AMERICAN LIBERTY PETE (OTC:OREO), based in oil-rich Bakersfield, California may be onto something that is worth a look: the next big U.S. oil find.
How’s that? Well, we all know by now, even investors that follow commodities, that the Bakken develop in North Dakota has pretty much changed the entire state in terms of jobs, housing, and digging and drilling for oil. New technology and ‘Fracking’ methods; getting the oil out of the shale, has really made a ‘boomtown’ mentality grow for those companies who got there a year ago.
American Liberty Petroleum may be onto the next oil-rich area: Nevada. Recent discoveries in California by Occidental Petroleum have produced estimates as high as a billion barrels of oil and natural gas equivalents. So OREO is essentially a Western America oil play.
The Company has two primary properties in play: the 2,557-acre Gabbs Valley Prospect is located on the 26,000-acre Cobble Cuesta structure, which could conceivably contain four billion barrels. OREO also has the 7,270-acre Kibby Flat Prospect in the Monte Cristo basin, which has preliminary estmates of 669 million barrels of oil. It also has lease options on the Cortez oil field in Nye County, Nevada.
But first; a little more about the Company itself…
American Liberty Petroleum was incorporated on October 16, 2008 in the State of Nevada as “Oreon Rental Corporation”. At the time of its incorporation, the Company intended to operate electronics rental stores. It never did.
The Company underwent a change in management in Jan 2010 and changed by acquiring oil leases which it plans to act as a non-operator, meaning; it will not directly manage exploration, drilling or development activities, but instead will seek joint ventures with oil and gas companies that have exploration, development and drilling expertise. Makes sense. During that 2010 ‘change of direction’ OREO received approval from FINRA to proceed with a 70:1 forward split of its Common Stock.
Nevada’s petroleum industry began with the discovery of oil in February 1954 at Shell Oil Company’s Eagle Springs #1 well in Railroad Valley, Nye County3. Since that time, less than 1,000 wells have been drilled in the state, by comparison, over 110,000 wells have been drilled in California’s Great Central Valley to date.
As of 2009, California’s average crude oil production was 568,000 barrels per day,1 making it the third highest oil producing state behind Texas and Alaska.
But despite the limited exploration, Nevada has produced 51.12 million barrels of oil (mmbo) as of March 2010 and at that time, there were nine producing oil fields in the state, eight of which are located in Nye County.
The four giant ‘super ‘fields’ found in California by Oxy representing a billion barrels are just west of two of OREO Nevada plays. Among Nevada’s nine producing fields is the world class Grant Canyon oil field, which for some years was the site of two of America’s highest producing wells.
OREO’s Prospects: the Gabbs Project, Nye County, Nevada, which is located about 140 miles southeast of Reno, the Kibby Flat Project, Esmeralda County, Nevada, and the Cortez Lease, Nye County, Nevada.
The Paradise Unit 2-12 well located on the Cortez Lease was drilled and swab tested in November 2010, before the Company acquired its option to purchase the Cortez Lease. In June 2011, the Operator received approval from the BLM to put the well on production using a conventional rod pump, and the well was swab tested in August 2011.
Oil was recovered but limited inflow was observed. In August 2011 the Operator filed proposed changes with the BLM to produce through a temporary test separator, and to perform a solvent wash to remove paraffin, and to acidize the formation to improve inflow. The pump is on location, and installation is still in progress.
Both the Gabbs and Kibby Flat projects are also in an evaluation phase; developing maps for the Miocene strata, which identifies the regional paleogeography, fetch area for oil and gas capture, potential reservoir rocks, source rocks, 2D seismic, gravity data, electrotellurics, and radiometric and soil gas anomalies.
This is truly a development ‘play’ investment, a ground floor opportunity, but growing, and even angry U.S. sentiment about oil independence could bring a lot of new investors into the stock. The Company has of yet to produce any revenues and hasn’t traded since July 20 when it was $1.25 per share. Its last listed market cap of $131 million will no doubt change on the first bid and ask.
But it’s worth taking a look at for 1) Oil Independence Sentiment; 2) Nevada being vastly under-explored; and 3) Nevada’s mining and exploration business environment is very friendly; that’s why the big name oil companies are there poking around.
As of July 31 of this year, total shareholder equity was $1,449,048. OREO has been raising operations and exploration money by doing a series of ‘Private Placement’ deals with New World Petroleum; essentially trading shares, that can’t be publicly traded, for cash: “For investment purposes only and not with a view towards distribution.” The deals are based on units, warrants and stocks and they looked ‘clean’ to me.
OREO is a fully reporting company and its new web site brought online in Oct has a very detailed PDF Fact Sheet and Investor Presentation.
One thing I like about the management at this Company, in addition to their experience, is that on Nov 7 the Company issued an ‘Update’ press release, talking in detail about the prospects. I think the world of transparency when it comes to shareholders.
To contact the Company you can call, toll free: 1-888-689-9654 or email: firstname.lastname@example.org and all of that information is listed within its new site: www.americanlibertypetro.com
I haven’t, don’t, and do not intend on holding any of the companies mentioned in this article.