreement and left unexecuted , according to an official document analyzed by Profit.ro.
In the fall of 2022, several searches were carried out at the offices of NIS Petrol in Timi?oara, in a DIICOT file with suspicions of illegal transmission of information on local hydrocarbon deposits . NIS responded publicly saying that the company's basic principle is strict compliance with applicable legal regulations . Since then, the Romanian judicial authorities have not communicated any information on this topic. Over the years, NIS Petrol has faced problems in the prospecting stages of the Romanian concessioned hydrocarbon perimeters, the works suffering delays due to the refusal of the owners to allow access to the lands. The reasons were their fear that the operator would pursue the exploitation of shale gas through the hydraulic fracturing method , NIS Petrol repeatedly denying that it had this intention , or the desire to protect its business, in the case of farmers .
NIS Petrol SRL, which also owns in Romania a chain of gas stations operated under the Gazprom brand , as well as a 7.5 MW gas-fired power plant in Jimbolia , ended 2022, the last reported year, with losses of over 116 million lei, to total revenues of almost 712 million lei, according to the latest data from the Ministry of Finance. Since the start of activity in Romania, in 2012, and until 2022 inclusive, the company has reported losses every year, in the cumulative figure of over half a billion lei. The Serbian parent company NIS, listed on the Belgrade Stock Exchange, finished last year with a net profit of around 60 million euros, on total revenues of over 870 million euros. Its main shareholders are Gazpromneft, the oil division of Gazprom (50%), Gazprom as such (6.15%) and the Serbian state (almost 30%).
JonnyRBuck12
2 months ago
East West Petroleum Comments on Financial Results for the Nine Months Ended December 31, 2023
Vancouver, British Columbia--(Newsfile Corp. - February 23, 2024) - East West Petroleum Corp. (TSXV: EW) ("East West" or the "Company") is pleased to comment on its financial results for the nine months ended December 31, 2023.
During the nine months ended December 31, 2023, the Company generated revenue of $2,056,017 with direct costs of $1,842,854 resulting in a gross profit of $213,163 and after corporate expenses and other items the net loss for the period was $158,932. On October 31, 2023, the Company entered into an interim agreement (the "Interim Agreement") with Cheal Petroleum Limited ("Cheal"), the owner of a 70% interest in PMP 60291 and operator, whereby Cheal would purchase the Company's 30% interest in PMP 60291. The key terms of the Interim Agreement were as follows:
i. Purchase price of US $1,000,000.
ii. Effective date of sale is July 31, 2023.
iii. Purchaser assumes all reclamation obligations.
iv. Contingent consideration of US $350,000 should an additional well be drilled and completed.
v. Refundable deposit of US $250,000 (the "Deposit") on signing definitive agreement.
The terms described under the Interim Agreement were subject to the negotiation and execution of a definitive agreement. Closing of the sale (the "Closing") is subject to receipt of all necessary New Zealand Government approvals ("Ministerial Consent"), regulatory and TSXV approval as well as approval of the Company's shareholders. An annual and special meeting of the shareholders of the Company was held on December 15, 2023 and shareholder approval was obtained. As at December 31, 2023, the Company received conditional approval from the TSXV. On January 10, 2024, the Company and Cheal finalized and signed the definitive agreement (the "Asset Sale and Purchase Agreement") which formalized the terms under the Interim Agreement. The deposit due to the Company on signing was received.
Closing is expected to occur upon receipt of Ministerial Consent. In the event the Ministerial Consent is not received by May 31, 2024, the Company may terminate the Asset Sale and Purchase Agreement and if terminated, the Company will be required to return the Deposit. At December 31, 2023 the New Zealand property was, in accordance with IFRS, reclassified as assets held for sale.
In regard to the Company's Romanian assets, the Company and NIS remain in discussions in order to determine the path forward for the properties. All options remain under consideration including a monetization event. The Company is unable to comment on timelines to establish a path forward.
The Company has been reviewing a number of opportunities in both oil and gas and also other resource opportunities. The Company is focussed on closing the sale of its New Zealand assets and once the sale has closed, the Company will be in a better position to pursue other opportunities more aggressively.
At December 31, 2023, the Company had a strong cash position of $5,691,792 being just over $0.06 per share. With the effective date of the sale of the New Zealand assets being July 31, 2023, the Company anticipates it will receive total cash proceeds from this sale of approximately US$600,000. In addition, the Company will, if contingent conditions are met, receive additional consideration of US$350,000. On closing a significant gain on sale will be realized due to the purchaser assuming all reclamation obligations.
On Behalf of the Board "Nick DeMare" Nick DeMare, Director & Interim CEO 604-685-9316
JonnyRBuck12
1 year ago
Just a little refresher for current shareholders and new investors regarding Romania:
https://www.eastwestpetroleum.ca/projects/romania/
The original deal struck between East West Petroleum and NIS in 2011 was that NIS would earn 85% interest in this 1,007,500-acre project by completing the first phase of work, having an estimated budget of $62,335,000 USD and proving production capabilities on the first part of the package.
This has been achieved and facilities + test production is going on as we speak at the moment, as per the most recent NIS financial report:
https://ir.nis.rs/fileadmin/template/nis/pdf/Reporting/BusinessReports/English/QR_Q3_2022_eng.pdf
(see pages 5, 6, 24, 34) – All dialogue regarding Teremia is based on the land parcel with East West
Recently, East West made a deal with NIS to sell it’s remaining 15% stake in exchange for $500,000 USD and a 2.1% Royalty on production from anywhere on the 1,007,500-acre project, without any time or value cap. This makes sense because NIS is a multi billion-dollar company from Serbia and East West cannot keep up investing in such a large project. However, NIS can easily pay EW several million dollars a year from a royalty standpoint, in order to fully control and produce from this lease. Keeping in mind this is just the first phase of the project and there are many other drill targets to search for Oil/Gas.
What stops this deal from completing at the moment are sanctions from the Russia/Ukraine war. Gazprom owns a 56% stake in NIS, which doesn’t allow for the deal to be completed. In the meantime, Serbia has looked at either selling Gazproms stake in the company, or nationalizing NIS. This is because sanctions will begin for Serbia soon, based on association with Gazprom, and NIS is the largest company in country. Either solution would allow for the deal to be completed.
