Commodity Quest VD-intervju

2014-01-17 09:31

Råvaruföretaget Commodity Quest är noterat på aktietorget. Under 2013 har man hittat olja i USA. En så länge så har inte de stora investerarna fått upp ögonen för detta poteniella guldkorn. Företaget värderas idag till 174 MSEK(kurs 11,75) och insiderköpen forsätter, senast för några dagar sedan forsatte VD att köpa fler aktier. Jag tyckte det var dags för en intervju med företagets Norske VD Pål Mörch. Här blir det en blandning av svenska och engelska. VD inleder så här i sitt svar:

”Thank you for your interest in Commodity Quest. I hope you do not mind me writing this email in English. My keyboard is a US one and of course I am Norwegian, makes it easier for the both of us to keep this in English. I will try to answer your questions as good as possible. Lots of these includes disclosure of inside information, so I have to be careful.”

1. Kan du berätta lite om din bakgrund? VD-svar: I have a Bachelor of Economics degree, specializing in projects and management. I started working in the financial industry in the late 1990s, and left Norway for Sweden late 2000. I worked as an institutional broker for Fischer Partners in Stockholm, and was invited to help build a brokerage for ACH Securities in Geneva, Switzerland in 2002. I started early to focus on Energy or more specifically oil companies. The oil industry was booming in Europe, and I felt this could be the beginning of an era that would last for a very long time. The first opportunities that came to us was a few smaller oil service companies in Norway, and later Russian companies. I was attracted by the margin situation in Russia at that time, where one could by crude oil at a local market price which was 50% below BRENT, and after refining it, you could sell the finished products at world market prices. I was fortunate enough to be able to raise money for Tomsk Refining AB, and also invited to be a board member responsible for financial planning.

When I later worked with dozens of smaller oil companies, I started to understand the importance of economic planning. For most companies in our sector, it is the most important factor of your success. So after a couple of years in Stockholm, the opportunity of a poorly managed oil company arised in the form of Commodity Quest. COMQ was trying to run an oil company in Texas from their office in Stockholm. A task that will always be impossible. When I also discovered that all local management had no ownership, stock options or any other incitement for success, I decided to give this a go.

2. Kan du berätta lite om företagets bakgrund och framtid?VD-svar: Comq was established in 2010 by a group of people that wanted a platform for investments in minerals, energy and other commodity opportunities. They failed somewhat because of the complexity of being part of managements with businesses in different parts of the world. I felt that the best opportunity in their portfolio was by far Benchmark Oil & Gas. They had ownership of a mature oilfield in Texas, and had the expertise of how to run it profitably. We have now shown that we have only used this cash flow and knowledge to develop the Orange field, and also be able to make acquisitions based on our knowledge. We are in an era where we receive USD 80-100 per barrel we produce. I do not believe this will change for a long time, but It could happen. I am trying to create a company that can survive and be profitable in any oil price. We now have the platform with our assets, that should allow us to start paying out some serious dividends soon, and get some money back to Sweden.

3. Ni har hittat en hel del olja i USA, Kommer det att komma en reservuppdatering och när i sådana fall?VD-svar: A new reserve report will be made as soon as we need it. It costs us from $5000 to $40’000 to have these made, and we also need to have a production period from drilled wells, before the engineers can give them any value.

4. Hur går det med de nyborrade brunnarna och när kommer de i produktion? VD-svar: We have not done any work yet on Concord Dome since the wells were tested. We are meeting the best people in the business to make sure we use the right production equipment for each well.

5. Kan det komma ytterligare förvärv i vår/år? VD-svar:We are not seeking new opportunities at this moment.

6. Vad har ni för upptagningskostnad per fat gällande den nya oljan på Concord Dome?VD-svar: We are estimating this to be below USD 10 per barrel, but it is a bit early to tell for sure.

7. När kommer det nya borrprogrammet att börja och var?VD-svar: We will start the next drilling program on Concord Dome, we will revert with timing.

8. På en presentation på Remium i december meddelade ni att ni tror att vinsten för i år kommer att ligga på 60- 100 MSEK 2014. Stämmer det och är detta en vinst ni kan återupprepa flera år framöver? Hur räknar ni ut detta? VD-svar: If our next drilling program is successful, we can reach this.

9. Hur ser du på utvecklingen säg 3 år framåt kommer ni kunna öka vinsten och omsättningen? VD-svar: We have three fields that will all be developed. The drilling programs in front of us can prove that we can do even more drilling on our fields. We have not commented on any long term targets for our company, but as long as we see attractive margins and oil prices, we will continue to reach for higher production volumes. This will not interfere with our dividend policy. We will try to continue to keep most of the development risk with our bank.

