MHL - Monitor Energy

YOUNG_TRADER said:

MHL​

Mkt Structure

Shares
635m


Mkt Cap @3c = $19m Current
Mkt Cap @4c = $25m
Mkt Cap @5c = $32m Target 1 if CIG hit Oil on adjacent lease
Mkt Cap @6c = $38m
Mkt Cap @7c = $45m Target 2 if a major like Santos or Chineses National Oil farm in



Cash $2m

Ascent Capital
To begin with MHL is an Ascent Capital re-cap, however I always viewed it as the one that never made it,

When you consider their other re-caps, EXT 2c -15c, DYL 2c-65c, BLR 2c-25c, WMT 2c-30c, even MKY 2c-9c, thus MHL's 2c- 4c seems an anomoly, I would think its the last decent Ascent Capital re cap left to run.

So given their track record and the fact that you see the Steinpris name (Ascent Capital) still on the share registry suggests that more is still to come, in addition to this Ascent Capital control 50% of the Uranium projects and so this all makes for a very interesting mix.

Management
Oil and Gas The 2 main men are Scott Spencer and Ted Ellyard, both are the ex creators/architects of Hardman Resources, they took HDR from "a market cap of less than $5m in 1994 to eventually over $1.5 BILLION"

Thus these two oil boys know what they're doing and as such MHL has been viewed by some such as Peter Strachan of Sotck Analysis as Ted Ellyards next oil and gas venture.

Uranium
The Uranium project is being managed by Leopard

Leopard is an unlisted private company thats owned and controlled by Ascent Capital, its technical guys are James Pratt who is the Managing Director of Deep Yellow Ltd (DYL) and Dr Joe Drake-Brockman who is in charge of technical explorationa and development for DYL.

So effictively Leopard is a mini DYL, created by the creators of DYL and managed and run by the current DYL top boys who have taken DYL from $5m to over $500m.




Projects

Kyrgyz Oil Oil and Gas, 100%, Kyrgyzstan
Surrounded by many prolific oil and gas producing basins which have produced probably a few BILLION BARRELS OF OIL and a few Trillion Feet of Gas, reserves are still a few Billion Barrels of Oil and a couple of Trillion feet of Gas.

The obvious comparison is as Warrick Grigor has done, to that of Caspian Oil and Gas (CIG),
"Three years ago we spent a week in the Kyrgyz Republic, coming to grips with a junior oil stock named Afminex (it subsequently changed its name to
Caspian Oil and Gas). Back then, the shares were less than 1.8 ¢, the company had precious little cash, the market capitalisation was $8m and the oil price was only US$30-35/bbl.

Since then it has raised more than $20m, it has signed a joint venture with Santos and, independent of that JV, it is preparing to drill a number of shallow targets. CIG’s market capitalisation is approximately $170m
with the share price at 16.5 ¢. Our clients have done very well out of CIG, irrespective of whether or not they hit big oil in the forthcoming program."

So CIG's Mkt Cap has gone from $8m to $170m yielding a return of 2125% over 3 yrs, however over the last 5 months the stock has yielded over 300% (5.5c - 16.5c)

Given CIG's current Mkt Cap of $170m I would expect MHL to move up to 5c =$32m if CIG hit oil, moreover if MHL, which is in the final stages of negotiating a farm out, gets someone like Santos, or even the Chinese National Oil Corp I would expect a re-rating towards 7c = $45m.

There is not too much info on target size or potential of MHL's Oil and Gas licences however the company is in the final stages of interpreting and reprocessing data to determine drill targets, priority survey area's etc etc in addition to this further survey results are due back,

So to summarise there are 3 potential catalysts fora re-rating of MHL because of its oil and gas leases

1. CIG striking oil
2. A farm in partner such as Santos or Chinese National Oil Corp
3. Siesmic/survey updates with target/potential size of oil targets



Kyrgyz Uranium Uranium, 50%, Kyrgyzstan,

Intial target 600k-700kt's@0.1% U = 1.5Mlb's U

This is just an intial target, base don historic work/drilling by the soviets, mineralisation is reported at surface and up to depths of 150m's over a strike of 800m's, they "mineralised seam widths" vary form 4.2m's to 6.6m's and avg 0.03% - 0.4% U

Its early days here but given the current mkt cap of other companies operating in Kyrgyz such as MRO mkt cap $50m and NMR mkt cap $100m there is plenty of upside value for MHL once a JORC is released I would expect $20m of attributable value = 3c

As stated the Uranium project is being managed by Leopard

Leopard is an unlisted private company thats owned and controlled by Ascent Capital, its technical guys are James Pratt who is the Managing Director of Deep Yellow Ltd (DYL) and Dr Joe Drake-Brockman who is in charge of technical explorationa and development for DYL.

So effictively Leopard is a mini DYL, created by the creators of DYL and managed and run by the current DYL top boys who have taken DYL from $5m to over $500m.




Summary

- Chart wise support seems to be 3.2c and then 2.6c, however I doubt we will see it fall below 3c

- Its is a direct comparison to CIG, even Grigor is getting his clients who he got on to CIG very early days on to this, moreover any drilling success for CIG will boost MHL's prospectivity and thus SP

- A farm in deal for MHL's oil and gas licences is in the final stages, if its Santos or Chinese Oil watch out!

- The Oil managment is excellent being ex HDR architects who took the company from $5m to over $1.5Billion

- The Uranium management via Leopard is also excellent as its all the DYL boys who took DYL from $5m to $500m

- So given it is being run by the people he created so much value for HDR and DYL, as well as the fact that it can be compared to CIG for oil and MRO/NMR for the Uranium MHL seems cheap!