In the end, this royalty has tremendous value because it allows East West to generate cash flow from the lease, without any production cost risk. Payments will vary somewhat from quarter to quarter, but it would continue for quite some time.
JonnyRBuck12
1 year ago
East West Petroleum Corp Q2 2022. All information is available on Sedar.
Symbols: EW (Canada) – EWPMF (USA) – 37A (Frankfurt)
Prices (November 24, 2022): $0.075CAD - $0.055USD - €0.039EUR
Shares Outstanding: 89,585,665
Options: 400,000 @ $0.10 | 1,890,000 @ $0.06
Warrants: Nil
Allowable Capital Losses: $8,440,000
Non-Capital Losses Available For Future Periods: $28,550,000
Canada: $17,329,000 from 2026-2042 & New Zealand: $11,221,000 (No Expiry Date)
**See Audited Results For More Details**
Financials
ASSETS
Cash: $5,116,085
GST Receivable: $6,602
Amounts Receivable: $294,319
Oil Inventory: $110,014
Prepaid Expenses: $36,082
Property, Plant & Equipment: $230,009
Total Assets: $5,793,111
LIABILITIES
Accounts Payable: $289,284
Decommissioning Liabilities: $997,138
Total Liabilities: $1,286,422
Six Month Performance
Revenue: $1,670,890
Comprehensive Income: $317,820
(Only recent updates. Prior quarterly information is available on Sedar)
Romania
Without a joint declaration of a commercial discovery it is the Company’s position that commercial development of the field cannot proceed, NIS did not share this opinion. Rather than litigating this issue the discussions continued with NIS in an attempt to find a way forward. Given the consequences of a commercial discovery decision and significant funding obligations the Company and NIS continued negotiations on all available options including a monetization event. Negotiations were progressing well and a non-binding letter of intent was finalized. The parties were moving towards final documentation with essential terms of a monetization event agreed, being a cash payment of US $500,000 and a royalty interest of 2.1%, as defined. The outbreak of war between Ukraine and Russia brought all attempts to implement the agreed terms to a halt, with the issue being that NIS is owned, in part, by a Russian entity which is subject to Canadian government sanctions. The Company and NIS are working on the final documentation to implement the agreed terms once closing is possible.
JonnyRBuck12
2 years ago
East West Petroleum Corp Q1 2022 Results. All Information Is Available On Sedar.
Symbols: EW (Canada) – EWPMF (USA) – 37A (Frankfurt)
Prices (August 29, 2022): $0.10CAD - $0.075USD - €0.06EUR
Shares Outstanding: 89,585,665
Options: 2.79 Million (Between $0.06 and $0.135)
Warrants: Nil
Allowable Capital Losses: $8,440,000
Non-Capital Losses Available For Future Periods: $28,550,000
Canada: $17,329,000 from 2026-2042 & New Zealand: $11,221,000 No Expiry Date
**See Audited Results For More Details**
Financials
ASSETS
Cash: $5,044,036
GST Receivable: $5,129
Amounts Receivable: $592,173
Oil Inventory: $145,663
Prepaid Expenses: $25,260
Property, Plant & Equipment: $269,156
Total Assets: $6,081,417
LIABILITIES
Accounts Payables: $540,255
Decommissioning Liabilities: $1,102,282
Total Liabilities: $1,642,537
Q1 2022 Performance
Revenue: $1,016,787
Net Income: $250,011
Q1 2022 MD&A Highlights
New Zealand
The Company has operations in the Taranaki Basin of New Zealand. All licenses were previously operated by the Company’s original partner, TAG Oil Ltd. (“TAG”), and all wells are targeted shallow Miocene targets in the Urenui and Mt. Messenger formations which have been shown to be productive for oil and gas throughout the Basin, including the Cheal field. The Company holds a 30% working interest in the Petroleum Exploration Permit (“PEP”) 54877 and the Petroleum Mining Permit PMP 60291 (“Cheal East”) and TAG held the remaining 70%. In September 2019 TAG completed the sale of substantially all of its Taranaki Basin assets and operations which included their interest in PEP 54877 and PMP 60291 to Tamarind Resources Pte. Ltd. (“Tamarind”). In light of TAG’s decision to sell the majority of its interest in the Taranaki Basin assets the Company assessed its options with respect to its 30% interest in Cheal East and, on June 24, 2019, the Company signed a heads of agreement pursuant to which the Company had agreed to sell its 30% interest in PEP 54877 and PMP 60291. On August 1, 2020 the Company terminated the Definitive Agreement. The Company continues to assess its go-forward plans, which includes the possible sale of its New Zealand concessions to other buyers.
During fiscal 2022 Cheal conducted a detailed prospectivity review of PEP 54877 and advised the Company that the forecasted economic prospects of PEP 54877 does not meet Cheal’s internal risk criteria. Although no final decision has been made to relinquish the permit in December 2022, the Company determined to record an impairment of $1,627,056 for costs incurred to March 31, 2022.
During Q1/2023 the Company produced 18.1 Mbbl oil and 15.7 Mmcf gas compared to 18.3 Mbbl oil and 11.6 Mmcf gas during Q4/2022. The Cheal-E5 was offline for all of Q4/2022 and Q1/2023. The Cheal-E5 went down due to a downhole related issue which appears to be parted rods. A full workover of the Cheal-E5 well was completed during Q1/2023 and the Cheal-E5 came back on line on June 30, 2022. Approximately 385 bbls of kill fluid needed to be recovered after the workover and oil production started again on July 7, 2022. The Cheal-E6 went offline during Q3/2022 due to downhole related issues which appears to be a wax plug. The operator carried out rod work and installed a new pump while the well was off line. The Cheal-E6 started back on-line near the end of Q4/2022 and was fully producing for all of Q1/2023.