10. Hur många fat per dag kommer ni att kunna få upp i slutet av året?Too early to tell, much higher than today:).

11. Hur kan det komma sig att ni hittat olja på en plats där det tidigare har gjorts borrningar utan lyckat resultat? Berätta gärna om det lyckade uppköpet här och bakgrunden till det. På diverse forum är det många som tycker att detta låter för bra för att vara sant. VD-svar: Concord Dome has had 18 successful wells, and a few that was drilled on the edge of the dome was dry. The whole story of this field is what attracted me to buy it. The field was more or less developed in the 60s and plugged in the 80s due to low oil prices. It is believed to have produced between 1,2 and 1,7 MBOE in total since discovered. Most wells that were plugged, was still producing good numbers, and therefore we believed that it could still hold a few hundred thousand barrels to be produced. The problem with the whole acquisition was the legal paperwork that had to be done prior to closing and development. It turned out that there had been several “crooks” that had held ownership of the field, and used a proposed development as a “carrot” to attract money and try to increases their share price. I spent the first few months to make sure we were the legal owner of all leases included in the company.

    It was only the latest owner, Hoactzin, that tried somewhat to develop it. Going through their records I found that the only thing they did over and over again was work overs and re-entries. The well structures had collapsed, but they were still trying to squeeze out some more oil. This proved to be very costly and not very successful. I had an idea of doing this completely different. The financials of drilling needed me to get 10-15 BOEPD per well to be economical. The history of the wells supported production above these levels, and when the bank agreed, we went to work on how to start off. Our geologist mapped all wells from discovery, with all the old production date and different oil bearing sands. We had our first two targets ready and another area that could prove interesting. The results has been released in the last month or so, and is showing that we hit all our targets. Our geologist was trying to find the absolute “top” of the sands for the previous wells, and did so perfectly. The testing was done in a short period of time because we have well data on 18 wells that has the exact same sands as the ones we hit. From a resistivity log, you can see the difference between oil and water, and our logs are almost the same as the ones we have from the 60s. it is not given that we will have the same production, but we are very comfortable with our press releases. When we first looked at the data from the logs we had, we believed the initial production rates could be manipulated. When we saw the first swabbing tests we did on our wells, we knew they were correct. I also felt our results were a bit too good to be true, but they are supported by 18 well files, and resistivity logs performed by Baker Hughes and Weatherford, and they do not lie. What we have found is an under-developed and under-produced salt dome. It is not many left in the US, maybe none?

12. Vilka är fördelarna med att vara ett oljebolag i USA jämför med exempelvis i Afrika?VD-svar: We bought Concord Dome in September, and started drilling late October the same yearJ Development is instant. We have access to all service providers as our neighbors. Expertise is shown to us on a daily basis by everyone around us. It is also extremely cheap to drill and operate here. Problem is of course that there are no “elephant” wells left.

13. Kommer ni att ha nytta av ert senaste förvärv i er befintliga oljeproduktion? VD-svar: We will use equipment from this location on all our fields. It should prove cost efficient for us to do so.

14. Några övriga frågor som du tycker att jag ska ha med?VD-svar: Hope this gives you some more idea of what we do. We have been able to start attracting some good private investors to buy shares, but we have a long way to go before our shares are correctly priced in the market. Most institutions are not allowed to buy shares listed on “aktietorget”, and also not companies with our low market-cap. We are working to fix both of these issues over the next 6 months:).

Sammanfattning och värdering:

Commodety Quest har lyckats hitta olja på gamla outvecklade fält till en mycket billig penning I USA. Företaget har en VD som håller i kostnaderna och som tror starkt på företagets framtid, vilket vi kan se genom alla de insiderköp som varit seaste halvåret:(http://www.aktietorget.se/InstrumentInsider.aspx?Language=2&InstrumentID=SE0000548281). Det är bra att han på ett ärligt sätt berättar om den något skumma bakgrunden i Concorde Dome. Om allt går i lås så kommer företaget kanske att börja dela ut pengar redan nästa år. Det verkar även som att Commodety Quest kommer att försöka få till en upplistning till nasdaq OMX I år!

Om företaget når en vinst om 60-100 MSEK före skatt och ca 50-80 efter skatt i år ligger värderingen på ett pe-tal på mellan 2,2- 3,5 . VD verkar tämligen säker på att man kan nå detta. Se även den pressmedelandet från december i år om produktiosprognosen här: (http://www.aktietorget.se/NewsItem.aspx?ID=67823). Det skulle inte förvåna mig om vi kan se en dubblering i kursen i år och kanske ännu bättre om de når vinster i det högre intervallet på låt oss säga 80 MSEK efter skatt i år. Detta är en något förenklad uträkning då jag inte vet vilka investeringar som krävs för att uppnå det här resultatet men med tanke på att kassan kommer att öka väsentligt så tror jag inte att jag är helt fel ute. Lycka till!