Oil & Gas Firm Acquiring Eagle Ford Acreage Resumes Trading
Contributed Opinion

Oracle Energy Corporation: "Effective at the open…. the company's shares will resume."

The incredible advantage of being a newsletter writer for equities is that you build relationships and networks with dedicated and brilliant people, research-oriented analysts that are covering a wide range of companies. These networks are great sounding boards and resources. This network spreads out, reaches throughout regions, countries and continents focusing on various sectors, commodities and companies.

I learned a valuable lesson early in my career: always listen to people smarter than you, or have more experience and more success than you. It seems to work! So, when a successful and smarter person called me and mentioned Oracle Energy Corp. (OEC:TSX.V; OECCF:OTC), I was going to listen and take notes.

Oracle Energy was handed to me with a beautiful bow on it. Presumably as a belated birthday present. This person said, "Andrew, I believe this company checks a lot of boxes in your model; however, it is not in mining but oil and gas."

He told me the basic story and I went digging. I sifted through the news releases and saw the opportunity. I called him up and said: "It is a resource in the ground that you drill for…same thing!"

With that silly comment and a heartfelt thank you, I pulled up the chart.

Now, I am not a technician. Analyzing charts is not my specialty, but I did show this chart (without the stock symbol) to a technical analyst; greedily enthusiastic would be the best description of his reaction. Even with my rudimentary understanding of charts, it was clear. This stock is posed to climb. It wants to. It is primed to. My hope is that a technician will see this article and chart above and will follow up with a full analysis of Oracle, but even I can see the resistance lines, the two cups and other markers that scream opportunity.

Let's jump into the fundamentals.

Geopolitically, accessing and shipping oil and gas assets is becoming onerous. We hear President Trump speaking out against the EU purchasing oil and gas from Russia. We read that issues are still developing in Iran and the Middle East with sanctions, escalations of rhetoric tensions at a tipping point. Venezuela is in complete disarray and getting hammered economically as it continues down its socialist disaster. We know all the problems with mining in most of Africa and the news out of places like South Africa is dismal. Money coming back home is attractive and having access to production in the U.S. is going to be key. In the end, Oracles is coming out of the gate spending $5 million and getting strong production with enormous potential fracking and upside potential. Money is coming home, and assets are being developed back in safe zones.

Back at the end of last year, December 27 to be exact, Oracle announced a share consolidation. That decision can be upsetting for existing shareholders, but as new shareholders this is good news. In doing so it was looking at an acquisition back in the U.S. Money coming back home, a story I love, and a termination of assets in Africa, which is perfect. The risk in most of that continent is beyond consideration right now.

There were three step rounds of financing: the first was $2.5 million at $0.075 and $1.5 million at $0.11 a couple of months later, and one final financing on June 5 for $1,.5 million. The total was $5.5 million. Press releases from Oracle mentioned that it had some obligations and debts of a couple hundred thousand dollars, but more importantly it started hinting at a major purchase in Texas. The company was restructuring, selling the "exotic risk" in Africa and it announced an evaluation of an acquisition in the prolific Eagle Ford Shale Formation in Eagle Ford district of South Texas.

Quickly a new vision was taking shape. The announcement from this past Monday, August 27, announcing the purchase of this property was the actualization of an incredible plan with potential. It began back at the start of the year with this evaluation leading to a partnership with Petrie Partners as financial advisors. If you do not know this boutique investment bank, you should research them. It is a specialist bank and its advisors with Oracle Energy management achieved an excellent result. Petrie Partners is an alliance of astute bankers from Bank of America Merrill Lynch and Petrie Parkman & Co. The senior members of the Petrie team bring more than 25 years of energy investment banking experience, including over 300 energy M&A and capital raising transactions representing over $350 billion of aggregate consideration. This is the team that Oracle partnered with to aid in the transaction.

Oracle and Petrie negotiated for a 10% down payment on a $5 million land package with a producing asset, more land and the following highlights:

1. 2,547 net acres of mineral lease rights of which 613 acres are to the base of the Buda, 640 acres are to the base of the Eagle Ford and 1,294 acres are to the base of the Austin Chalk.
2. Six producing wells, seven shut in wells and the production infrastructure situated on the properties.
3. The asset is producing approximately 70 boepd and has the opportunity for well workovers to significantly increase production.
4. The July production was 1,273 barrels of oil and 5,020 thousand cubic feet of gas.
5. Pursuant to the terms of the purchase agreement the company will acquire a 100% working interest and a
6. 74% net revenue interest.
7. An option on a second asset done with four arm's length private entities, which own acreages adjoining the assets. This option adds 6,310 net acres of which 4,923 acres are for all depths, 613 acres are to the base of the Buda, 640 acres are to the base of the Eagle Ford and 134 acres to the base of the Austin Chalk. An incredible breadth of opportunity.
8. The project will commence in 2019 and end in 2023.

