Categories: Energy
Topics: General Energy

Monumental Energy (TSX-V: MNRG)(OTC: MNMRF) CEO Max Sali on Going Three for Three on Oil Drilling Including the Most Recent Ngaere-2 Well

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today once again is the CEO of Monumental Energy (TSX-V: MNRG)(OTC: MNMRF), Mr. Max Sali. Max, good to have you back on. Brent is right around the 119 level. You put out another piece of great news here. But congrats, first off, getting three wells. Hitting on three wells back to back to back isn't the most common of things.

Can you provide some context on the most recent release here?

Max Sali: We had three wells in a row using perforation guns all become extremely successful. These were low-cost wells targeting what's called the Mount Messenger formation. It's the pretty much closest-to-surface formation, so it's not very difficult to get us to get these complete. We banged three of them off I think in a five, six-week period. The first well, Ngaere-1, was amazing. I think post-production on all three wells, for whatever reason, the number is 3,000 barrels. However that works, I'm not super technical, but that just happens to be the number. And they're unstimulated, which means after the perf gun we didn't do anything else to them. There's no artificial lift. There's no hot water flooding. It's just that's what they're doing. And the first one was very successful. The unstimulated rate I think was 568 barrels. The latest one was 300 barrels.

And our problem right now is, if you see in our last press release, we could be doing 1,000 barrels a day, but it's just trucking constraints and capacity. How we're solving that issue is, one, we are trying to find additional trucks. We may consider leasing our own tanker truck. There's three now. Maybe get a fourth. Sometimes we have a fourth, depending on if a private company's using it that day. And then at the Waihapa production facility, they're working to upgrade the lining on a 5,000-barrel container onsite. The station can hold 15,000 barrels. They're getting there. But things have happened so quickly in the last six weeks. It's simply finding personnel to do that. But obviously with the price of Brent being where it is, fluctuates whatever the spot price is today. But I think we received last week for oil, $107-ish USD a barrel, and all of our input costs are in New Zealand.

Our net backs were, I would say, $60-plus USD. $65 to $70 USD depending on the well. But that's an amazing number. That's one of the highest besides obviously Saudi Arabia. But it's been an amazing thing. We have a fourth well, Ngaere-3, within a kilometer of this one that we just finished off that will start in about two weeks.

It's been great to see the success because obviously no one likes failure, and it's working out. And I've had a lot of good feedback from a lot of shareholders who averaged down over the last year. And it's been working out really, really well. And the volume, I think we've traded about 50 million shares and not one penny spent on promotion. Simply just right timing, right place, good results. And as you know, timing is everything depending on the business you're in.

Gerardo Del Real: No, look, better lucky than good sometimes. And if you can have a little bit of both, that's a recipe for success. Congrats to shareholders that had the patience and the wherewithal to stick it out and average down or hold because they clearly have done well.

What comes next?

Max Sali: We have Ngaere-3 which should start in about two weeks. There's another six wells in the pipeline. We have applications submitted for fresh oil and gas wells. Essentially, we're extending acreage for new permitted land that the government will grant us. Once they give us the grant, we're ready to go. We're looking at a rig. There's one rig that we use for copper milking in the summer. One of those wells is still doing very, very well.

Between the three companies, the operator, ourselves, and L&M, we're looking at what we can do to maintain control of that rig. It's not being used right now. We don't need it for perforation wells. But for the new fresh wells, we will, and so how do we bulk up fast in the good oil price? I think everyone's working as quickly as we can because there's no room for time off right now. When the price of oil is great, business is great. And the difference, and you and I have talked about this before, is you drill a good hole in mining, and, great, maybe in 10 years you'll be in production. We do a perforation, and that day it's getting sent to the port. The revenue's immediate.

Gerardo Del Real: Well, look, it's definitely one of the quickest paybacks in any commodity that you'll get. And again, there's a whole heck of a lot that goes into being able to step into a scenario like this. You happen to have done it, and it seems like you have targets and prospects that you're evaluating to expand the scope of the luck or the technical expertise that you've been able to deploy.

Max Sali: You know what? That's correct. The New Zealand government, we met with the minister last week. They are dying to have more of these put online. That is, I mean, maybe not the word dying, but the fact is the reason why the oil and gas price in New Zealand is so high is because of the lack of production over the last 10 years. All the infrastructure's there. And when I first started investing in New Zealand in 2010, just for an example for if you were to compare where the valuation should be, TAG Oil was 15 cents. It went to $11 over a few years. They had to raise a ton of money to build infrastructure onsite. I think their site currently, it's a different company now, handles 5,000 barrels a day. Then you go, and you spend 50, 60 million building infrastructure.