Romania
During fiscal 2010 the Company was informed by the government of Romania that it had been awarded four exploration blocks located in the Pannonian Basin, in western Romania. In May 2011 the Company signed petroleum concession agreements with the National Agency for Minerals and Hydrocarbons (“NAMR”) the government agency in Romania which regulates the oil and gas industry. The four concessions have specific mandatory work programs (the “Romania Work Programs”), which were estimated at US $63,000,000 for all four programs. Production from the concessions is also subject to royalties of between 3.5% to 13.5% based on quarterly gross production payable to the government.
Without a joint declaration of a commercial discovery it is the Company’s position that commercial development of the field cannot proceed, NIS did not share this opinion. Rather than litigating this issue the discussions continued with NIS in an attempt to find a way forward. Given the consequences of a commercial discovery decision and significant funding obligations the Company and NIS continued negotiations on all available options including a monetization event. Negotiations were progressing well and the parties were moving towards final documentation with essential terms of a monetization event agreed, being some limited cash and a royalty interest. The outbreak of war between Ukraine and Russian brought all attempts to implement the agreed terms to a halt, with the issue being that NIS is owned, in part, by a Russian entity which is subject to sanctions. The Company is considering what steps could be implemented to allow the transaction to proceed.
Total sales revenues increased from $290,042 in Q1/2022 to $1,016,787 in Q1/2023. The increase is attributable to a an increase in total sales volumes due to significantly higher production during Q1/2023 compared to Q1/2022. During Q1/2022 the Cheal-E1 well, which is the Company’s biggest producing well, and the Cheal-E2 well were offline due to blockages.
Commitments
The Company’s share of expected exploration and development permit obligations and/or commitments as at June 30, 2022 are approximately $620,000 to be incurred during fiscal 2023. The Company may choose to alter the program, request extensions, reject development costs, relinquish certain permits or farm-out its interest in permits where practical.
Outstanding Share Data
The Company’s authorized share capital is unlimited common shares with no par value. As at August 29, 2022 there were 89,585,665 outstanding common shares and 2,790,000 share options outstanding with exercise prices ranging from $0.06 to $0.135 per share.
JonnyRBuck12
2 years ago
East West Petroleum Audited Annual Results (Ending March 31, 2022)
All information is available at www.sedar.com
Symbols: EW (Canada) – EWPMF (USA) – 37A (Frankfurt)
Prices: $0.105 CAD - $0.848 USD - €0.058
Shares Outstanding: 89,585,665
Options: 2.79 Million (Between $0.06 and $0.135)
Warrants: Nil
Financials (In Canadian Dollars)
ASSETS
Cash: $5,145,788 - $0.0574c per share
GST Receivable: $3,649
Amounts Receivable: $38,870
Oil Inventory: $265,867
Prepaid Expenses: $39,292
Property, Plant & Equipment: $236,425
Total Assets: $5,729,891
LIABILITIES
Accounts Payable: $355,037
Decommissioning Liabilities: $1,185,985
Total Liabilities: $1,541,022
Allowable Capital Losses: $8,440,000
Non-Capital Losses Available For Future Periods: $28,550,000
- Canada: $17,329,000 from 2026-2042 & New Zealand: $11,221,000 No Expiry Date
Updated Information From Management Discussion
*Important Notes*
- Cash increased $269,284 between Q3 2021 and Q4 2021
- Q1 2022 financial results will be released end of August 2022
- Impairment charge of $1,627,056 in 2021 on leases that were not going to be worked on
- NIS/EW Deal in place for a cash/royalty deal on their Romania asset
New Zealand
During fiscal 2022 Cheal conducted a detailed prospectivity review of PEP 54877 and advised the Company that the forecasted economic prospects of PEP 54877 does not meet Cheal’s internal risk criteria. Although no final decision has been made to relinquish the permit in December 2022, the Company has determined to record an impairment of $1,627,056 for costs incurred to March 31, 2022.
PMP 60291 is the location of the Cheal E-Site and the Cheal E-site production facility as well as the Cheal-E wells. A waterflood program is ongoing however the efficacy of the program and its impact on production is an ongoing item of debate. The Company’s technical advisors have stated that there is no unequivocal evidence that water injection through the Cheal-E7 well has had a significant impact on production from PNP 60291 but that there is evidence to the contrary. The Company’s advisors attribute the production performance to other factors than injection through the Cheal-E7 well. The determination whether the waterflood utilizing Cheal-E7 as the injector well is creating the positive response in production impacts the Company’s obligation to fund its 30% share of the costs of acquiring the Cheal-E7 well, being 30% of NZ $3,200,000. No funding has been advanced, and no funding will be advanced until the issue is resolved.
The Company produces its oil and gas production from five wells on the Cheal-E site. On October 24, 2020 the ChealE1 pump stopped functioning due to downhole blockage and, as a result, production ceased from the Cheal-E1 well. As the major producing well, the stoppage of the Cheal-E1 well had a major impact on the Company’s share of production. In mid-January the Operator managed to pull the rods out of the Cheal-E1 well with a crane, cleaned the well and replaced the pump. However, only limited production resumed in mid-January 2021 without annular flow. In addition, in early March 2021 the Cheal-E2 well stopped working and several attempts to restart the well over the following three weeks were unsuccessful. Workovers of the Cheal-E1 well and the Cheal-E2 well were not completed until early August 2021 including the clearing of downhole wax and sand issues. The workovers were successful in re-establishing production in both wells. A trial of a two-stage downhole pump in Cheal-E1 proved to be too vulnerable to sand production issues and was replaced with a single stage downhole pump as previously employed. This is working reliably and an increase in flow was successfully implemented in Q3/2022.
As a result of the continued Cheal-E1 stoppage and the addition of the stoppage of the Cheal-E2 well, oil and gas production was significantly less from October 2020 to early August 2021. Only three wells, the Cheal-E5, E6 and E8 were fully producing for Q1/2022. During Q2/2022 all five wells the Cheal-E1, E2, E5, E6 and E8 were producing.
