Smart Money Flows Into Albanian Oil Company
Gauging the upside of an oil exploration company is like trying to measure a moose’s antlers while riding it backwards.
Most retail investors find seismic and drilling data difficult to interpret.
But some deep pocketed investors have their own in-house geologists. It’s instructive to observe where these well-known investors are putting their money.
One company that has attracted the attention of technically savvy investors is Petromanas (PMI-TSX) – a Canadian junior that owns the rights to 1.7 million acres in a proven hydrocarbon basin in Albania.
Recently, George Soros – a billionaire investor, Endeavour Mining Corp – with a merchant bank division, Peninsular Merchant Bank and Columbia Wanger Asset Management have all made big investments. Together they own about 25% of the company.
Previous operators on the PMI blocks have made big discoveries. In the 1990s, Shell and Coparex acquired approximately 1,800 kilometres of seismic on these concessions. According to a Gustavson Associates audit, Shell and Coparex discovered a deep under-thrust structure with the potential to contain a combined 820 million barrels of recoverable oil.
Shell and Coparex suspended all exploration activity in reaction to extreme unrest in Albania and the conflict in neighbouring Kosovo. That political risk is now at an all-time low, allowing an entry opportunity for PMI.
In fact, Albania is a European Cinderella story, as foreign investment and GDP growth ramp up. In 2009, the Albanian economy had the best growth rate in Europe (3.6%). Foreign investments have increased 59 percent in the last two years.
The BP spill has altered the potential value of PMI’s large land position on the European continent.
Under the terms of the PSCs, Petromanas has a 100% working interest in six onshore blocks (Blocks A, B, D, E, 2 and 3) that comprise more than 1.7 million acres across Albania’s Berati thrust belt.
There are nine existing oil fields within Blocks 2 & 3, including the largest onshore oil field in Europe, Patos-Marinza, discovered in 1928, currently operated by Bankers Petroleum. PMI has a land position surrounding and below Bankers’ producing wells.
PMI just appointed senior oil and gas man Glenn McNamara as CEO, along with his team of Bill Cummins as CFO and Hamid Mozayani as COO.
Previously with Exxon Mobile (XOM-NYSE), McNamara has most recently been the President of BG Group Canada (BG-LSE), part of a global natural gas company with 2009 operating profits of $6 billion.
Getting McNamara is a big win for Petromanas. He has a track record of exploring and developing international assets. And PMI is fertile ground for development.
The “smart money” is betting that this moose has big antlers.
PMI is worth a look.