It's already there. We don't have to spend that to get it there and wait. It's available. We can rent it. We can use the space to hold our oil, and all the money we raise can go into the ground, and then we get our payback. It's an easier process. And the valuation, when TAG Oil was doing 1,000 barrels, so let's say net to Monumental we're 500. We're 50% of these workovers. Their valuation at 1,000 was ... I think it was $4 a share. Here we are, give or take a day. I honestly don't watch the daily price. It doesn't matter to me because I'm not a trader. I'm not selling any stock, but you can just simply see, when oil was the same price when I invested, this was the price of the stock, and it just went to the roof.

I'm hoping that will happen again. That would be a fantastic thing. You invest in a company, and then years later you're running a company with the same assets in the same area. And it's been a great experience. And I've had nothing but good feedback from shareholders on this.

Gerardo Del Real: No, listen, good work. Looking forward to having you back on. Lots of catalysts here moving forward. Thanks again for your time, Max.

Max Sali: Always appreciate talking to you, Gerardo. Have a good day, sir.

Gerardo Del Real: All right. Cheers.

Click here to see more from Monumental Energy
 

IMPORTANT DISCLAIMER & DISCLOSURES
Resource Stock Digest, as a publisher, is not a broker, investment advisor, or financial advisor in any jurisdiction.

Please do not rely on the information presented by Resource Stock Digest as personal investment advice.

If you need personal investment advice, kindly reach out to a qualified and registered broker, investment advisor, or financial advisor.

The communications from Resource Stock Digest should not form the basis of your investment decisions. Examples we provide regarding share price increases related to specific companies are based on randomly selected time periods and should not be taken as an indicator or predictor of future stock prices for those companies.

Monumental Energy has sponsored this report.

The information in this newsletter does not constitute an offer to sell or a solicitation of an offer to buy any securities of a corporation or entity, including U.S. Traded Securities or U.S. Quoted Securities, in the United States or to U.S. Persons. Securities may not be offered or sold in the United States except in compliance with the registration requirements of the Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom.

Any public offering of securities in the United States may only be made by means of a prospectus containing detailed information about the corporation or entity and its management as well as financial statements. No securities regulatory authority in the United States has either approved or disapproved of the contents of any newsletter. Neither Resource Stock Digest nor any employee of Resource Stock Digest is registered with the United States Securities and Exchange Commission (the “SEC”): as a “broker-dealer” under the Exchange Act, as an “investment adviser” under the Investment Advisers Act of 1940, or in any other capacity. Resource Stock Digest, its owners, directors, and employees are also not registered with any state securities commission or authority as a broker-dealer or investment advisor or in any other capacity.

HIGHLY BIASED:
In our role, we aim to highlight specific companies for your further investigation; however, these are not stock recommendations, nor do they constitute an offer or sale of the referenced securities. Resource Stock Digest has received cash compensation from Monumental Energy and is thus extremely biased. It is crucial that you conduct your own research prior to investing. This includes reading the companies' SEDAR and SEC filings, press releases, and risk disclosures. The information contained in our profiles is based on data provided by the companies, extracted from SEDAR and SEC filings, company websites, and other publicly available sources.

Resource Stock Digest, and its owners, directors, employees, and members of their households may own shares of Monumental Energy. Therefore, Resource Stock Digest is extremely biased. Measures are in place such that no shares will be sold during the active awareness campaign.

HIGH RISK:
The securities issued by the companies we feature should be seen as high risk; if you choose to invest, despite these warnings, you may lose your entire investment. You must be aware of the risks and be willing to accept them in order to invest in financial instruments, including stocks, options, and futures.

NOT PROFESSIONAL ADVICE:
By reading this, you agree to all of the following: You understand this to be an expression of opinions and NOT professional advice. You are solely responsible for the use of any content and hold Resource Stock Digest, and all partners, members, and affiliates harmless in any event or claim. While Resource Stock Digest strives to provide accurate and reliable information sourced from believed-to-be trustworthy sources, we cannot guarantee the accuracy or reliability of the information. The information provided reflects conditions as they are at the moment of writing and not at any future date. Resource Stock Digest is not obligated to update, correct, or revise the information post-publication.

FORWARD-LOOKING STATEMENTS:
Certain information presented may contain or be considered forward-looking statements. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in these statements. There can be no assurance that any such statements will prove to be accurate, and readers should not place undue reliance on such information. Resource Stock Digest does not undertake any obligations to update the information presented or to ensure that such information remains current and accurate.