During Q4/2022 the Company produced 18.3 Mbbl oil and 11.6 Mmcf gas. compared to 19.5 Mbbl oil and 15.1 Mmcf gas during Q3/2022. The decreases were a result of both the Cheal E-5 and Cheal E-6 wells going offline for the last month of Q3. The Cheal E-5 went down due to a downhole related issue which appears to be parted rods. Workover planning is currently underway with a full workover being scheduled for the end of Q2/2023. The Cheal E-6 went offline due to downhole related issues which appears to be a wax plug. The operator carried out rod work and installed a new pump while the well was off line. The Cheal E-6 started back on-line near the end of March 2022.
Romania
The four concessions have specific mandatory work programs (the “Romania Work Programs”), which were estimated at US $63,000,000 for all four programs. Production from the concessions is also subject to royalties of between 3.5% to 13.5% based on quarterly gross production payable to the government
As operator, NIS has reported resumption of exploration and production activities in the EX-2, EX-3, EX-7 and EX-8 exploration blocks in Romania. EWP has a 15% carried interest during the commitment work programs in all four blocks which includes for the drilling of a total of twelve exploration wells (three per block). It should be noted that all activities are dependent on securing the necessary government and local approvals.
Blocks EX-2 and EX-3
Interpretation of seismic data has continued although no commercially viable exploration prospects have been identified to date. NIS has proposed to request an extension of the exploration periods beyond the contractual maximum of ten years while the prospectivity of the blocks is under review. No commitment wells have been drilled to date in either block.
Block EX-7
Two phases of testing have been performed on exploration well BVS-1000. Despite fracture stimulation in the second testing phase, oil production from the well has rapidly declined to currently around 30 bopd. NIS consider the well has invalidated the pre-drill subsurface geological model and re-interpretation of the prospect is underway prior to a decision to either suspend or abandon the well. Deviated appraisal well, Teremia-1001, drilled on the Teremia North Field, has been completed as a production well after a period of experimental production testing. All work program commitments in the block have been met.
Block EX-8
Testing of exploration well Pesac-1000 has been completed although with negative results. Deviated appraisal well Teremia-1002, drilled on the Teremia North Field, has been completed as a production well after a period of experimental production testing. Exploration well, Teremia-1201, was drilled to test a possible extension to the Teremia North Field but failed to encounter hydrocarbons. It was subsequently sidetracked into the Teremia North Field in 4Q/2021 and has now been completed as a production well and renamed Teremia-1004.
There have been several meetings of both the technical and operating committees to discuss work program results and determine whether the Teremia North field is a commercial discovery. At the operating committee meeting held
February 8, 2021 NIS voted that there was a commercial discovery at Teremia North whereas the Company voted that there was not a commercial discovery. The field economics were, in the Company’s assessment, marginal and did not merit the significant capital contributions required. NIS, being a vertically integrated oil and gas producer, could support the development costs given the internal economies available.
Without a joint declaration of a commercial discovery it is the Company’s position that commercial development of the field cannot proceed, NIS did not share this opinion. Rather than litigating this issue the discussions continued with NIS in an attempt to find a way forward. Given the consequences of a commercial discovery decision and significant funding obligations the Company and NIS continued negotiations on all available options including a monetization event. Negotiations were progressing well and the parties were moving towards final documentation with essential terms of a monetization event agreed, being some limited cash and a royalty interest.
The outbreak of war between Ukraine and Russian brought all attempts to implement the agreed terms to a halt, with the issue being that NIS is owned, in part, by a Russian entity which is subject to sanctions. The Company is considering what steps could be implemented to allow the transaction to proceed.
Total sales revenues decreased by 39%, from $644,832 in Q3/2022 to $396,309 in Q4/2022 primarily due to a 54% decrease in sales volume, from 6,681 BOE in Q3/2022 compared to 3,067 BOE in Q4/2022. The decrease in sales volume is primarily due to the Cheal E-5 well being shut-in for repairs during Q4/2022.
Total sales revenues increased by $37,091 from $359,218 in Q4/2021 to $396,309 in Q4/2022. The increase is primarily attributed to the increase in the average realized price per BOE from $71.96 in Q4/2021 to $129.22 in Q4/2022.
The Company’s share of expected exploration and development permit obligations and/or commitments as at March 31, 2022 are approximately $660,000 to be incurred during fiscal 2023 and $16,000 over the next five years. The Company may choose to alter the program, request extensions, reject development costs, relinquish certain permits or farm-out its interest in permits where practical.
JonnyRBuck12
4 years ago
East West Petroleum Corp. (TSXV: EW) ("East West" or the "Company") is pleased to provide this corporate update.
OPERATIONAL UPDATES
Romania
The Company's joint venture partner and operator, Naftna Industrija Srbije ("NIS"), has provided the following operational update for Romania.
Due to the Covid-19 pandemic the state of emergency and a nationwide lockdown was imposed by the Romanian government on March 25, 2020. Consequently, the operator NIS, has temporarily ceased new exploration field activity until such time that the lockdown is lifted and social distancing requirements can be safely relaxed. It is expected that this will substantially delay the planned 2020 exploration programs in the EX-2, EX-3, EX-7 and EX-8 exploration blocks in Romania. As usual, it should be noted that all activities are dependent on securing the necessary government and local approvals.
Block EX-2; an acquisition program of 170 Km2 of 3D seismic was completed in 4Q 2019. Processing is expected to be completed in May 2020. Exploration drilling is anticipated to commence in 2021.
Block EX-3; interpretation of the 223 km2 of 3D seismic acquired in 2018 has been completed. This work has identified several exploration prospects with drilling expected to commence in 2021.
Block EX-7; testing of the BVS-1000 exploration well, which was drilled and completed to 3,800 m in 1Q 2019, has been postponed until 2021.
On the Teremia North discovery, the initial discovery well, Teremia-1000 has experienced mechanical problems resulting in an inflow of formation water. A workover is planned for 2021. An appraisal well, Teremia-1001, was drilled and completed in 1Q 2019 and, following initial testing, was placed on long term experimental production in July 2019. Production rates have stabilised around 150 bopd.
Block EX-8; A second appraisal well, Teremia-1002, was drilled into the extension of the Teremia North discovery in Block EX-8. The well was completed and tested in 4Q 2019 and has subsequently been placed on long term experimental production with rates stabilising around 150 bopd.
