December 12, 2007
MegaWest Energy announced an independent assessment of its heavy oil and oil sand prospects in the United States. The press release said that the company,
“Announced that GLJ Petroleum Consultants (“GLJ”), has completed an independent engineering report of the reserves and resources associated with certain of its key projects. The combined GLJ and Management high estimate of combined recoverable Reserves, Contingent Resource and Prospective Resource is 332 million barrels out of a high estimate of Gross Original Resource (OOIP) of over 2 Billion barrels.”
I will be meeting with George Stapleton and Bill Thornton in New York this week and plan to put out a report on the company. The strong features of this story are the US locales and the very strong Canadian management team led by George Stapleton and Bill Thornton.
An independent analyst wrote me last night with this assessment.
“New resource estimates. Looks like 210 mil barrels recoverable in the study, and up to 332 mil barrels total when including land not in the study. Using $1 per recoverable barrel, the stock could be worth $5.25 to $8.30.”
I have yet to complete my due diligence, but I shall meet with management this week. The great advantage of the company is the fact that its resources are in Kentucky, Missouri, Kansas, Texas and Montana. It has a team experienced in heavy oil and oil sands. Both COO Thornton and President &CEO Stapleton II (a Georgia Tech Alum– but I will not hold that against him) are experts in these fields. There is significant infrastructure in the US for processing heavy oil and significant demand for that product. Refineries exist which means that building of multi-billion $ heavy oil upgraders is likely not required by MegaWest. Please see the press release on MegaWest Energy. I will publish again soon on MGWSF (OTC BB).
I firmly believe that US heavy oil and oil sands deposits, of which there are many, will become extremely valuable in the future. This is a Discovery Investment that will require some patience as the world and the US turns to developing US domestic resources. I own shares in MGWSF.