Apologies in advance for the short notice, but that’s how these deals go sometimes.
This one is closing soon and your interest needs to be in today if possible.
It comes from a familiar group and has significant backing from Frank Giustra’s group. With that comes a structure that isn’t my favorite. But this group has repeatedly made profits for early investors with this modus.
The company is MCF Energy (currently halted as Pinedale Energy (TSX-V: MCF)), and it’s seizing an open window to capitalize on Europe’s new need for domestic energy with very competent management.
Incoming MCF Energy leadership co-founded Europe-focused Bankers Petroleum, which grew oil production by 2000% and achieved a peak market capitalization over $2.25 billion, as well as BNK Petroleum, formerly Europe's largest subsurface landholder of oil and gas leases.
They are entering Joint Development Agreements for two initial assets — one in Austria and one in Germany — and raising C$8.5 million, which is already fully subscribed.
The first is with ADX VIE for the Welchau Well and the Welchau Area in Austria, in which MCF can earn a 40%.
The Welchau gas prospect is located in the foothills of the Austrian Alps and is analogous to the large anticline structures discovered in Kurdistan and the Italian Apennines. Welchau has a relatively shallow target of approximately 1220m True Vertical Depth, with a projected Total Depth of 1700 meters to evaluate all the potentially productive zones. The well is located with road access to the planned drilling location and a short tie-in distance to the national gas pipeline network of approximately 18 km.
Welchau is located up-dip from a gas discovery (Molln-1 well) drilled in 1989 which intersected a greater than 400 m gas column, with 900 meters interpreted from pressure data. The well tested condensate rich, pipeline quality gas (maximum flowrate of 3.5 mmcfpd with 40 barrels of condensate per mmcf).
The first well is expected to be spudded by next September (2023) and is expected to cost EUR3.81 million (~C$5.5 million) to drill. MCF can earn 20% of the profit hydrocarbons for funding 50% of the drilling cost. It has an option, exercisable until January 21, 2023, to increase to 40% by covering 100% of the costs.
The second agreement is with Genexco for the exploration rights to its Reudnitz prospect and other opportunities in Germany. The Reudnitz prospect is a confirmed gas accumulation established by three previously drilled and abandoned wells, and a production license application has been started.
In consideration of these agreements, MCF is issuing 25 million shares C$0.20 to Kepis & Pobe Financial Group, which is the group bringing in the assets and assuming management of the newly-named MCF Energy.
Leadership
That group includes Jay Park KC, James Hill and Ford Nicholson.
Jay Park KC is expected to be appointed Executive Chairman of MCF. He is a renowned energy lawyer and entrepreneur based in London, UK. Mr. Park has provided legal advice to energy projects globally for over 40 years. He is the founder of Park Energy Law and former Chairman and CEO of Reconnaissance Energy Africa (RECO). All early investors made money on RECO as it ran from C$0.20 to over C$13.00 from 2020 to 2021.
James Hill is expected to be appointed CEO and a Director of MCF. Mr. Hill is a professional geologist with over 40 years of technical and executive level experience in petroleum and natural gas exploration and development. Mr. Hill is the former Vice President of Exploration for BNK Petroleum and Bankers Petroleum, which as already noted, grew oil production by 2000% and achieved a peak market capitalization over $2.25 billion, before being acquired.
Ford Nicholson is joining MCF as a strategic advisor to help steer its growth. Mr. Nicholson was a co-founder of Nations Energy, acquired by CITIC for US $1.91 billion in 2006. He was Deputy Chairman of InterOil, acquired by ExxonMobil for US $2.5 billion in 2016. Mr. Nicholson was a co-founder and director of Bankers Petroleum, an oil producer in Europe acquired by Geo Jade for $575 million in 2016.
Gordon Keep, who was an early partner of Nicholson in establishing Bankers Petroleum, will also join MCF as a strategic advisor. Mr. Keep is an experienced investment banking executive who has helped found several significant natural resources ventures including Endeavour Mining, Lithium X Energy and Wheaton Precious Metals.
General Wesley Clark, a former director of Bankers Petroleum and BNK Petroleum, has agreed to join MCF Energy's Board of Directors. General Clark served 38 years in the United States Army. His last military position was NATO's Supreme Allied Commander and the Commander-in-Chief of the U.S. European Command.
Structure & Current Financing
Pinedale Energy (TSX-V: MCF) has 112 million shares outstanding with an average cost of C$0.01. You’ve got to be comfortable with that to participate in this deal. It is a lot of cheap shares, but the tradeoff is the marketing and group that comes with it, which I’ve seen outweigh the cheap shares in prior deals.
The incoming group is getting 25 million shares at C$0.20.
And the current financing you can participate in is raising C$8.5 million at C$0.20 for another 42.5 million shares.
That takes you quickly to 179.5 million shares outstanding. That makes the post-money valuation for this round C$35.9 million.
As noted, this deal is already fully subscribed.
The idea is to close quickly and get the stock unhalted under the new name in January 2023, and then to raise significant additional funds at higher prices to acquire additional assets.
To participate, you need to express your interest today. Contact Sheldon Chang, and tell him you’re coming from Hodge Family Office. Send an email to:
Sheldon Chang
Sheldon@commoditypartners.ca
Office: 604-687-7130
Cell: 604-828-4080
See the press release here for more info.
Call it like you see it,
