THE ASX will today get its first new petroleum listing in about a year, with the team that brought us the soon to be taken over South Australian shale company Ambassador Oil and Gas unveiling their next junior play — American Patriot Oil and Gas.
Kleo Hatziladas, who gathered the tenements that Ambassador was floated on in 2011, has acquired ground throughout the Rocky Mountain basin in the US and brought former Patersons Securities analyst Alexis Clark to head the company.
David Shaw, whose chairman duties at Ambassador are set to be relieved when DrillSearch or the less likely US-based outsider Magnum Hunter takes over, will be non-executive chairman at American Patriot.
The company is slightly different to a host of Australian-based companies targeting shale riches in the US in that American Patriot plans to apply the horizontal drilling and fracking techniques that spurred the US shale revolution to conventional oilfields that have already been produced from.
The company raised just over $8 million in its initial public offering and, if shares remain at the 20c issue price, will have a market value of about $28m.
Hatziladas and his associates hold about 14 per cent of the company.
The American Patriot model is to buy land at early stages and bring in partners to drill, thereby not using shareholder money for acquisitions, something successfully done by the likes of Texas shale play Aurora Oil and Gas, which was taken out last month by Canada’s Baytex for just under $2 billion.
The company says it will never use shareholders’ funds on exploration, with the money raised in the offering earmarked for acreage acquisition.
The first project that will be drilled is known as Nothern Star, in Montana, an old Exxon field where drilling is due to start in the next few months.“Success on this project should unlock a significant new tight oil resource project with significant upside to the acreage value from American Patriot’s low-cost entry point,” Clark said.
The partner is Treasure Exploration, which bought 70 per cent of the project for the commitment to drill wells, and which American Patriot says is the subsidiary of a bigger, unnamed private oil and gas company.
Originally published as American Patriot adds to offerings
AOW Price at posting:
0.0¢ Sentiment: None Disclosure: Unspecified