Following the drilling of the Pesac Sud-1000 exploration well in 3Q 2019, two separate intervals were tested in 4Q 2019. Both tests failed to indicate the presence of hydrocarbons. Future testing of potentially prospective shallower zones is being considered for 2021.
NIS Petrol is committed to fulfilling the commitment work programs in all blocks, considering certain legislative changes and being granted appropriate extensions due to the current Covid-19 situation.
NIS will be funding 100% of the costs and fully carrying East West through the commitment work programs in each of the blocks in return for earning an 85% interest in each licence.
New Zealand
The Company's news release of February 3rd 2020 reported that the local regulatory issues of Cheal Petroleum, the owner of a 70% interest in the permits and the operator, had been resolved such that the Company could proceed to close the transaction for the sale of its 30% interest. The Company had agreed with an arm's length local New Zealand purchaser to sell, with an effective date of April 1st 2019 its interest in Petroleum Exploration Permit 54877 and Petroleum Mining Permit 60291 for sale proceeds of US$1,900,000 in cash. Net revenue, as defined, since April 1st 2019 is being credited to the purchase price such that as at March 31st 2020 the Company has received approximately US $ .95 million of the sale proceeds. The Company had anticipated that as of this date it would have closed the sale but as result of the COVID-19 pandemic and subsequent shut down of various government offices in New Zealand, which must approve the transfer of the properties, it is uncertain when closing can occur. At this time it is not known when all government approvals to the sale will be in place and therefore a closing date cannot be determined other than pursuant to the agreement with the purchaser closing must occur, subject to possible extensions, by June 24th 2020.
From an operational perspective with the recent collapse in price of oil the economics of continuing operations at Cheal is under review. The operator has reported that they have initiated preliminary plans to investigate the real possibility of closing in production at Cheal.
About East West Petroleum Corp.
East West Petroleum Corp. (www.eastwestpetroleum.ca) is a TSX Venture Exchange listed company established in 2010 to invest in international oil & gas opportunities. The Company has its primary focus on two key areas: New Zealand, where it has established production and cash flow and Romania where it is carried to production on an exploration program. In Romania the Company has exploration rights in four exploration concessions covering 1,000,000 acres in the prolific Pannonian Basin of western Romania with Naftna Industrija Srbije ("NIS"). The Company does not own the acres but has exploration rights.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-looking Statements: Certain statements in this press release are "forward-looking statements" which reflect the Company's current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. In some cases, these forward-looking statements can be identified by words or phrases such as "may", "might", "will", "expect", "anticipate", "estimate", "intend", "plan", "indicate", "seek", "believe", "estimates", "predicts" or "likely", or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including without limitation, those risks and uncertainties discussed elsewhere in the Company's filings on SEDAR. Investors should not place undue reliance on forward-looking information. The forward-looking information contained herein is made as of the date hereof and is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
Nick Demare
ndemare@chasemgt.com
Tel: (604) 685-9316
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/54767
© 2020 Canjex Publishing Ltd. All rights reserved.
JonnyRBuck12
4 years ago
East West Petroleum Corp. (TSXV: EW) ("East West" or the "Company") is pleased to provide this corporate update.
OPERATIONAL UPDATES
Romania
The Company's joint venture partner and operator, Naftna Industrija Srbije ("NIS"), has provided the following operational update for Romania.
Due to the Covid-19 pandemic the state of emergency and a nationwide lockdown was imposed by the Romanian government on March 25, 2020. Consequently, the operator NIS, has temporarily ceased new exploration field activity until such time that the lockdown is lifted and social distancing requirements can be safely relaxed. It is expected that this will substantially delay the planned 2020 exploration programs in the EX-2, EX-3, EX-7 and EX-8 exploration blocks in Romania. As usual, it should be noted that all activities are dependent on securing the necessary government and local approvals.
Block EX-2; an acquisition program of 170 Km2 of 3D seismic was completed in 4Q 2019. Processing is expected to be completed in May 2020. Exploration drilling is anticipated to commence in 2021.
Block EX-3; interpretation of the 223 km2 of 3D seismic acquired in 2018 has been completed. This work has identified several exploration prospects with drilling expected to commence in 2021.
Block EX-7; testing of the BVS-1000 exploration well, which was drilled and completed to 3,800 m in 1Q 2019, has been postponed until 2021.
On the Teremia North discovery, the initial discovery well, Teremia-1000 has experienced mechanical problems resulting in an inflow of formation water. A workover is planned for 2021. An appraisal well, Teremia-1001, was drilled and completed in 1Q 2019 and, following initial testing, was placed on long term experimental production in July 2019. Production rates have stabilised around 150 bopd.
Block EX-8; A second appraisal well, Teremia-1002, was drilled into the extension of the Teremia North discovery in Block EX-8. The well was completed and tested in 4Q 2019 and has subsequently been placed on long term experimental production with rates stabilising around 150 bopd.
Following the drilling of the Pesac Sud-1000 exploration well in 3Q 2019, two separate intervals were tested in 4Q 2019. Both tests failed to indicate the presence of hydrocarbons. Future testing of potentially prospective shallower zones is being considered for 2021.
NIS Petrol is committed to fulfilling the commitment work programs in all blocks, considering certain legislative changes and being granted appropriate extensions due to the current Covid-19 situation.
NIS will be funding 100% of the costs and fully carrying East West through the commitment work programs in each of the blocks in return for earning an 85% interest in each licence.
New Zealand
The Company's news release of February 3rd 2020 reported that the local regulatory issues of Cheal Petroleum, the owner of a 70% interest in the permits and the operator, had been resolved such that the Company could proceed to close the transaction for the sale of its 30% interest. The Company had agreed with an arm's length local New Zealand purchaser to sell, with an effective date of April 1st 2019 its interest in Petroleum Exploration Permit 54877 and Petroleum Mining Permit 60291 for sale proceeds of US$1,900,000 in cash. Net revenue, as defined, since April 1st 2019 is being credited to the purchase price such that as at March 31st 2020 the Company has received approximately US $ .95 million of the sale proceeds. The Company had anticipated that as of this date it would have closed the sale but as result of the COVID-19 pandemic and subsequent shut down of various government offices in New Zealand, which must approve the transfer of the properties, it is uncertain when closing can occur. At this time it is not known when all government approvals to the sale will be in place and therefore a closing date cannot be determined other than pursuant to the agreement with the purchaser closing must occur, subject to possible extensions, by June 24th 2020.
