Thursday, December 10, 2015
Madalena Energy in the right spot at the right time
Madalena Energy is the only small independent with positions in key unconventional Argentinean resources; it is debt-free, generates substantial operational cash flow and has a rapidly increasing production and resource.
Madalena is focused on drilling four strategic resource plays in 2015 and 2016, and has been described as a ‘sleeper’ that awakened earlier this year with successful horizontal test results on the Loma Montosa oil resource play at Puesto Morales.
The YPF/Chevron discovery of a ‘super well’ in the Vaca Muerta—offsetting Madalena’s own assets—is the season finale for this success story. It’s the story of a junior that is sitting on a significant portion of Argentina’s recoverable shale resources—possibly three times the amount of all of Texas’ resources. And while Shell’s move to phase two and its 35-year drilling commitment secured Madalena’s position as the most wanted junior in the world and the only way to gain real exposure to the next shale boom, the ‘super well’ right next to it will be the jackpot.
You will note the part of the article that I have bolded. Madalena may be sitting on three times the amount of total oil resources of the entire state of Texas. What is that worth once these properties are de-risked and the oil price turns around? I am super bullish on this company.