One of the biggest factors tying this together with Oracle and Petrie Partners is the third-party evaluation on the property and production. RPS Energy Limited (RPS) was hired on as an independent qualified evaluator and detailed the NI 51-101 Report:

• Based on the results of the evaluation Oracle expects commercially recoverable volumes of 31 million barrels of oil and 59 billion cubic feet of gas from the Lower Eagle Ford formation in the lease area.
• The "unrisked, after tax, net present value, discounted at 10%, for these assets is $329 MM US."
• There is a 50% probability the recovered volumes will exceed these estimates and 50% probability that they will be less. Translation: this is an art as well as a science and we are being cautious and conservative with values but there is significant risk with potential upside.
• The cost of development of the property is estimated at $358 million, which may make the project commercially viable.

The considerable expenditure and enormous scope of the project is noted in the press release. It is a massive opportunity. Countering this is the fact that Petrie Partners has an incredible record of financing as noted above. The press release highlighted that Canadian investors will have the ability to partake in the equity possibility bit, more importantly Petrie Partners will be looking to fund the "land acquisition and a structured debt raise in the US for drilling funds." Ideally, the expertise of Petrie Partners will bring in long-term debt at extremely favorable low rates; the risk, of course, being that the free money days have gone on for a long time, but this group has raised over $350 billion.

So, we have a technical trade that might jump at open. We have a company that has changed direction, raised money over six months with an advisor team with financial acumen, and has announced a purchase of a land package with producing wells and some mitigated risk and known risk around financing. The company announced that they won that purchase and what is unique and impressive next is that Oracle gives the market two full days to come to terms with the release. It wants people to let the information sink in. This is a big deal. It seems to say this direction has potential. The next logical step is to look at management and see if they are up to the task to handle the production and potentially what might be discovered and re-worked. Is there risk; of course, there is. The biggest factors will not be recovery of assets on a technical capacity but more on getting the right financing and financial correct. This is as much a test of Oracles capabilities but that too of Petrie Partners.

The answer is a resounding yes! Roughly 112 years worth of big corporate, big oil and big gas experience.

Darrell McKenna is chairman and CEO; he has 37 years of energy and leadership experience and is the former chief operating officer of Kosmos Energy. He has held senior executive positions with Hess Corporation and Mobil Oil Corporation in the U.S., Canada, Australia and Africa. Art Green is producing manager and has 45 years of experience including technical, management and executive positions with Hess Corporation and ExxonMobil, where he was president and general manager for Mobil in Equatorial Guinea. Mark Forster is the interim chief financial officer and joined the company in 2006. Mr. Forster has 30 years of experience in financial and management accounting for banking, manufacturing, oil and gas, and mining companies. His prior CFO experience MYM Nutraceuticals. Mr. Forster was also a manager at BearingPoint (KPMG). The management has the track record to build this company. They have illustrated it with picking a great financial partner and procuring this incredible opportunity in Eagle Ford.

Finally, let us consider the structure and funding. There are 55,287,600 shares issued and the press release tells us that forecast spending on the property and the Adjoining Lands for the first six months is "$18.7 million US of which $10.3 million US is for land acquisition and A&G with the remaining $8.4 million for the drilling of an Eagle Ford long lateral horizontal well." Oracle plans to look to Canada for an equity financing. Management will announce Canadian banking partnerships soon but are also continuing to work with Petrie Partners Securities to assist in raising development capital for the drilling portion of the Eagle Ford Development Project. We have a stock that is poised to climb with a strong management team and excellent financial support and backing.

The first sentence of the press release is a good conclusion: Effective at the open, Wednesday, Aug. 29, 2018, trading in the company's shares will resume.

And I expect it to "resume" like a rocket.

But you do not have to chase too hard. This company has achieved some impressive results in a matter of months.

Do not miss out on getting In Ahead of the Curve. This is the time, this is the second pick and get ready to hear more about this amazing opportunity.

Go to our website website for Prospectors Corner prospects, our Picks Ahead of the Curve Made the Grade.

Andrew O'Donnell is president and CEO of Supercharged Stocks.com. He was born into a family that lived and breathed the financial industry. Many a family meal was spent discussing markets, wealth accumulation, estate planning, tax strategies and new products and services for companies and families. A graduate of Ridley College, O'Donnell obtained his Bachelor of Arts from the University of Western Ontario. He began his career in Calgary as an advisor with Standard Life but branched out to include stocks, bonds and derivatives products when he took his book to Merrill Lynch. The focus was on providing thoughtful planning, high performance and structured strategies. Throughout his career O'Donnell has worked at various levels of the financial service industry culminating as a Managing Director of an offshore "captive insurance company" in Barbados, which he created with Willis Canada for a land banking company. He has created structured products and is always looking for innovative, interesting market advantages.

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