Quantcast

Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Meeting with George Langdon - Shoal Point Energy (SHP -CNSX)

Note - This was originally posted in the Paid Content section of www.bigpicturespeculator.com

I'll spare you the jargon (tectonic thickening, imbricate thrusts, and the observation that detachment zones are often "greased" by generative source rocks) that occasionally comes up when geologists chat. I met with Shoal Point's President, George Langdon this afternoon. He doesn't need to apologize for being a technical expert. However, on the corporate side, Shoal Point has had its challenges. They've struggled with high drilling costs, an onerous regulator, a lack of time, money and bodies. 


On the geological side, this story is very very big. It reminds me of the giant gas explorer Exxel Energy in the Columbia River Basin. I got killed on that deal (more than once). The bankruptcy of Delta Petroleum puts a tombstone on the possibility natural gas flowing out of the Columbia River Basin any time soon. However Husky still maintains a land position and the basin could easily be revived in a high natural gas price cycle (tell your grandkids about it just in case).

Shoal Point recently acquired a 100-per-cent working interest in all rights in NWest Energy Corp's (NWN.V) EL 1079R block, comprising approximately 500,000 acres, north of and contiguous with Shoal Point's EL 1120 and EL 1070 blocks.  

The market yawned... but don't forget that NWest Energy evaluated the unconventional resource potential of these licences. AJM Petroleum Consultants determined a Best Estimate of the Undiscovered Petroleum Initially-in-Place Resource of 18.8 billion barrels. 

Nobody cares about billions of in place barrels today. The market wants to see a flow rate out of the 3K39z well before getting too excited. However, if Shoal can document a nice flow rate, the company will be off to the races.

The Green Point shales can probably be drilled and fracked vertically, which should simplify operations down the road. However "fracking" could become just one of several regulatory sticking points that will need to be overcome. 

For now, I am holding on for results that could see the share price pop out of the current "trough of disillusionment".

I own SHP shares and they are an advertiser.