Nickelore Ltd (ASX:NIO) is relisting on the ASX as Stonehorse Energy Limited (ASX:SHE) with positive attributes including highly prospective oil & gas plays in the USA’s prolific Anadarko Basin and the backing of successful WA-based mining executive Rob Gardner.
Both factors have set the new entity on the path to relisting early next month with encouraging interest shown by investors as Stonehorse seeks to raise a minimum of $5 million.
Gardner invests funds into company
The fact that Gardner is chairman and has already invested more than $1 million of his own funds into Stonehorse’s start-up strategy is evidence in itself that the new entity means business.
Gardner’s confidence has given the company a sound head start as a private concern and ensures it will be cashflow positive from the outset as a public entity upon relisting.
He has more than 28 years of experience in the mining industry and has developed a number of projects that are now major assets of ASX-listed companies.
Dragon Mountain story
His success with Dragon Mountain Gold speaks for his tenacity and his determination to get the best possible outcomes for shareholders.
Gardner took Dragon Mountain from struggling minnow to market darling when the flagship Lixian Gold Project in China was sold in 2011 and the majority of the $151 million proceeds were returned to shareholders by way of a dividend and return of capital.
In 2017, Gardner turned his focus to finding a suitable “cashflow type” business for Nickelore and in his hands-on style, visited the US to meet Black Mesa Production, LLC representatives to see first-hand the opportunities that are available in that country’s oil & gas sector.
Black Mesa is the US partner and operator of ASX-listed Brookside Energy Limited’s (ASX:BRK) Anadarko Basin properties.
Subsequently, Gardner put his money where his mouth is and led a syndicate that made some initial investments in producing oil & gas wells in Oklahoma and the beginnings of what is now the Stonehorse Energy strategy was born.
The prospectus’ raising allows Stonehorse to complete the acquisition of 100% of the US-company Lone Star Energy, an oil & gas development company focused on the Anadarko Basin.
World-class oil & gas basin
This is one of the premium oil and gas basins in the US, second only to the Permian Basin in Texas.
Stonehorse will hold working interests in three wells at the completion of the capital raising and has access to a pipeline of well bore interests via Black Mesa.
The company’s share of daily production from the Bullard and the other two producing wells being acquired is approximately 280 BOE per day, generating US$10,000 per day.
Bullard has produced 135,000 BOE in its first 105-days of production and is currently producing around 1,000 BOE per day, of which Stonehorse has a 20.5% working interest.
At its election, Stonehorse will participate in other wells in the highly productive SCOOP and STACK shale plays within the Anadarko Basin.
Stonehorse will have an enterprise value of just $3.4 million when it relists, with independent experts pointing to a $2.3 million valuation for the existing oil and gas assets.
The raising, which is being heavily supported by a mix of current shareholders and high net-worth investors familiar with US oil and gas investments, is well advanced and the company expects to be requoted in early May.
- Nexus broken between acreage and working interest in well bore assets
- Future well bore investment decisions subject to rigorous rate of return hurdles
- Ongoing investment timing and amount at the companies choosing not driven by lease maintenance or debt servicing
- Low overhead cost model with back-in after payout arrangement with Black Mesa
- Business model based on recycling capital
- First class technical team in Black Mesa Production (BMP) based in the US with a strong track record of success