QualityStocks would like to highlight Vanguard Energy Corporation (OTCBB: VNGE), a pure-play upstream oil production company. Based in Houston Texas, Vanguard is focused on shallow drilling of new wells on established/land-based fields in the hydrocarbon-rich eastern part of Texas. The company currently has enough acreage under its control to drill more than 50 new wells. Their experienced, proven management team has an extensive track record of success in all aspects of oil and gas acquisition, development, production, and finance.
In the company’s news yesterday,
Vanguard Energy reported that the third party reserve engineering firm used for certification purposes has upwardly revised the final proved reserves total by 17% to 725,882 bbls, firmly reinforcing the value of Vanguard’s flagship Batson Dome Field, as well as the company’s extant/new drilling program(s).
This is an even larger jump when compared to last year’s exit totals (reserves are up 20% since Sept 30), a track record that clearly shows VNGE’s capacity to grow reserves through circumspect development. We are talking a PV-10 value of some $43.4M on that reserve total, up 21% from the valuation previously reported (Nov 19, $35.8M), or up a handsome 36% since the end of last year (Sept 30).
President of VNGE, Warren Dillard, spoke of how good the new figures looked to shareholders, especially so soon after the previous report, which was also really positive news. Dillard cited the $3.40 or more in PV-10 valuation per share of stock being generated as a current sign of Vanguard’s good health, as well as showcasing the massive amount of undeveloped category reserves within the larger proven total, something which gives investors an obvious road sign for future growth at Batson. Dillard was very enthusiastic about the company’s planned drilling/development program, telegraphing the raging drive at VNGE to tap more fully into that huge wealth of undeveloped oil.
With some 48.5k bbls of production out of Batson this year and a whopping reserve replacement rate of 270% (based on finalized proven reserves total from the reported figures), VNGE has captured a tremendous value proposition for investors with a bright future as the planet’s taste for oil continues to heat up. A full 58% of the proven reserves total is in the undeveloped category, with only 30% currently PDP (proved developed producing, the remaining 12% is in the developed non-producing category) and this huge amount of untapped growth potential is a very bold indicator to markets of VNGE’s future performance, especially as the newest drilling program ramps up.
The plan is to put in two more wells at Batson before the close of the calendar year, and VNGE is proceeding apace of expectations with the first well already spudded this week near the last successful completion and a second getting ready to go in on the recently acquired Hull-Daisetta field acreage. All perfectly in line with the company’s industry projections really, as VNGE moves to compensate for the domestic economy’s insatiable appetite for energy, even as China emerges, the new king of global energy consumption.
VNGE cares a great deal about shareholder value and this is made evident by the consistent engagement of an independent reservoir engineering company to audit the company’s proven reserves and determine overall economic value of the holdings at the end of each year (based on total potential production of proven reserves discounted at an annualized 10% rate, in accordance with standard SEC reporting praxis). It is noteworthy that the increase reported today in proven reserves has been achieved solely through further intelligent development of existing acreage by the company. The replacement rate itself speaks volumes about the potential of VNGE’s acreage footprint, as the reserve growth reported today already factors in oil depletion from preceding production.
Yes, Vanguard continues to prove themselves capable of steadily growing their reserves through shrewd development, while continuing to churn out solid production and acquisition metrics. The company is on the front lines of helping to secure U.S. independence from foreign oil imports by ably targeting and developing low-risk wells close to existing production within its primary target area of Texas.
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