From an operational perspective with the recent collapse in price of oil the economics of continuing operations at Cheal is under review. The operator has reported that they have initiated preliminary plans to investigate the real possibility of closing in production at Cheal.
About East West Petroleum Corp.
East West Petroleum Corp. (www.eastwestpetroleum.ca) is a TSX Venture Exchange listed company established in 2010 to invest in international oil & gas opportunities. The Company has its primary focus on two key areas: New Zealand, where it has established production and cash flow and Romania where it is carried to production on an exploration program. In Romania the Company has exploration rights in four exploration concessions covering 1,000,000 acres in the prolific Pannonian Basin of western Romania with Naftna Industrija Srbije ("NIS"). The Company does not own the acres but has exploration rights.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-looking Statements: Certain statements in this press release are "forward-looking statements" which reflect the Company's current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. In some cases, these forward-looking statements can be identified by words or phrases such as "may", "might", "will", "expect", "anticipate", "estimate", "intend", "plan", "indicate", "seek", "believe", "estimates", "predicts" or "likely", or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including without limitation, those risks and uncertainties discussed elsewhere in the Company's filings on SEDAR. Investors should not place undue reliance on forward-looking information. The forward-looking information contained herein is made as of the date hereof and is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
Nick Demare
ndemare@chasemgt.com
Tel: (604) 685-9316
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/54767
© 2020 Canjex Publishing Ltd. All rights reserved.
JonnyRBuck12
4 years ago
East West Petroleum Report. Recent Financials (Available On Sedar)
Price: $0.035
Common Shares: 89,585,665
Financials (As of December 31, 2019)
ASSETS
Cash: $4,149,150 - $0.0463 cents per share
Receivables: $276,039
Prepaid Expenses: $14,780
Investments: $692,229 (Made up of AAL & SEW.H Shares)
Assets Held For Sale: $1,786,828 – New Zealand Asset Sale (Still proceeding as per Feb 2020 news)
Total Assets: $6,919,026
LIABILITIES
Accounts Payable: $296,150
Decommissioning Liability: $319,101 – removed once NZ sale completed
Liabilities On Asset Held For Sale: $995,431 – removed once NZ sale completed
Deposit: $65,505
Total Liabilities: $1,676,187
No value on assets in Romania as clearly shown above. Keep in mind that (Property, Equipment & Exploration Assets) were written off mid-2019 and can always be added back once those assets are producing. The true value of East West Petroleum is far higher than what the current stock trades at.
JonnyRBuck12
4 years ago
2020-02-03 07:08 MT - News Release
Mr. Nick Demare reports
EAST WEST PROVIDES FURTHER UPDATE ON SALE OF 30% INTEREST IN CHEAL PERMITS
East West Petroleum Corp. has provided this update on the sale of its interest in petroleum exploration permit 54877 and petroleum mining permit 60291, which are subject to joint venture between a wholly owned subsidiary of the company and Cheal Petroleum Ltd., to an arm's-length private New Zealand company, on the terms previously announced in a news release of the company dated June 24, 2019.
At this time there are no contractual issues that are an impediment to closing the transaction, and the company and the purchaser had previously anticipated closing at or about this time.
In a news release dated Nov. 27, 2019, the company announced that because of the change in ownership of Cheal Petroleum as the operator of the joint venture and owner of 70-per-cent interest in the Cheal permits, certain government authorities in New Zealand had issued a notice regarding the financial capacity of the operator that impacted tenure to the Cheal permits. If the concerns are not satisfied, then tenure to the Cheal permits could be revoked. A revocation would impact both the company's 30-per-cent interest and Cheal Petroleum's 70-per-cent interest. The government has communicated no specific issues with the company or the proposed purchaser of the company's 30-per-cent interest in the joint venture. Cheal Petroleum has prepared and submitted a response and fully expects that all issues will be satisfactorily resolved.
Until local regulatory issues are addressed closing of the transaction cannot occur. At this time, it is not known when such concerns will be resolved, or whether they will be resolved, and further it is not known whether the delay could impact the company's agreement with the purchaser in respect of the transaction. As additional information is available, the company will provide further updates.
About East West Petroleum Corp.
East West Petroleum is a TSX Venture Exchange-listed company established in 2010 to invest in international oil and gas opportunities. The company has its primary focus on two key areas: New Zealand, where it has established production and cash flow, and Romania where it is carried to production on an exploration program. In Romania the company has exploration rights in four exploration concessions covering one million acres in the prolific Pannonian Basin of western Romania with Naftna Industrija Srbije (NIS). The company does not own the acres but has exploration rights.
We seek Safe Harbor.
© 2020 Canjex Publishing Ltd. All rights reserved.
JonnyRBuck12
4 years ago
East West to test Bvs-1000 well in Q1 2020
2019-11-27 06:52 MT - News Release
An anonymous director reports
EAST WEST PETROLEUM ANNOUNCES OPERATIONAL UPDATES
East West Petroleum Corp. has provided an update on operations.
Romania
The company's joint venture partner and operator, Naftna Industrija Srbije (NIS), has provided the following information.
The operator, NIS, is actively progressing with comprehensive exploration programs in the EX2, EX3, EX7 and EX8 exploration blocks. It should be noted that all activities are dependent on securing the necessary government and local approvals.
Block EX-2 -- the 3-D seismic acquisition program of 170 square kilometres was completed in Q3 2019 and processing is under way. The phase 1 exploration period was extended for another two years and now ends in December, 2021.
Block EX-3 -- processing of the 223 square km of 3-D seismic data acquired in 2018 has been finished and interpretation is under way. Results are expected by end 2019. The phase 1 exploration period was also extended for another two years and now ends in December, 2021.
