Investorideas.com - Featured Special Oil and Gas Stock Report; American Petro-hunter Inc (OTCBB: AAPH), written by Grass Roots Research and Distribution, Inc.
“We expect significant growth potential from AAPH’s prolific oil and gas projects in Oklahoma and Kansas in the immediate to medium term”- Grass Roots Research and Distribution, Inc.
Point Roberts, WA –October 22, 2010 The Investorideas.com Energy Newswire and www.OilandGasStocksNews.com publish the following Oil and Gas stock report on American Petro-hunter Inc (OTCBB: AAPH), written by Grass Roots Research and Distribution, Inc.
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Full report at www.grassrootsrd.com and http://www.investorideas.com/CO/AAPH/Cohen_AAPH_report_100510.pdf
INVESTMENT THESIS & RECOMMENDATION; Written by Grass Roots Research and Distribution, Inc.
American Petro-Hunter, Inc. (OTCBB: AAPH) is a rapidly growing, expertly managed exploration and production (E&P) company. The Company intends to become an intermediate level oil and gas producer within the next 12 months. AAPH’s business strategy is based on acquiring and developing high quality projects with existing and expansion potential. The Company is currently focused on expanding its acreages/ leases at its North Oklahoma Project and building a strong, balanced and diversified portfolio of oil and gas assets. American Petro is revenue positive and is in production at its Poston Project.
American Petro-Hunter intends to become a 500-1000 BOE producer in the next 12-36 months by aggressively developing its Poston and North Oklahoma Oil Project as well as continuing to engage in exploratory drilling opportunities on its Colby Prospect and Sacramento Gas Prospect. The Company further intends to expand its acreages across North America.
Key corporate value drivers include: discovery of a new oil field, existing production capabilities, a balanced portfolio of assets, favorable industry economics, recent funding arrangement and a strong management team. Providing the Company raises approximately $5.0 million of total capital, we forecast significant top line growth. Revenues are expected to grow from $0.5 million FYE December 31, 2010 to more than $11.8 million by FYE 2014. AAPH is potentially a lucrative investment opportunity in the oil and gas E&P space and provides an upside potential of 191.3% in the short term and long term.
COMPANY VALUE PROPOSITION
Balanced Portfolio of Assets
-Company’s projects are located in areas which are highly prolific and produce large quantities of oil and gas.
-The Company’s proposed projects will explore and develop oil & gas, from conventional resources primarily in United States and Canada.
Favorable Industry Economics
-Demand for oil & gas is likely to grow significantly driven by demand from developing nations
-Existing infrastructure makes it easier for the Company to market its products.
Use of Modern Technology
-Using modern technology in the exploration and production activities will help the Company improve productivity and profitability.
Strong Management Team
-AAPH has consistently built a team of geologists and executives who are experts in this field.
-Management equipped with ability to drive growth and rapidly evolve the Company.
“American Petro-Hunter is building a strong, balanced and diversified portfolio of oil and gas assets that will result in significant reserve growth, production revenue and value for shareholders. The Company is well positioned to benefit from a current strong increase in oil prices. AAPH will need to raise the necessary initial capital to initiate drilling activities and expand its property base. As previously mentioned, the Company plans to invest up to $5.0 million in the next 24-months for exploration and development of its projects. The recent funding of $1.5 million from Maxum Overseas Funds shall enable AAPH to continue the development of its oil and gas projects, specifically in the near term in Kansas and the North Oklahoma Project, land leasing and for general administration going forward. We expect long term upside revenue opportunities from the Company’s portfolio of assets, highly scalable business model, and new acquisition deals as oil and gas prices continue to rise. American Petro-Hunter is an exciting oil and gas exploration and production company providing significant short term and long term investment opportunity for risk-averse investors.”
COMPANY PROJECT DESCRIPTION
The Company has a diversified and balanced a portfolio of assets with two production and one field development properties in Kansas, seven oil projects in Oklahoma and one gas prospect in California. American Petro-Hunter’s Poston Project, Trego County, Kansas is already in-production. The Company has also recently initiated production at one of its seven leases in North Oklahoma. Other prospects include: Colby Prospect, Thomas County, Kansas; and Sacramento Gas Prospect, Central Valley, California.
North Oklahoma Oil Project, Oklahoma2
American Petro Hunter has acquired a working interest in an exciting oil play located in the northern part of the state. The Project targets regional shale formations rich in oil. Currently, the Company is drilling shallow, vertical wells with future plans to exploit the shale productive horizon with horizontal drilling. Individual wells at the analogous Bakken formation in North Dakota are producing over 2,000 barrels per day from staged fracture stimulation programs.
The North Oklahoma Project pursues production of high gravity light oil above 3800 feet with estimated oil production in the 150 to 550 BPD range as anticipated Initial Production Rates.
NOJ26 is a 4000 foot vertical well targeting multiple objectives including our 48 foot shale target plus both the Simpson and Wilcox formations one of the most prolific producers in Payne County Nearby existing analog production has produced a cumulative 80,000 barrels of oil per well with 7 years of commercial activity to date. Wilcox wells often deliver initial production rates in excess of 100-120 BOPD with 200 MCF of gas. Multiple objectives minimize risk given the three potentially productive horizons. No. 1 well returned rates in the 75-85 BPD rates on acidization and a similar technique may prove to be the most cost effective path to R.O.I and payback. Fracture stimulation at a later date may be indicated. NOJ26 is anticipated as a 200 plus BPD producer. A horizontal well drilled laterally down and along the Woodford shale will expose over 1,500 feet of rock that upon stimulation should produce large quantities of oil. Engineering estimates of the potential of a successful horizontal well at the North Oklahoma Project could be 500 BPD per well. The oil from the Woodford shale is light, high quality crude and we have big plans in the future for more horizontals. The southern part of our lease block has room to drill up to 5 horizontals in the shale and also up to 25 conventional vertical wells if our program successfully finds oil from previously identified and prolific formations such as the Simpson and Wilcox.
Grass Roots Research and Distribution, Inc. CONCLUSION:
“….We expect significant growth potential from AAPH’s prolific oil and gas projects in Oklahoma and Kansas in the immediate to medium term. The prospects of the Company have further brightened after it went in-production at its core acreage at the Northern Oklahoma Project and the Rooney Prospect. This will expedite revenue growth and increase free cash flows, thus providing the capital expansion and commercialization of its other projects. Revenues are expected to grow from $0.5 million for Fiscal Year End (FYE) December 31, 2010 to more than $11.8 million by FYE 2014. Note: our projections assume that the Company will be able to achieve our forecasted targets provided it raises a total of $5.0 million funding.
The quality of the portfolio’s assets is excellent. We believe this quality together with the experience and proven track record of its management team will enable enhanced returns on investment. The Company intends to become an intermediate level oil and gas producer. It will achieve this level as a producer by acquiring and developing high quality projects with existing production and expansion potential. In addition it will possess defined-risk developmental and exploratory drilling opportunities. American Petro-Hunter provides an exciting short term and long term investment opportunity.”
To read full article please check out www.grassrootsrd.com and http://www.investorideas.com/CO/AAPH/Cohen_AAPH_report_100510.pdf
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