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Posted Monday 10/09/07 08:44am
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Hi All,

Some light reading while we wait for information.

While doing additional research on MANAS PETROLEUM CORP (OTC BB:MNAP), a company I hold in the US, I came across the information below that just adds to the information we already have on the Oil & Gas potential in Kyrgyz for MHL.

BTW Santos is MANAS PETROLEUM JV partner in Kyrgyz.

Also...Dr Alexander Becker, Manas CEO, background:

Dr Becker was a Director of Afminex Ltd which split into two companies, Caspian Oil & Gas Limited and Perseus Mining Limited. He was a Director of both those companies and later resigned but remained as a consultant to the two companies.

He was named the Kyrgyz Republic’s top mapping geologist 20 years ago, when the Soviets were identifying the locations of the area’s yet-to-be-tested deep oil structures. He knows the area intimately, and even America’s top experts agree with him regarding these structures potential.

Cheers,
Brantley

http://www.undiscoveredequities.com/member...tock_picks.html

This is our introductory Manas Petroleum report and as a consequence it is the most comprehensive.

We first started looking at Manas Petroleum last winter as it began its move from $3 to $6.40. It was brought to our attention via Clarion Finanz, who are major Manas Investors and are InterOil's original financial backers.

We were impressed with Manas management's resume and its apparent ability to acquire giant projects through-out the former Soviet Union but later worried (correctly) that its shares may have, despite its great promise, moved too far too fast. Since then its shares have first corrected along with the market and we note that market has ignored some highly significant accomplishments in Central Asia and Eastern Europe, something we will talk about later.

The company's CEO Dr Alexander Becker was one of the Soviet's top (award winning) geologists and the company has obvious connections to numerous powerful oilmen including until his recent death (from cancer) Farman Salmanov who is considered the father of the Soviet oil industry (for example he headed the committee that awarded ExxonMobil its Sakhalin I project.)

But connections are one thing and acquiring giant developable oil leases are quite another. When we started watching Manas it already had a major developing its Kyrgyz Republic project which was impressive but we wondered if it was a one off event. Can they keep doing it? Clearly the more of these giant oil projects they can acquire (and get development paid for by Major oil companies) � the better chance they will have, that at least one will be highly successful - translating to giant profits for us.

Our plan was to wait and let them prove themselves first. With the latest two deals and the time-line of events we judge that from now on the longer we wait the higher Manas Petroleum's share price is likely to be. We were lucky that our wait and see strategy coincided with a very significant stock market correction, creating what we think is a huge buying opportunity.

In the past months, a parade of CEO's from the world's largest oil companies has warned that it is getting extremely difficult to acquire giant sized, exploration and development plays.

ConocoPhilips Chief Executive Jim Mulva was among the more recent to say this when in July he told the U.S. Chamber of Commerce most of the world's oil is controlled by exporting nations. [So] there is a great deal of international competition for opportunities to develop what's left� What's left is mostly Canada's tar sands and ultra-deep and expensive Gulf of Mexico exploration. Witness the bidding frenzy in the Gulf of Mexico or the amount being paid to acquire tracts in Canada's tar sands. Both require investments north of $30,000 per flowing barrel and offer very low returns. In the words of Rigzone a highly respected oil industry publication regarding the Gulf's latest wave of exploration and development: oil companies are going to have to travel down a long expensive path.

But in places like Central Asia the capital required is a fraction of this amount and it can be paid back fast: in months instead of years. But you have to have access to those oil lands - a very rare thing. If a company does however, it can quickly go from being a small company to become a giant company. After studying its activities carefully for the past eight months it is apparent that Manas Petroleum is capable of (and has been) acquiring giant assets and as a consequence is more than likely to make us huge profits.

The facts are as follows:

Fact #1

Kyrgyz is a P50 1.2 billion barrel project. Its original project in Kyrgyz Republic has (according to an independent engineering study) a most likely case of P50 1.2 billion barrels based on 10 of 23 reservoir structures already discovered.

Santos, Australia's third largest energy company is spending $54 million to bring it to a commercial level of production. Until this occurs Manas Petroleum's expenses are paid by Santos for the entire $54 million program. Manas ends up with 25% of the oil production and only when it is judged to flow at economic levels does Manas begin paying development capital costs on a pro-rata basis.

We note that last month China agreed to fund gas and oil pipelines which pass either near or through Kyrgyz capital city Bishkek on their way to the Turkmenistan and North Caspian with the intent of eventually importing from the region more that 1 million barrels of oil per day and a trillion cubic feet of gas annually as the areas energy reserves are developed.

The Chinese know what they are doing. Central Asia is one of the world's last relatively low cost energy growth frontiers. Manas already has oil giant CNOOC spending almost a quarter of a billion dollars on drilling oil wells next to its Nanai concession.

...........

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Brantley

Posted Monday 10/09/07 08:51am
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FYI....

Some additional reading material on the Oil & Gas potential in the Kyrgyz Republic....

Cheers,
Brantley

http://www.equityresearch.li/portfolio.php#19

See the section on:

Manas Petroleum Corp. (OTCBB: MNAP)

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prawn_86 said:

out of curiosity YT or others,

when you say 'final stages' of negotiations, what exactly does that mean? especially with chinese co's as they are notorious for not sticking to deadlines, it could still be a couple months until an announcement is made. am i right in this assumption?

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YOUNG_TRADER said:

Prawn, it would appear that the company has been in negotiations for awhile, expecially given the progree CIG has been making, so for the company to say they are in the "final stages" I would assume that a result could be expected soon.

But thats just my opinion, for confirmation, why not call the company and see what they have to say?

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