Imagine if you knew the results of a horse race before it happened. You would have the ultimate edge over all the other punters trying to make money from that race.
Information is power – and the company we are reporting on today has information in spades. Incredibly, they have found the holy grail of oil exploration: historic, detailed well logs. Without spending a single cent on exploratory drills.
This company has spent 5 years on the ground in an emerging oil hot spot, where, following the fall of an empire, a country is desperate to break the shackles of its former controller. The country is teeming with ready to go infrastructure and houses a market starving for cheap energy.
Wisely, this little company has teamed up with the locals, finding a group on the ground who can draw on vast experience in both the local geology and business dealings. These astute locals managed to unveil previously lost well log data, snaffling up a full 100% stake in a promising 172 km2 onshore brownfield licence, in this European oil hot spot.
This company’s 100% owned license has been independently estimated to be an 800 bcf prospective onshore resource. Consequently, they have a verified resource, with the associated reduction in risk on the asset. This junior, with a market cap hovering around AUD $16 million, is sitting on a potential resource which could be worth over US$ 2 billion.
That’s right, they’ve got detailed well logs, without drilling a single hole (and spending investors’ hard earned cash), the logs look very promising (an 800 bcf prospective resource), and they own the onshore brownfield licence, 100%!
The majors are fuming, now years behind our junior Aussie explorer, no local contacts, and paying through the nose to desperately stake some claim in the emerging oil hot spot of Ukraine.
In fact, while our junior company bought into Ukraine way back in 2007, it was only halfway through 2013 that Chevron put US $25 billion down to acquire just a 50% interest in a licence nearby.
At the Next Oil Rush, we only report on the companies we think are a great investment, and that we have invested in ourselves. The Next Oil Rush holds LONG TERM positions in EVERY SINGLE Company we write about, and this one is no exception – introducing our newest portfolio addition: Cossack Energy Ltd (ASX: COD).
So how did COD get access to over 30 years of drilling results, without doing a single drill themselves?
Quite unbelievably, COD’s license showed resource potential almost forty years ago! How is that possible? Not only was the former Soviet Union very good at keeping an eye on things, it was a prodigious record-keeper, with exceptionally advanced drilling and data logging techniques. So advanced, they are indistinguishable from those used today.
The citizens of the former Soviet Union developed a unique way of quietly generating income under the watchful eye of communism – if there was work to be done, someone who knew someone who needed a pay cheque would broker the job. To this day this cultural legacy remains – the importance of dealing locally with those in the know is a huge factor for success in a lot of countries, not least Ukraine.
This is where COD has yet another advantage over the majors who are scrambling to Ukraine. COD already has the data, and the majors seem to be throwing money all around the region, with no local relationships in place to help them.
These local relationships were a significant factor in COD acquiring a 20-year term, 100% interest in a 172 km2 gas and oil field known as the Limnytska license, with a 40% shareholding by the three local vendors who brokered the deal. Not only that, COD retained excellent contract clauses to maximise profit and cashflow. You can see the location of COD’s Limnytska license in the image below (just ignore all the late coming oil super majors nearby for now, more on that later):
COD has been on the ground for five years building local relationships with a view to doing serious business down the tracks (keep reading to find out their business plan and how it fits in to the Ukraine energy market). The majors (such as Chevron) have only just begun to catch up in the last six months (see below for the deal they got compared to our guy!).
The Next Oil Rush track record
Regular readers of The Next Oil Rush will be familiar with our long standing interest in junior oil and gas stocks. Our latest report on Rey Resources (ASX:REY), revealed them to be the mystery third man in the Canning Basin, and following our article release, REY has been up nearly 75% since.
The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance
We published a report on Swala Energy (ASX:SWE), titled The last junior oil explorer operating in this exciting region with this same JV partner went up 800% in a matter of months. SWE has traded as high as 70% since.
Since our exclusive report on Pura Vida Energy (ASX: PVD), titled Why has this stock got analysts predicting four thousand per cent gains? was released, the PVD share price has risen as high as 40%.
And don’t forget TSX: AOI, which was our ‘tip of the decade’ in February 2012 at around CAD$ 1.8 and has been as high as CAD$ 11.25 since – that’s over 600%!
The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance
Today, we’re predicting potential investors will be very interested in hearing what COD knows about doing business in Ukraine, particularly with Chevron frantically snapping up every interest it can right by COD’s Limnytska license! Keep reading to find out!
The Limnystka licence: partially proven resources perfectly placed (try saying that 3 times fast) in the emerging oil hotspot of Ukraine
The current Ukrainian economy is firmly on the side of COD, with Ukraine prioritising entry into the EU for gas and oil export to the rest of Europe. For some time, Ukraine has been fulfilling the pipedreams of Russia, literally, by distributing Russian gas through Ukraine pipelines. And Russia’s dreams are expensive! Ukraine, which has a high-volume gas demand for its high-tech production industries, would also like to be more energy secure and produce its own domestic gas needs.
COD put the early bet on Ukraine, setting up there over 5 years ago, predicting Ukraine’s entry into the EU ahead of the pack. Once Ukraine’s admission to the EU is confirmed, it’s likely that there will be a rush to invest in Ukraine – the astute investors would want to have their bets placed earlier rather than later.
Put together a junior exploration company that has excellent local contacts and contracts, confirmed shows of gas and oil play in their asset, with a modernised country ripe to produce gas and export to the EU, and investors have the perfect timing to get in on the ground!
COD has a large potential upside, with an 800 bcf prospective onshore resource at Limnytska. The beauty of the COD story is its relatively low technical risk. Forget about expensive offshore exploratory drills here. COD is sitting on a potential resource which could be worth over US$ 2 billion. With a market cap hovering around AU$ 16 million, as investors catch on, COD shareholders will be centre stage to claim potentially significant gains.
Limnytska is an incredibly versatile block, with strong potential for conventional gas play. This is of particular near-term interest as Ukraine and the EU, as we mentioned, are very interested in getting Ukraine’s gas industry up and running. And with infrastructure in place to pipe Russian gas, it should be much cheaper to get Limnytska gas into commercial production and distribution due to the shorter distance to market.
As well as the conventional gas, Limnytska also has conventional oil and potential for unconventional oil and gas. With indications from recent events (keep reading to find out what’s going on in Ukraine) suggesting Ukraine could be looking at unconventional extraction in ten years time (within Limnytska’s 20-year term), these resources could become more valuable with every passing year.
The reason why COD’s Ukraine asset is so attractive is that it’s a large license, 100% owned and ONSHORE. Limnytska is in the middle of a mature, brownfield petroleum area. As we mentioned above, COD have the lower risk of a verified resource with potential upsides normally associated with frontier reserves. Keep reading below to find out the unique geological situation of the Limnytska license but for now, consider the commercial benefits of COD operating in a mature oilfield. Limnytska is teeming with oil and gas transfer pipes, storage tanks and is situated in a country with huge domestic demand and next door to a European market hungry for energy. This translates to a cheap and quick commercialisation for COD, and an attractive investment proposition.
In addition to these massive energy markets, Ukraine has a high gas price environment of US $12/mcf and 50% netback which makes the economics mouth-watering. Netback is the profit on a single barrel of reserve. For example, if it costs US$ 100 to produce a barrel and sale price is US$ 125, then netback is US$ 25. So, 50% netback means profits match the costs of production. Considering that 75% of an oil and gas companies’ expenditure is in exploration and extraction, you can see this indicates the low exploration costs of COD. Low commercialisation costs combined with these figures is why the majors are desperate to buy into Ukraine. Luckily for COD investors, COD beat the majors to it.
Generally, a license located in a developed area (as is the case with Limnytska) is extremely difficult to acquire. However, the team at COD have been in Ukraine for the last five years forging local relationships that made all the difference in obtaining a total interest in Limnytska. When the time came for a deal to be struck with the local vendors, it was a smooth process to structure a great win-win deal for both parties. The vendors are staying on and supporting COD all the way, getting mainly scrip from the deal with only minor cash up front (more on performance targets) but with most of the cash payouts via project cash flow. We break down the benefits of this business deal later on, but for now, know this gets a big tick from The Next Oil Rush.
Having local support makes all the difference when trying to commercialise oil and gas prospects. Probably strengthened over some “quiet” vodkas, COD has Ukraine relationships that allowed them to uncover a wealth of historic data from the region. The prospects of Limnytska are partially proven already, with three historic wells (two in the prospect, and one next door) and a great set of data.
COD can leap ahead of other companies and instead of exploratory drilling, move straight into appraisal-like drilling following a seismic program. This makes COD’s operations in Limnytska substantially less risky, both for business cashflow (as no expensive exploratory drilling is necessary), and also for Geological Chances of Success, which are double the best a junior exploration company can normally expect (see below where we break these numbers down).
If you want an introduction to the stockbroker we use to manage our investment in COD, Just fill in your details, we will make an introduction and they will be in touch with you shortly.
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Why COD’s 100% interest in the Limnytska license has the benefits of frontier exploration for shareholders (and not the disadvantages)
COD has been quietly developing their Ukrainian exploration strategy for over five years, something the majors have only just caught on to. While COD bought the Limnytska interest way back in 2007, it was only halfway through 2013 that players like Chevron cottoned on and started investing in Ukraine big time, with a whopping US$ 25 billion slapped down on the table. All this, just to acquire a 50% interest to the west of Limnytska.
COD has struck it rich with their research (more on this below) on the Limnytska oil and gas field, which spreads over 172km2 in Western Ukraine. As you can see from the map, COD’s license is sitting right beside a major oil highway, transferring from Russia into Western Europe.
Limnytska has the advantage of being located just 10km away from multiple major gas transmission pipelines running into Western Europe and close to significant Ukraine gas storage facilities. That means any resources can be stored in existing storage facilities and distributed to markets with next-to-nothing costs. And even more compellingly, despite the Western Ukraine being old news with over 100 exploratory wells, Limnytska itself has never been in production. That means two perfect wells in Limnytska have just been sitting there, with a greater than 800bcf potential, waiting for COD to come along! Gas is the primary, near-term, focus for COD with an easy extraction and distribution plan facilitated by local infrastructure and gas demands from Ukraine and Europe.
So, what’s so great about Limnytska, and how on earth did COD find out what mid- and large- cap companies could not?
Limnytska is considered a lower risk, appraisal type opportunity by geologists, 100% owned by COD. COD have strong evidence supporting the existence of volumes greater than 800 bcf across two drilled wells that date back over 30 years. All this without touching a single drill rig or spending investors’ hard earned cash on exploratory drills!
Even better, the data COD has gotten hold of has deomnstrated a 53%-57% geological chance of success (GCoS). Seasoned experts will tell you that companies sometimes drill even on a 20% GCoS. If they are looking at a 30% GCoS then it’s a definite case to keep exploring. At a greater than 1 in 2 chance of success, COD are sitting on some very favourable odds, geologically speaking.
The reason COD can be so confident of these figures is they have been independently verified by UK specialists with a world-class reputation for translating Soviet drill logs. And the reason the logs on the Limnytska license are so detailed is the former Soviet government, under the idealism of Communism, used to pay their employees to drill by the metre, regardless of results. The more they drilled, the more they earned. That’s right, between 1922 and 1991 there were work crews diligently recording every nuance to the geology of Ukraine, regardless of what they found.
These extant logs may be an embarrassing record of the inefficiency of Communism, but they are also a testament to the excellent science of the former Soviet Union. Remember, this is the empire that put the first human in space. The format of the Limnytska license’s vintage logs is still being used in geological surveys today.
See what you can do with historical data!
But the mystery remains: How does one find such logs after the fall of an empire? Under the bed? No, of course not...that would be crazy.
From Russia with Love: Who is the next James Bond? From Sean Connery to Cossack Energy
In the 1960s, the same decade the second film in the Bond franchise was going massively over budget on set, Limnytska drill crews were pumping cash by the metre into Well 18, known as Vilkhivska, in the Limnytska license. At just over 5000 metres the drill string parted, leaving the bottom 2000 metres of drill string still in the hole. However, Vilkhivska already showed an active hydrocarbon system, with gas content up to 50%, and condensate, and oil. Had modern technology been employable then, the bottom 1000m of reservoir would have been analysed.
As it was, under a decade later in 1976, the second well in Limnytska, Pyvdenno Grinivska (PG 2), penetrated Mesozoic, Cambrian, Cretaceous and Jurrasic sections. All but the cretaceous section suggest pay, and full appraisal of the cretaceous section today may well yield results, given the log indications of the two wells.
So how did COD get its hands on this data? In the spirit of James Bond, COD used unusual investigative techniques. Instead of getting their Ukraine geological team to begin costly exploratory drilling and analysis, a PHD student and COD geologist managed to dig up the former Soviet Union drill logs bound in ribbons from under the bed...
Chevron: “Sure you don’t want to use our equipment?”
COD: “You’ve got your way, we’ve got ours.”
While large cap companies like Chevron may have the advantage of mountains of cash, COD has used its small size to its advantage. COD has been in Ukraine for five years and working with their small band of Ukrainian brothers for two years. This is a key advantage over the majors.
COD’s management understand that working with the locals makes or breaks foreign junior exploration companies. One of the reasons junior exploration companies fail isn’t that resources aren’t found but that these companies try to circumvent using local labour and equipment. COD’s Ukrainian team is highly experienced, with a diverse team including two expert octogenarians, both of whom were members of the former Soviet Union State Geological Society, and a young local PHD geologist specialising in unconventional oil and gas extraction.
So not only do COD have employees with forty years drilling experience in Western Ukraine and access to the State Geological Society’s vintage drill records, but they’ve also hired up-and-coming talent with the latest technological know-how. And considering the local vendors have all remained major shareholders in COD for a combined 40% holding, COD could not be better positioned to do business. COD have stated their intention to continue recruiting geological talent from Ukraine, which has high-quality university graduates and comparatively low wages. To The Next Oil Rush, this sounds like a sound business plan. And COD have already proven that Ukrainian talent working in conjunction with Western expertise gets results:
Cracking the code of the Limnytska license drill logs: why COD purchased 100% of the Limnytska license
Usually data gets lost in translation, but in COD’s case, the Limnytska drill logs found massive upside potential on reinterpretation. When COD sent that ribbon-bound drill log west to the UK for reinterpretation, the results were staggering. These results have been independently verified by Western Australian Company RPS Energy Services:
Former Soviet Union seismic data has confirmed the gross structural style of the Limnytska block. COD is planning further seismic evaluation very soon, along with appraisal-like drilling (more on this below). This access to vintage data has substantially de-risked COD’s Limnytska asset by confirming the Geological Chance of Success (GCoS) at 57% for shallow prospects and 53% for deep prospects:
Remember, a 30% GCoS is enough to make geologists very excited. So almost double the chance in a shallow prospect (always more easily extractable than deep prospects) is an incredible result. And the Commercial Chance of Success (CCoS) has been estimated at 80% on discovery, going up to almost 100% the greater the size of discovery.
This is due to the excellent infrastructure nearby and high domestic gas prices. So all it takes is one successful well and COD is in business!
COD investors can see with their own eyes just how ripe Limnytska block is for drilling with oil still seeping from Well 18:
The confirmed presence of hydrocarbons in the Limnytska block from Well 18 and Well PG 2 means COD is already substantially past the most expensive phase of the drilling cycle. Because of their unique position of holding a 100% interest in a mature oilfields region with existing infrastructure, COD will have lower costs once they are past appraisal, too:
Generally oil explorers will drill and hope they find something. Today, COD only needs to confirm how much.
The area around the Limnytska licence is attracting the majors like blowflies.
COD’s 100%-owned Limnytska license spreads over 172 km2 in Western Ukraine. There are three geologically analogous oilfields nearby: The Lopushnyanske oilfield (100km south-east of Limnytska) proved hydrocarbon play. The Rudkivske gas field (100km north-east of Limnytska) discovered gas in Jurassic and Miocene sediments. Finally, the Bilche-Volysta gas field exceeded 125mmscf/day in production with total recovery exceeding 1.3 Tcf.
As the area around the Limnytska block is such a great prospect, the major oil companies are moving in. Chevron is next door to COD with $25 billion commitment to the area. COD retains excellent farm-out prospects at Limnytska with their 100% interest and a 20-year tenure. And just announced, Chevron has signed on for another USD 10 billion interest in shale gas:
Limnytska is now practically surrounded by Shell, Exxon, Vitol, Chevron and ENI:
One major advantage of investment in mature gas fields over frontier fields is pre-existing policies favour the facilitation of unconventional extraction. It means Indigenous and environmental legislation has already been hashed out for conventional production and infrastructure. In the case of Ukraine (with a massive incentive to become more energy secure), pressure to maintain GDP levels from its established gas industry mean unconventional shale gas extraction is feasible within a decade:
While the prospect of unconventional gas is a long term play for COD, it potentially increases the value of any confirmed resources for farm-out with major players. Chevron is clearly already investing in future unconventional gas play in Ukraine.
Why Ukraine is ripe for investment
For some time now, Ukraine has been updating its federal laws to facilitate investment and trade in energy resources with Western Europe. And the EU has taken notice:
Handshakes at dawn? Not quite. This is official business. Ukraine has long been trying to diversify for energy security. With the current lack of competition, Russia has unusual market control over gas and oil prices in Ukraine. While we’d love to see Ukraine pull a masterful divorce from Russia Katie Holmes style, we’re betting this is a final separation everyone will see coming.
Ukraine is highly motivated to increase its energy security by supplying its own domestic markets. It’s also looking to distribute Ukrainian oil and gas through its pipelines to the EU rather than continuing to be a thoroughfare for Russian energy to reach Europe. Given the economic impetus for the country’s policies to facilitate foreign investment in Ukrainian oil and gas reserves, it’s inevitable that this will create a self-fulfilling prophecy. With increasing business pressure to join the EU from stakeholders as foreign investment rises, there will be no turning back.
And as Ukraine tells Russia that it needs ‘space’ in their relationship to see other people, investors in COD can potentially rub their hands together like the best counsel in Tinseltown.
Ukraine is determined to implement the right fiscal terms for investment
It’s a delicate art for a country to strike the right balance between State revenue and attractive terms for foreign investment:
Ukraine is showing its commitment to achieving a global investment market for the country’s energy resources by reducing tax by 3% down to 16% at the beginning of 2014:
A quick way to assess whether a country has good fiscal terms for foreign investors is to check whether any of the big players have chosen to invest. In the case of Ukraine, they are coming up trumps with a massive recent investment by Chevron for a whopping US$ 25 billion:
Add to the US $25 billion another US $10 billion by Chevron and you can see that the area is becoming a true oil hotspot.
http://www.reuters.com/article/2013/11/05/ukraine-chevron-idUSL5N0IQ23C20131105
This sort of investment is a sign of free market initiative by the big guns who firmly believe Ukraine is the next hotspot for supply of gas and oil to EU countries.
Beginners Guide to Ukraine - Politics, Energy and Economics
Let’s look closer at Ukraine’s energy supply and why it’s gotten companies like Chevron so excited about Ukraine’s potential.
Russia currently provides 25% of the EU gas supply, a staggering 80% of which is delivered through Ukraine pipelines:
There is high motivation and support from the EU for Ukraine to start producing and supplying that gas to the EU itself. With infrastructure already in place to deliver, once commercial production is found viable in Ukraine, nothing can stop them moving from distributor status to producer status for the 22 countries of the EU. And remember, COD holds a 100% interest in known oil and gas fields right by those pipes!
Within Ukraine, 31% of the country’s GDP is comprised of a high-tech industrial base (including an aerospace program):
Not only that, but Ukraine’s high-tech industry has extremely high energy needs for production, pushing Ukraine to be ranked 20th in the world for energy consumption from fossil fuels in the world, despite numbering 29th for population. Over 64 % of Ukraine’s installed generating capacity for electricity comes from fossil fuels.
In fact, Ukraine is almost entirely self-sufficient in electricity, but is lagging behind in meeting domestic demand for gas. This gas is also required to meet Ukraine’s high-tech industry needs, particularly the country’s massive aerospace industry, which ranks 9th in the world. This makes Ukraine’s gas prices of $12/mcf pretty mouth-watering! Large demand means whoever is supplying (currently, mostly Russia) could make a mint, and we’re backing COD!
Russia and Ukraine could have gone on bickering like an old married couple into the grave over who gets the pie, but Ukraine has taken steps to start shopping around for other partners through the EU energy think tank, INterstate Oil and GAs Transportation to Europe (INOGATE). Not as catchy as Watergate, we admit, but we do think this Inogate meeting is a watershed moment for Ukraine’s energy market:
Inogate introduced Ukraine to Latvia and Lithuania; two countries that have successfully broken the stranglehold Russia’s G-man gas company, Gazprom, had over them. Perhaps the rumours that Katie Holmes asked Nicole Kidman for advice on how to separate from Tom Cruise are true...at any rate, Ukraine is looking for advice from countries experienced in expanding their East European energy markets with the intention of following suit:
That’s Gazprom, as in the exact same Gazprom that’s been less than generous in its terms to Ukraine for gas prices:
This is gas on sold through Ukraine’s pipelines and into the EU; no wonder Ukraine wants out and the EU is offering support!
After all these issues with energy supply, it’s clear that Ukraine is keen to press forward and adopt the necessary pro-EU laws as fast as possible:
http://www.euractiv.com/europes-east/ukrainian-parliament-set-adopt-p-news-530335
With these political and business considerations The Next Oil Rush believes Ukraine is highly motivated to come on board with the EU’s transparent policy requirements for energy industries. In this way, Ukraine can meet EU benchmarks and get out from under Russia’s thumb. With the prospects of assimilation of Western law into Ukraine so the country can join the EU increasing all the time, trade prospects will only get better. The potential upside for the share prices of the early investor in COD is clear.
Why we’ve invested in COD, the “How to Make Money Investing in Junior Resource Stocks” checklist
We analysed COD our 20-point checklist, described in detail in our eBook How To Make Money Investing in Junior Resource Stocks and summarise here three key indicators for junior exploration company potential success. COD has come up trumps on all of them:
Assets – What assets do the company own? Is the asset base diversified?
A lot of our junior exploration companies are just getting started on their portfolios and only own one asset. So it’s less a question of how many assets does a company own, but what asset does a company own, how diverse is it, and how does it fit into the prevailing market?
COD’s 100% interest in the Limnytska license is a majorly diversified base:
With resource potential for near-term conventional oil and gas commercialisation, combined with an excellent fiscal regime due to Ukraine’s impetus for increased energy security, COD has the best of both worlds. With potential operations in mature oil and gas fields with pre-existing infrastructure, but frontier volumes of untapped oil and gas resource, there is definite share price potential for COD investors.
And don’t forget, Ukraine has indicated the potential for unconventional oil and gas extraction, and major players like Chevron are already making deals for this future. This increases COD’s leverage in the instance of any nearby discoveries, and also COD’s farm-out potential on any confirmed discoveries of its own in the Limnytska block. Lots of assets can weaken a junior’s market value as the over-complexity dilutes the company’s business proposition. But a diverse single asset, that’s another story!
3. Are there price catalysts?
NEAR TERM CATALYSTS make COD a prospective hit for interested investors
The Next Oil Rush has checked COD against our exacting eBook How To Make Money Investing in Junior Resource Stocks checklist and found it measures up on several fronts. Here’s a summary of COD’s near-term catalysts, just what early investors look for, and crucial to a shareholder’s early partial sales strategy:
COD is updating its resources data through a 2D seismic program (also additional vintage seismic lines could be obtained which should increase the confidence around the resource)
A farm-out possibility of the Limnytska deep prospect (and maybe even on the shallow prospect, too)
COD is considering the acquisition of additional licences in the region
Chevron has moved into the area next door to COD, creating nearology potential
Although a longer-term play, any news on Ukraine meeting EU benchmarks, and any news suggesting the beginning of unconventional oil and gas extraction in the country will increase the positive political environment for COD.
4. Market Sector: Is the company operating in an up and coming (or underappreciated) market sector?
The Next Oil Rush believes so! Remember those figures, Ukraine is teeming with oil and gas transfer pipes, storage tanks and is a country with a huge domestic and European market hungry for energy. This translates to a cheap and quick commercialisation for COD, and an attractive investment proposition.
In addition to Ukraine’s massive markets for energy, Ukraine has a high gas price environment of US $12/mcf and 50% netback which makes the economics mouth-watering. Low commercialisation costs combined with these figures is why the majors are desperate to buy into Ukraine.
By 2014 tax will have dropped 3% to 16% as a government incentive for foreign investment. And Ukraine is desperate to start dropping the price of gas that it currently receives from Russia, which is over 16% higher than what the EU pays, simply because Ukraine has no bargaining power. But once Ukraine starts producing its own, and bargaining with the power of the EU, the market should blow wide open. With COD already on lower production costs and stationed right by Ukraine pipelines, we at The Next Oil Rush think we have spotted a winner!
The Next Oil Rush Conclusion – COD is the smartest kid on the block
The Next Oil Rush is highly impressed with COD’s excellent management and business plan for the Ukraine oil and gas market. Five years in the making, it was only because of the hard work and dedication of its on-the-ground local team (not to mention their initiative!) that COD was able to discover resources in Limnytska block. These resources have been independently estimated to be a combined 800 bcf of gas. With hydrocarbons present and oil leaks at Well 18, there are very encouraging signs that oil play will follow.
Such a diversified asset (and with the verified drill logs of Well 18 and PG 2) make COD’s 100% interest in the Limnytska license a great proposition. Carrying a lower risk than other junior exploration companies (but with the potential for massive market cap of US$ 2 billion), COD shows definite potential for share price growth. COD can jump straight past the costly risks of discovery drilling and on to appraisal-like drilling. The potential for confirmed reserves in the Limnytska block comes at the perfect time as the majors move in. And as Ukraine rolls out investor-friendly policy to facilitate energy security and sales of gas and oil into the EU energy market, COD’s local relationships couldn’t be stronger for doing business.
East Africa, remote Australia, and now, Ukraine. That’s right, The Next Oil Rush hope you have your passport in order, as we are proud to present this opportunity to invest in Ukraine via COD.
Do you want an introduction to the stockbroker we use to manage our investment in COD? Just fill in your details, we will make an introduction and they will be in touch with you shortly.
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