Block EX-7 -- an exploration well, Bvs-1000, was drilled in 1Q2019 to a total depth of 3,800 m and encountered several potential hydrocarbon bearing zones as identified on logs. Testing is now expected to commence in Q1 2020.
A deviated appraisal well on the Teremia North discovery, Ter-1001, was drilled in Q1 2019 and encountered several potential hydrocarbon-bearing zones. A long-term test was conducted from April to July, 2019, which established a stabilized oil flow rate of approximately 150 barrels of oil per day. Extended well testing is continuing.
Block EX-8 -- A second deviated appraisal well on the Teremia North field, Ter-1002, was spudded in September, 2019, and has been drilled to a measured depth of more than 2,600 m. Extended testing is planned.
An exploration well, Pes-1000, was drilled and completed in Q3 2019 to a total depth of around 2,500 m. Several potential hydrocarbon bearing zones were encountered and testing is planned to commence before the end of 2019.
NIS will be financing 100 per cent of the costs and fully carrying East West Petroleum through the commitment work programs in each of the blocks in return for earning an 85-per-cent interest in each licence.
New Zealand
As previously announced the company has an agreement for sale of its 30-per-cent interest in its New Zealand permits and has been working with the purchaser to deal with the closing process. Recently there was a change in ownership of the operator and 70-per-cent owner which has resulted in a letter from government authorities regarding the financial capacity of the operator which impacts tenure to the permits. The operator must address the comments by early February, 2020, and as a result closing of the company's sale cannot occur until this issue is dealt with. As more information is obtained the company will provide an update.
About East West Petroleum Corp.
East West Petroleum is a TSX Venture Exchange listed company established in 2010 to invest in international oil and gas opportunities. The company has its primary focus on two key areas: New Zealand, where it has established production and cash flow, and Romania, where it is carried to production on an exploration program. In Romania the company has exploration rights in four exploration concessions covering one million acres in the prolific Pannonian basin of western Romania with Naftna Industrija Srbije (NIS). The company does not own the acres but has exploration rights.
We seek Safe Harbor.
© 2020 Canjex Publishing Ltd. All rights reserved.
JonnyRBuck12
4 years ago
EW.V - East West Petroleum Corp (Due Diligence Report)
Symbol: EW.V (Canada) & EWPMF(USA)
Current Price: $0.055CAD & $0.04USD
Shares Outstanding: 89,585,665
Most Recent Financials (Ending September 30th, 2019) In CAD
ASSETS
Cash: $3,719,020
GST Receivable: $7,923
Amounts Receivable: $223,772
Prepaid Expenses: $22,654
Investments: $554,709
Assets Held For Sale: $2,067,867
Total Assets: $6,595,945
LIABILITIES
Accounts Payable: $206,404
Decommissioning Liability: $309,904
Liabilities On Asset Held For Sale: $943,472
Deposit: $65,505
Total Liabilities: $1,525,285
NAV $6,595,945 - $1,525,285 = $5,070,660
Management Discussion Highlights
Company Overview
The Company is a reporting issuer in British Columbia and Alberta and trades on the TSX Venture Exchange
(“TSXV”) under the symbol “EW” as a Tier 1 issuer. The Company currently carries on business in one operating
segment, being the acquisition of, exploration for and production from petroleum and natural gas properties. The
Company’s current portfolio consists of interests in exploration concessions in New Zealand and Romania and
producing properties in the Taranaki Basin, New Zealand. The Company has agreed to sell its interest in PEP 54877
and PMP 60291 which comprise the majority of its New Zealand assets. See “Proposed Disposition of New Zealand
Oil & Gas Assets”. The Company also holds investments in common shares of Advantage Lithium Corp.
(“Advantage Lithium”) and Seaway Energy Services Inc. (Seaway”), public companies whose common shares trade on the
TSXV. The Company’s principal office is located at #1305 - 1090 West Georgia Street, Vancouver, BC, V6E
3V7.
Proposed Disposition of New Zealand Oil & Gas Assets
On June 24, 2019 the Company signed a heads of agreement (the “HOA”) with a private arm’s length New Zealand
company (the “Buyer”) pursuant to which the Company has agreed to sell its interest in PEP 54877 and PMP 60291
(collectively, the “Permits”) which comprise the entirety of the Company’s assets in New Zealand (the “Transaction”).
On October 5, 2019 the Company and the Buyer signed the definitive agreement ( the “Definitive Agreement”) for the
sale and purchase of the Permits under the Transaction.
The Permits are the subject of a joint operating agreement (the “JOA”) between EWNZ, a wholly-owned subsidiary of
the Company, and Cheal Petroleum Limited (“CPL”). The disposition of the Company’s interest in the Permits will be
conditional upon the waiver of CPL of its rights under the JOA to acquire the Company’s interest in the Permits, and
the waiver or satisfaction of any other obligations as may exist to CPL.
Pursuant to the terms of the Definitive Agreement, and in consideration of the Transaction, the Buyer will pay the
Company US $1,900,000 in cash. The effective date for the sale is April 1, 2019 and payments are staged over 16
months of closing with initial payment of US $1,000,000 with normal closing adjustments, due on closing. On
August 7, 2019 the Company received Company shareholder approval. Completion of the Transaction is subject to
approvals to the transfer from New Zealand’s Overseas Investment Act 2005 and New Zealand Petroleum and
Minerals (“NZP&M”) and final TSXV approval.
Romania
During fiscal 2010 the Company was informed by the government of Romania that it had been awarded four
exploration blocks located in the Pannonian Basin, in western Romania. In May 2011 the Company signed petroleum
concession agreements with the National Agency for Minerals and Hydrocarbons (“NAMR”) the government agency
in Romania which regulates the oil and gas industry.
The four concessions have specific mandatory work programs (the “Romania Work Programs”), which were
estimated at US $62,741,000 for all four programs. Production from the concessions is also subject to royalties of
between 3.5% to 13.5% based on quarterly gross production payable to the government.
