We spoke this week with analyst Warren Verbonac on the subject of Canadian E&P. One of the places that Canadian investors are looking right now is towards South America, and particularly towards a company called Petrolifera:
Mr. Verbonac: Petrolifera is in South America. It has a good base in Argentina, which, depending upon their volumes this year, could produce up to about $75 million of cash flow, but they will be diverting their next exploration efforts primarily to Peru and Colombia. They have some very large-sized targets, particularly in Peru. Peru is a good operating area. It hasn’t had much exploration for decades. There is one big gas target and one big oil target. We will see the drilling results in about a year. In Colombia, we will find out his summer what the drill results of their first location looks like, but it was a highly contested block that they were able to win. There is a lot of production in the area. Some gas wells have tested as much as 100 million cubic feet a day in the area. Even though gas might only be about $3 an Mcf, at those kinds of volumes you can still make very good money.
For the full interview with Mr. Verbonac, including an overview of conditions in E&P and more stock picks, click here.
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