Manas Petroleum Makes Progress, Faces Risks
Manas Petroleum Corporation [[MNAP.OB]] may be in its development stages, but some investors are bullish on the future. Several of the company’s projects are entering the exploration stages, while an independent study suggested that there could be 4 billion recoverable barrels of oil equivalent under Manas’ owned and co-owned land. These substantial oil reserves could pay big dividends down the road to investors, but it could be some time before the profits come.
Manas owns several interests in Albania, Kyrgyz Republic, Tajikistan, Mongolia and Chile and has made substantial progress in the first quarter. Each project area is within a proven petroleum system and is near already producing shallow oil fields. Total potential of seismically defined exploration projects exceeds and independently verified 4 billion recoverable barrels of oil equivalent. When it comes to exploring these properties, the company is making progress.
Manas recently announced that its wholly-owned subsidiary, DWM Petroleum AG, has signed production contracts with the Petroleum Authority of Mongolia for blocks 13 and 14 on April 21, 2009. The company believes that this area shows great potential for exploration as evidenced by multiple oil seeps. Meanwhile, Manas also announced that drilling of the first two shallow exploration wells by the Kyrgyz joint venture is expected to commence soon.
During the first quarter, Manas reported a net loss of approximately $2.2 million on no revenues. Meanwhile, the company expects to incur an additional $4.9 million in expenses during the next 12 months. Based on the company’s business plan, $3.9 million of these future funding needs will come from internal sources, while approximately $1 million will need to be funded from external sources, which could include additional debt or equity issuance.
In the end, Manas Petroleum is making progress on its exploration activities, but it could be some time before profits come in the door. Long-term investors may be interested in building a position at these levels, but future funding needs of $1 million could dilute equity or increase financial risk going forward.
CONTACT: Daniel Minton, Managing Director, 406-862-5400, daniel@accelerize.com