This New Zealand Exploration Portfolio is at a timely bottom.
Blockchain technology may finance new drilling projects in the next stage of development.
What this post is about:
How exploration works. Finding answers to unanswered questions.
What it is. Pioneering work operating in unknown unknowns with hope of economic value discovery.
Why it matters. All real material prosperity is made from making things out of other things and the lego block of chemistry is oil molecules that creates most value in our world.
How you benefit from reading this info. You get early timely info you can research yourself and take action on to prosper.
Taking action is the just getting started now, to benefit your future by intelligent decision making today.
Background
Seismic is geophysical science that takes a attribute of how a sound wave penetrates a rock and reflects back at different rates of speed based on the rock properties. Oil, Natural gas, Water all give off different seismic signatures.
In 2005 a major energy discovery was found on the North Island in close proximity to a Volcano.
When volcanoes form large cracks occur from fast cooling rocks nearer to surface of earth.
These large cracks create voids for hydrocarbon molecules to migrate into over time. It was these large cracks that have become both a challenge and a paradox of opportunity. They present huge drilling challenges, yet collect vast amounts of oil under pressure.
The deeper the deposit, the higher the pressure, the high pressure = higher flow rates, and rates per day = cash flow.
It takes about 7 years for an exploration operation to become economic and run on its own production manage its budget like a start-up. We are in the sweet spot of crossing from red to black on the balance sheet. Any new added wells, any new oil price increases could set up.
It's gets complex, as explained here https://seekingalpha.com/instablog/3957081-tullii/2884523-putting-value-on-new-zealand-plays-is-a-black-swan-science
There are 3 projects worth highlighting; Symbols; NZ, EW, TAO in Canada (TMXmoney.com)
The first NZ has fallen from +$2 to $0.02, the risk to the downside has diminished from the early days.
The company has a water handling facility that is highly lucrative from a market positioning facility.
As any new entrants would have to use their facility to pay for disposal of water. Link https://seekingalpha.com/instablog/3957081-tullii/1953422-waihapa-acquisition-new-zealand-energy-oct-14-2013
The second EW is around $0.11, it has a small footprint in new zealand, but recently drilled a success with partner TAO.
It has a bigger story happening n Romania and may have a model to cash in between the 2 projects in 2 countries.
https://seekingalpha.com/symbol/EWPMF
The third TAO is around $0.52 is a company with a great track record of drilling hits. Its taking a kicking with declining oil prices but it has the reserves, and more importantly the know how technically and operationally to do this development over and over. https://seekingalpha.com/news/3288994-tag-oil-reports-q1-results
When you buy anything its the price you pay that determines the profit you make, the lower of the cycle you time your buy, the better your % return is when the cycle naturally reverse to the cycle top. Alot of money was raised, risked and spent in the ground. In some cases at 100X, 20X ,10, the price of where its at now. This is the nearest to bottom of a timing cycle and i can't pick the bottom but this is very close and with a 2-3 year horizon you could see very high % gains due to situations in Asia and the USA that are creating a set-up for very large differentials in prices for energy from where we are today.
So now we have Texas flooding, a major blow to producer pricing, and barrels with not flow into refineries, this will cause unsold oil to drop the price of oil lower. This is the cycle low of a lifetime, and propositional bets that have assets in the ground with lots of perception change in a low price environment is the timing you want to be a buyer at the bottom.
Financing new wells may employ crytpo finance to get new drilling projects financed as credit in the energy business is at a all time low and new ideas like blockchain could make a big difference in doing so.