Leni Gas & Oil (LON: LGO)
It’s been one hell of a roller-coaster for Leni Gas & Oil share-holders these past few years. So with that in mind I set about interviewing the Big Man himself, Mr Marmite David Lenigas. He got the BMD third degree treatment yesterday. I swore at him, he swore at me. It was a no holds barred full warts and all debate as to the way forward for LGO. Lenigas can take criticism in a way that speaks volumes about this mans genuine concern for doing what’s best for share-holders. Investors/traders all forget that DL is a human being, he’s a family man with 3 children. He’s a dad! (Hard to believe) and as such some of the criticisms over the years must have hurt him, hence his armour plated responses; we’ve all heard him say he “couldn’t give a rats’ clacker” but the truth is that DL really “does give a rats clacker” He is committed to bringing share-holders huge returns. That is a fact that Trinidad will prove. Leni Gas & Oil are shooting for the stars. It really is game on here!
The Big Man concedes that he & Neil Ritson, the unsung hero of the recent Trinidad success, have been ultra conservative on the potential of Goudron wells. Not wishing to be accused of being ‘over zealous’. He did tell me 12 months ago that Trinidad was a company maker.
The first Well of a 30 well campaign, Well GY-664 is now on ‘restricted’ production at 240 bopd while Well GY-665 is drilling ahead and will be in time & more importantly for LGO on budget. That leaves 28.5 wells to go. Smart money should be looking to the 3rd GY-Well 666. The prospect of another 28 wells pumping out 100 bopd each let alone 200/300 barrels is truly mouth-watering. I can exclusively reveal that the success at Goudron now means that LGO production is by my estimation and Petrotrins’ oil export pipeline to the Pointe-a-Pierre refinery in western Trinidad, way ahead of where we think it is. Lenigas refused to confirm or deny that production was somewhere between 600-800 barrels per day. The man from Petrotrin (He say’yes’) was on site this week with the key to switch production into the islands infrastructure. A point worth remembering here. Infrastructure is already in place. LGO Goudron oil takes 24 hours to get to refinery. Just like the oil, cash is now flowing into the company. It’s set to be a bonanza.
Where investors may be missing the point is that to all intents and purposes Goudron is in actual fact a virgin oil field with 3P STOIIP of 350,000,000 barrels and 2P of 122,000,000 barrels, the company estimate that only 4,000,000 barrels have been recovered since the 1920’s. The reason for this was that all previous work was incorrectly done. Technology has moved on a long way in the last 50 years since Goudron was drilled. I repeat; “The company estimate that only 4,000,000 barrels have been recovered since the 1920’s. The reason for this was that all previous work was incorrectly done.” This is such an important pointer.
What was LGO going to do with the 70 odd pump jacks that are known to be on site, bearing in mind that this is only primary recovery on well GY-665 which is under pressure and they have permits for 30 wells? The obvious answer is that LGO are either planning further Trinidadian acquisition’s, going for more Goudron well permits or both. What about if Range Resources came a knocking selling their wares? “No chance, no association with them we don’t need or want them” That means one thing. 30 wells are not enough to get the oil out fast enough. There’s going to be more permitted. LGO will have no problems as their relationship with the Trinidadian authorities is first class. They’re bending over backwards to help them. 85% of Trinidad hydrocarbons are natural gas. BP, the Chinese and the USA all have massive offshore projects. The big boys are already there.
I asked Lenigas a series of leading questions; if he’d sell LGO for the right price, if they’d been approached for farm-ins, takeover talks etc. Not a peep from the Big Man whose usual glossomania became muted. Of course in the Lenigas world, Western Canadian Coal, Lonthro, Cambrian Mining and BDI Mining have all been taken out. So it’s “fair dinkum” to expect that should Trinidadian success continue (there’s no reason to believe it will not) then a predator could start to nibble. Especially if the success at Goudron continues at their Cedros Peninsular leases which are getting LGO people hot under the collar. Cedros is backed up by Venezuelan data and geology which is far superior to Trinidadian geo! They could have a double hit.
The LGO Trinidad venture is turning into a great roller coaster ride. Lenigas & Ritson are two men who know how to get their projects fully funded. “You can’t use bottle-tops Dan!” They have the end vision clearly in sight. The report from their petrophysical consultants is that Well GY-665 (2nd Goudron drill) has intersected a net oil pay in the Goudron sands of 270 feet in the interval 590 to 1,440 feet measured depth. It’s nailed on that that it’s going to flow more oil. My last questions were where do you see the sp & LGO in 18 months.? “We’ll be drilling well past the 30 Goudron permitted wells and active in Cedros”. The Big Mans’ Midas touch has returned!
This isn’t a question of finding the oil it’s already been found. All 350,000,000 million barrels. Fill your boots! 10p will seem cheap this time next year!