On May 20, 2011 the Company and Naftna Industrija Srbije j.s.c. Novi Sad (“NIS”), an arm’s length corporation,
signed a memorandum of understanding to jointly explore the four exploration blocks in Romania. On October 27,
2011 the Company and NIS signed a farm-out agreement (the “Farm-out”). Under the terms of the Farm-out, NIS has
paid the Company a total of $525,000 for the assignment of an 85% participation interest and operatorship of the
Romania Work Programs to NIS. NIS is the operator of the four concessions and has the obligation to fund the
Romania Work Programs, including environmental work, 2D and 3D seismic acquisition and processing, and the
drilling of 12 wells. The Company retains a 15% carried interest in each block through the obligatory Phase I work
program and an optional one year Phase II work program which carries additional commitments. The current expiries
of the Phase I terms are as follows: Block EX-2 December 12, 2021, Block EX-3 December 14, 2021 and
November 22, 2020 for Blocks EX-7 and EX-8. If a commercial discovery is made, the Company is responsible for its
15% interest in development of the commercial discovery.
As operator, NIS has proposed and is actively progressing comprehensive exploration programs in the EX-2, EX-3,
EX-7 and EX-8 exploration blocks in Romania. It should be noted that all activities are dependent on securing the
necessary government and local approvals.
On Block Ex-2, acquisition program of 3D seismic in the amount of 170 Km2 was completed in Q3/2019 (calendar)
and processing of the data is underway.
On Block EX-3, processing of the data acquired last year on 223 km2 3D seismic program has been finished.
Interpretation of the data is ongoing and results are expected by the end of December 2019.
On Block EX-7, an exploration well, Bvs-1000, was drilled in 1Q/2019 (calendar) to a total depth of 3,800 meters and
encountered several potential hydrocarbon bearing zones as identified on logs. Testing is now expected to commence
in 1Q/2020(calendar). A deviated appraisal well on the Teremia North discovery, Ter-1001, was drilled in 1Q/2019
(calendar) and encountered several potential hydrocarbon-bearing zones. A long-term test was conducted from April
to July 2019 which established a stabilized oil flow rate of approximately 150 bopd. Extended well testing is ongoing.
On Block EX-8, a second deviated appraisal well on the Teremia North field, Ter-1002, was spudded in September
2019 and has been drilled to a measured depth of more than 2,600 metres. Extended testing is planned. An
exploration well, Pes-1000 was drilled and completed in 3Q/2019 (calendar) to a total depth of around 2,500 metres.
Several potential hydrocarbon bearing zones were encountered and testing is planned to commence before the end of
December 2019.
NIS will be funding 100% of the costs and fully carrying the Company through the commitment work programs in
each of the blocks in return for earning an 85% interest in each licence.
Investments
As at September 30, 2019 the Company held 1,719,000 common shares of Advantage Lithium and 512,400 common
shares of Seaway. The September 30, 2019 fair value of these investments was $554,709. Certain current and former
directors and officers of the Company are also current and former directors and /or officers of Advantage Lithium and
Seaway.
Outstanding Share Data
The Company’s authorized share capital is unlimited common shares with no par value. As at November 27, 2019
there were 89,585,665 outstanding common shares and 3,415,000 share options outstanding with exercise prices
ranging from $0.09 to $0.135 per share.
bell345
8 years ago
http://seekingalpha.com/article/3961805-east-west-petroleum-teaches-scrooge-rake-cash?auth_param=lh1sj:1bfm0af:457fc697ee2c211e5b25938f0c1c4391&uprof=45&dr=1#alt1
Summary
The company has about C$8 million in cash along with a c$10 million market cap and no long-term debt.
Cash flow in the nine-month period was about C$609,000.
The company has permission to purchase and retire up to 10% of its common stock, which should limit downside risk.
Partner NIS is now set to drill the first joint venture well staring in the second quarter in Romania potentially adding a lot of value to the company if successful.
New Zealand prospects, in addition to a cash flow also have speculative projects in the development stage.
It must be nice to be able to sit around all day and collect money. There are companies out there that worked a lot harder and are going bankrupt as a result. But at the end of its third quarter, East West Petroleum Corporation (OTCPK:EWPMF) reported that cash flow from operations was C$609K for the nine-month period. Since its partners have delayed drilling any wells in the current environment, it keeps adding to its cash hoard. There is an occasional well rework or maybe some lease bidding that uses some cash, otherwise the cash pile keeps building. Life can be tough.
However, management is just as tight with its cash as it is managing its assets. Rather than tender for outstanding shares, management applied to purchase the shares on regular transactions. At the close of the stock market on Friday, March 25, 2016, the market cap of the common stock was almost C$10 million. Since the company has almost C$8 million to spend on that market cap, management has permission this time to re-purchase nearly 10% of the company's common stock over the next year. It can re-purchase as much as 2% in any 30 day period, so if the price drops low enough, it will be interesting to see if the company receives permission to purchase more stock. It has the cash flow and the cash balance to do so if it chooses. In any event the company serves as a very large purchaser of its own common stock which will decrease the downside risk to investors for the next 11 months or so. That relatively large amount of cash on the balance sheet will also decrease the downside risk of the common stock.
Plus the company is debt free. It does have some partnership obligations, but it definitely has the cash to meet those obligations at this time. So where is the growth possibilities for a company like this? Clearly, an investor who pays C$.11 per share or US$.08 per share is paying mostly for the cash hoard with just a little left over for the company operations because the cash is roughly four-fifths of the market value of the stock. But subtracting the cash out from the market value and then dividing the remaining market value by the annualized cash flow figure results in a remaining value-to-cash flow of about 2:1. That ratio is exceptionally cheap by any measure, even for cash flow that will decline without new drilling. Few companies at this stage in their development have a ratio anywhere near that, and usually far more debt.
The company is a partner with Tag Oil (OTCQX:TAOIF). Together they share production from an operating lease that usually nets East West Petroleum roughly 200 BOED. Right now, one of the wells is having mechanical difficulties so it is offline, and another well is being evaluated for commercial production. So there is room for growth from the third quarter production, just by fixing one well, and having the other well produce commercially. However, the partnership does not move very quickly at these low commodity prices, but there is some very real room for growth by bring the G1 well onto production (if and when the partners decide to finally do that).
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