Featured Company /
Sonoro Energy Ltd.
Once a powerful oil and gas OPEC component, things changed for Indonesia in the late 1990’s, with investors souring on the Asian country because of regulations and production terms. The downturn hurt otherwise strong economic growth and sucked revenue from government coffers. In 2017, Indonesia is taking steps to try and make its energy sector more attractive to foreign investors, including revisions this month to the archipelago’s energy rules, with reports officials are drafting new regulations with respect to tax incentives to further bring in investment.
With a booming economy growing at an attractive 5.0% annual rate, with projections for 5.2% in 2017, and a voracious energy appetite, Indonesia surely would like to get back to the days where oil output was near 1.7 million barrels per day as in the mid-1990’s. To that point, they’re working to revitalize the sector.
It’s against this backdrop that management at Sonoro Energy Ltd. (TSX-Venture:SNV) sees an opportunity in Indonesia and is advancing its Budong Budong Production Sharing Contract (PSC) in Indonesia’s province of West Sulawesi. The Calgary-based company is targeting this area specifically to revisit historical shallow successes of oil exploration where giant oil seeps are considered by some to be the biggest and best ever documented in Indonesia, yet remain largely untapped.
Companies like Doda Oil, Shell and Gulf have worked in this area, with data lending validation to the presence of prolific oil and gas. Sonoro and its wholly owned subsidiary, Stockbridge Oil and Gas Ltd., have significant exploration and production experience in Southeast Asia, experience gained by team members during tenures at Shell (NYSE:RDS.A), ARCO, P.T. Petcon, Bukit Energy, Total and more. Some of the seasoned vets worked on exploration of the Palangkaraya block in Indonesia, which was sold to ConocoPhillips (NYSE:COP). In 2015, COP, which has been working in Indonesia for nearly 50 years, unveiled its intentions to invest more than $2.5 billion in the country.
The Sonoro team is led by CEO Richard Wadsworth, a professional petroleum engineer with over 25 years of international oil and gas experience. Amongst his other accolades, Wadsworth founded Bankers Petroleum, building it from the ground up; the company went on to produce in the range of 20,000 barrels-of-oil equivalent per day before being sold to China’s Geo-Jade Petroleum for C$575 million in cash in March 2016. Now, Wadsworth, who had an international upbringing including places like Indonesia, has his sights set on the country for his next O&G business.
Insiders – as well as management’s friends and family – have plenty of skin in the game. Management and board members control about 31% of the 177 million outstanding shares. Friends and family control about 24%, leaving only 40% for the public. The true float of this tightly-held company is likely quite small considering most of that 40% is in the hands of people that came in recently as part of a C$3.6 million non-brokered placement completed in May.
The company had assets in Iraq that it sold last December due to ongoing conflict in the country that had development at a standstill with the exploration license in a state of “Force Majeure” to focus on the Indonesia project. Subsequently, they’ve moved forward expeditiously to fast track production at Budong Budong.
The block is 1,099 square kilometers with oil and gas shows discovered already at shallow depths (450-750 meters) in the LG-1 well, with similar shows at KD-1. An independent prospective report estimates the property to host an unrisked prospective recoverable equivalent of 15.9 million barrels in a net-mean-case scenario.
In January, Stockbridge received a one-year extension on the PSC license. In May, Sonoro raised the aforementioned C$3.6 million, money earmarked for drilling at Budong Budong. That was followed in June and July by approval from SKKMIGAS, Indonesia’s national oil and gas regulator, of an environmental plan that includes drilling up to seven new wells, making the land acquisition and completing the civil works for the first well. Since, the drilling rig and associated services and equipment have been transported to the site; PT Advanced Services Indonesia (ASI) contracted as the driller; and the first bit expected to break ground this month to drill an appraisal well offsetting the LG-1 well.
After a delay that resulted in Sonoro firing the first contracted driller for not performing in a timely manner, the new schedule with ASI handling the drilling has been green-lighted by SKKMIGAS and appears to remain on schedule.
Investors will now be on the lookout for the next milestone of spudding the up-dip well, ultimately leading to evaluation of the drill results, which could serve as a catalyst for the stock that is lumbering around the area of 3.5 cents, equating to a market capitalization of only about $6.2 million.
With the proven leadership team, experience in the region, a nearby refinery (Balikpapan’s Pertamina refinery is less than two days by tanker) and Indonesia consciously making an effort to attract investment in its oil and gas fields, little Sonoro Energy is quietly positioning itself to capitalize on what could be a lucrative endeavor in the country.
Corporate Snapshot:
Sonoro Energy Ltd.
