Pulse Oil Corp on the road to 4,600 boe/d, says broker Mackie

Last week, the firm revealed it had upped output from around 70 barrels of oil equivalent per day to more than 300 Boe/d..
Pulse Oil Corp on the road to 4,600 boe/d, says broker Mackie
Pulse has ambitious plans to lift production

Broker Mackie repeated a 'speculative buy' stance on junior producer firm Pulse Oil Corp (CVE:PUL) on the back of its ambitious operational plans.

"Over the next two years, Pulse plans to build a substantial production base through additional well reactivations, a Mannville development drilling program and through the implementation of the EOR (enhanced oil recovery) project at Bigoray which could increase corporate production to 4,600 boe/d (barrels of oil equivalent per day)," notes analyst Bill Newman.

Last week, the firm revealed it had upped output from around 70 barrels of oil equivalent per day to more than 300 Boe/d (84-per-cent oil) with the start of Pulse's planned reactivation program in its core Bigoray area.

In coming weeks, Pulse plans to reactivate another five to seven wells at Bigoray, and one at its Queenstown asset.

The massive resource upside, however, comes from the miscible flood (rather than just waterflood) EOR project at two Nisku reefs at Bigoray, and, with the completion of the well reactivations, infill drilling and initial response from this EOR program, output is targeted to increase to around 1,680 boe/d in 2018, reckons Pulse.

With the full impact of the EOR work, this is earmarked to grow to 4,600 boe/d in 2019.

At Bigoray, two Nisku reefs have produced an average of 35% of the 26 million barrels (mmboe) of petroleum initially in place (PIIP) under waterflood, but the average recovery factor of nearby reefs developed with a miscible flood is around 80%.

Assuming Pulse achieves a similar recovery factor, a miscible flood has the potential to add up to 12 mln barrels, says Newman.

"Assuming a recovery factor at the bottom end of the range of 55%, and a modest $15/boe cash flow netback, the potential NPV10 is $78 million ($0.61/fd share).

"With a recovery factor equal to the average of 80% and a $15/boe netback, the NPV10 increases to $177 million ($1.39/fd share)," says the analyst.

"The potential upside from a successful Nisku Reef EOR project is so large that we expect substantial stock price appreciation, even if the miscible flood achieves expectations at the low end of the range," adds the analyst.

Pulse shares stand at C$0.18 at the time of writing. Mackie's target is C$0.50 each.

View full PUL profile View Profile

Pulse Oil Corp Timeline

Related Articles

Offshore oil operations
April 03 2018
United is growing its oil and gas business through relatively low-risk assets in Europe, meanwhile, big-bang exploration offshore Jamaica could prove to be a game changer
Coos Bay
October 12 2017
“We IPO’d with a value of £7.5mln, but within a year we intend to have assets valued at more than £25mln“
April 16 2018
"Our annual independent updated reserves report reinforces the potential of our quality and well positioned asset base in China,” said chairman Randeep Grewal

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright © personabelovo.ru, 2018. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated.