Sign up USA
Proactive Investors - Run By Investors For Investors

Pulse Oil eyeing massive upside potential at Bigoray, broker says

The miscible flood project requires just an estimated C$3.0mln of investment per Nisku Reef "providing massive upside without the risk and significant cost of an extensive horizontal drilling program", Mackie Research said
Onshore oil rig
Mackie's valuation model assumed a recovery factor of 60%; Pulse is targeting 80%

Pulse Oil Corp (CVE:PUL) completed on Thursday its previously announced transactions that consolidate its interests in the Bigoray area of Alberta.

The transactions secure Pulse's interest in two strategic Nisku oil pools.

The company said the assets acquired provide substantial upside to Pulse through the addition of new reserves and the restarting of existing behind-pipe production.

Pulse will now have the opportunity to implement a low-risk enhanced oil recovery (EOR) project to increase recovery factors of the petroleum initially in place (PIIP) from roughly 35% presently and potentially up to 80%.

READ Pulse Oil shares up as it consolidates position at exciting Bigoray assets

In addition, the production history of these discoveries and some 50 others in the near vicinity have provided Pulse's technical team with an insight into how enhanced oil recovery procedures have resulted in an average recovery factor of 80%.

"Operationally speaking, we are excited to take control of these neglected assets at Bigoray. Our first step will be to immediately bring back on production that was shut in three years ago during historical low commodity prices,” revealed Drew Cadenhead, Pulse's president and chief operating officer.

“ As a proven low-cost operator with no debt, Pulse's team is ready to implement the same operational acumen we demonstrated in our previous successes; this is what we do: capture strategic assets, unlock the bigger picture upside and increase value for shareholders,” Cadenhead declared.

“By bringing on immediate cash flow from the restarting of existing behind-pipe production, we can begin to fund our EOR plan in the Nisku D and E pools, a low-risk operation with tremendous upside for a company our size," he added.

Mackie Research reiterated its 'speculative buy' rating and 50 cent target price on the news.

Mackie's valuation model assumed a recovery factor of 60%, which translates into about 6.5mln barrels of oil equivalent, which on a conservative basis it values at C$65mln, or 74 cents a share.

If Pulse cranks the recovery rate up to 80%, Mackie sees upside value potential of C$177mln, equivalent to C$2.01 a share.

“As most of the required infrastructure is in place (now 100% owned by Pulse), the miscible flood project requires an estimated $3.0 million of investment per Nisku Reef providing massive upside without the risk and significant cost of an extensive horizontal drilling program,” the broker said.

Shares in Pulse currently trade at C$0.17.  

--- adds broker comment ---


View full PUL profile View Profile

Pulse Oil Corp Timeline

Related Articles

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
Gas valves
April 20 2018
The oil and gas producer said it believes the additional work will allow access to twice as many “pay zones” as well as shortening the time-frame to commercial gas production
Pulse Oil President Drew Cadenhead and Pulse Oil CEO Garth Johnson
May 08 2018
Investors see future windfall as the firm employs modern oil recovery methods to try to unlock oil trapped in two Nisku reefs in Bigoray.

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 ©, 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. Terms of use