Stock Symbol:
CA
Stock Exchange:
TSX-Venture
Sector:
Energy
52 Week High:
$0.1050
52 Week Low:
$0.0300
Current Stock Quote / Chart / News: Click here
Information as of
September 21, 2017
Once a powerful oil and gas OPEC component, things changed for Indonesia in the late 1990’s, with investors souring on the Asian country because of regulations and production terms. The downturn hurt otherwise strong economic growth and sucked revenue from government coffers. In 2017, Indonesia is taking steps to try and make its energy sector more attractive to foreign investors, including revisions this month to the archipelago’s energy rules, with reports officials are drafting new regulations with respect to tax incentives to further bring in investment.
With a booming economy growing at an attractive 5.0% annual rate, with projections for 5.2% in 2017, and a voracious energy appetite, Indonesia surely would like to get back to the days where oil output was near 1.7 million barrels per day as in the mid-1990’s. To that point, they’re working to revitalize the sector.
It’s against this backdrop that management at Sonoro Energy Ltd. (TSX-Venture:SNV) sees an opportunity in Indonesia and is advancing its Budong Budong Production Sharing Contract (PSC) in Indonesia’s province of West Sulawesi. The Calgary-based company is targeting this area specifically to revisit historical shallow successes of oil exploration where giant oil seeps are considered by some to be the biggest and best ever documented in Indonesia, yet remain largely untapped.
Companies like Doda Oil, Shell and Gulf have worked in this area, with data lending validation to the presence of prolific oil and gas. Sonoro and its wholly owned subsidiary, Stockbridge Oil and Gas Ltd., have significant exploration and production experience in Southeast Asia, experience gained by team members during tenures at Shell (NYSE:RDS.A), ARCO, P.T. Petcon, Bukit Energy, Total and more. Some of the seasoned vets worked on exploration of the Palangkaraya block in Indonesia, which was sold to ConocoPhillips (NYSE:COP). In 2015, COP, which has been working in Indonesia for nearly 50 years, unveiled its intentions to invest more than $2.5 billion in the country.
The Sonoro team is led by CEO Richard Wadsworth, a professional petroleum engineer with over 25 years of international oil and gas experience. Amongst his other accolades, Wadsworth founded Bankers Petroleum, building it from the ground up; the company went on to produce in the range of 20,000 barrels-of-oil equivalent per day before being sold to China’s Geo-Jade Petroleum for C$575 million in cash in March 2016. Now, Wadsworth, who had an international upbringing including places like Indonesia, has his sights set on the country for his next O&G business.
Insiders – as well as management’s friends and family – have plenty of skin in the game. Management and board members control about 31% of the 177 million outstanding shares. Friends and family control about 24%, leaving only 40% for the public. The true float of this tightly-held company is likely quite small considering most of that 40% is in the hands of people that came in recently as part of a C$3.6 million non-brokered placement completed in May.
The company had assets in Iraq that it sold last December due to ongoing conflict in the country that had development at a standstill with the exploration license in a state of “Force Majeure” to focus on the Indonesia project. Subsequently, they’ve moved forward expeditiously to fast track production at Budong Budong.
The block is 1,099 square kilometers with oil and gas shows discovered already at shallow depths (450-750 meters) in the LG-1 well, with similar shows at KD-1. An independent prospective report estimates the property to host an unrisked prospective recoverable equivalent of 15.9 million barrels in a net-mean-case scenario.
In January, Stockbridge received a one-year extension on the PSC license. In May, Sonoro raised the aforementioned C$3.6 million, money earmarked for drilling at Budong Budong. That was followed in June and July by approval from SKKMIGAS, Indonesia’s national oil and gas regulator, of an environmental plan that includes drilling up to seven new wells, making the land acquisition and completing the civil works for the first well. Since, the drilling rig and associated services and equipment have been transported to the site; PT Advanced Services Indonesia (ASI) contracted as the driller; and the first bit expected to break ground this month to drill an appraisal well offsetting the LG-1 well.
After a delay that resulted in Sonoro firing the first contracted driller for not performing in a timely manner, the new schedule with ASI handling the drilling has been green-lighted by SKKMIGAS and appears to remain on schedule.
Investors will now be on the lookout for the next milestone of spudding the up-dip well, ultimately leading to evaluation of the drill results, which could serve as a catalyst for the stock that is lumbering around the area of 3.5 cents, equating to a market capitalization of only about $6.2 million.
With the proven leadership team, experience in the region, a nearby refinery (Balikpapan’s Pertamina refinery is less than two days by tanker) and Indonesia consciously making an effort to attract investment in its oil and gas fields, little Sonoro Energy is quietly positioning itself to capitalize on what could be a lucrative endeavor in the country.
Forward Looking Statements
This report includes forward-looking statements that reflect current expectations about its future results, performance, prospects and opportunities. Sonoro Energy Ltd. has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause Sonoro Energy Ltd.'s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company's growth expectations and ongoing funding requirements, and specifically, the Company's growth prospects with scalable customers, and those outlined above. Other risks include the Company's limited operating history, the Company's history of operating losses, consumers' acceptance, the Company's use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company's securities, the possible volatility of the Company's stock price, the concentration of ownership, and the potential fluctuation in the Company's operating results.
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