Source: Streetwise Reports 12/20/2018
Natural oil and gas company strikes oil in Asia, and releases strong numbers for its 2018 Q3 financial and operating results.
Pan Orient Energy Corp. (POE:TSX.V), a Calgary-based natural oil and gas company, has reported recent progress for its developments in both Asia and Canada.
The company’s projects are split into three separate countries: Thailand, Indonesia and Canada.
Asia Updates: Successful Well Appraisals and Future Drilling Plans
Pan Orient Energy owns 50% of its subsidiary Pan Orient Energy (Siam) Ltd., the operator with a 100%-working interest in oil-producing Concession L53/48 onshore Thailand.
In late October 2018, the company announced L53-DD1 well has “combined 26 meters of net oil pay within three separate sandstone reservoirs between a true vertical depth of 960 to 1,125 meters.”
The company made it clear that the L53-DD1 discovery will not commence production until the completion of the L53-DD2 appraisal well due to limited well pad space.
The appraisal results: The L53-DD2 well was drilled to a measured depth of 1,903 meters (1,589 meters true vertical depth) with a subsurface target approximately 560 meters southwest of the L53-DD1 well. The targeted oil bearing sands came in approximately 26 meters higher at L53-DD2 (compared to the equivalent sands at L53-DD1).
On November 29, Pan Orient Energy announced that the L53-DD1 exploration well is on the 90-day production test. The company noted that it is producing steadily between 778 to 784 barrels per day of “23.6 degree API oil with a BS&W of 0.4% from the “DD sand” through 5.2 meters of perforations between the depths of 1157.2 – 1162.4 meters (1116.4 – 1121.3 meters true vertical depth).”
L53-DD1 has averaged 779 BOPD during the past five days of testing. The L53-DD2 well, on the other hand, commenced a 90-production test of the “EE sand” on November 26, 2018, the same day approval was received from the Thailand Department of Mineral Fuels.
As of December 3, management announced the L53-DD2 well is producing at a steady rate of 658 BPD during its testing.
For the duration of the testing, the company plans to test the EE sand at L53-DD2 (the deepest of four oil-bearing sands encountered in the well). Records show the EE sand “represents 3.9 meters (true vertical thickness) of the 32 meters of total interpreted net oil pay encountered in the well.”
While EE sand testing will continue, management says the test results won’t necessarily indicate long-term performance or ultimate recovery.
Furthermore, the company submitted a new L53DD production license that encompasses the discovery area.
In late January to early February 2019, Pan Orient Energy noted it will commence a two-appraisal well drilling program, which will include “one appraisal well drilled from the existing L53DD well pad (L53-DD3) and an appraisal well at L53-B (L53-B1).”
More exploration drilling is on the list for a new exploration well location “approximately 600 meters north of the DD well pad and at L53AC-E (located approximately 15 kilometers NW of the L53-D oil field).” Dependent on various approvals, drilling for said well is to commence in August 2019.
Mackie Research follows Pan Orient Energy. Analyst Bill Newman wrote on December 3, “This morning, Pan Orient (POE) announced that the L53-DD1 discovery well tested ~780 bbl/d (391 bbl/d net) of 23° API oil. POE also announced that production testing of the L53-DD2 follow up appraisal has just commenced. We are very encouraged with the initial test results, which we expect to generate significant cash flow to fully fund a development and exploration program in Thailand in 2019.”
Pan Orient has other news in Asia.
In Indonesia, Pan Orient has 49% interest in the East Jabung production sharing contract onshore Indonesia (non-operated after farmout).
In November, the company announced that “the quarry permit that was required in order to commence construction of the Anggun-1X exploration well access road has been approved and road construction has commenced.”
The operator now estimates the Anggun-1X exploration well will commence drilling sometime between March 15 and May 15, 2019.
Back to the Origin: Canada
Circling back to its origin in Canada, Pan Orient Energy owns 71.8% of its subsidiary Andora Energy Corporation.
Andora currently holds interests “ranging from 10% to 100% in 88 contiguous sections of heavy oil sands leases in the Sawn Lake Property, which lies within the central Alberta Peace River Oil Sands area.”
Andora is also the operator of a demonstration project at Sawn Lake. From late 2014 to early 2016, the project produced bitumen from one steam-assisted gravity drainage (SAGD) well pair.
Pan Orient President and CEO Jeff Chisholm stated, “With the recent oil discovery in Concession L53 onshore Thailand and the commencement of road construction for the Anggun-1X exploration well in Indonesia, it is shaping up to be a very exciting next seven to eight months.”
Mackie rates Pan Orient a Buy. In his December 3 update, analyst Bill Newman wrote, “We maintain our BUY recommendation and CA$3.25 target price on the company’s strong financial position, funded Thailand drilling program, and high-impact exploration potential in Indonesia.”
Pan Orient shares are currently sitting at CA$1.34.
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Disclosures from Mackie Research, Pan Orient Energy Corp., Update, December 3, 2018
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