Oil Developer Close to Production – Is it the Next Great African Oil Story?

oil production

When pandemic lockdowns and travel restrictions threw a wrench in the oil and gas market, the price rollercoaster began. 

Traders were forced to take on huge losses as fears from COVID-19’s effect on supply and demand spread like wildfire.

When WTI oil collapsed into negative territory, traders had to unload quickly and even pay to get rid of what they had!

However, the price recovery has been just as fast, with oil prices hitting a 6-year high on July 6 at $77/barrel.

As economies open up and travel restrictions are lifted, demand for oil continues to return.

Thankfully, an OPEC+ deal created a salve for the price wounds of the previous months, but supply and demand dynamics remain extremely tight.

To help stabilize this oil market, the world will need additional production from the oil-rich African nation of Nigeria. The country – which contains largely untapped reserves of nearly 37 billion barrels of crude oil – recently saw its oil production costs decline by 30% and is set on further reduction to just $10 per barrel, meaning huge profits in a market where oil prices are at $50, $60, and higher!

Goldman Sachs expects oil to reach $90 by the end of the year, potentially pushing profits to the moon for Nigerian producers. 

Within the oil-rich region is Decklar Resources (TSXV:DKL) (OTC:DKLRF), an independent oil and gas company that is just days away from producing oil at its Oza project. The project is expected to produce 4,000 barrels per day to start and reach up to 20,000 barrels per day with full field development. 

Decklar Resources (TSXV:DKL) (OTC:DKLRF) could be one of the few producers to provide the supply necessary to help assuage oil traders’ fears and quash indecision as oil demand continues to increase post-pandemic. 

5 Reasons Why Decklar Resources (TSXV:DKL) (OTC:DKLRF) Presents Massive Upside for Retail Investors

  1. Low Production Costs: Lower production costs (roughly $10 per barrel), for potentially huge profits ($50/60+ per barrel market prices)
  2. Oil Market Disarray: Falling supply with insufficient exploration and rising demand create perfect storm for oil
  3. Under-Utilized Reserves: Nigerian oil reserves have failed to be properly utilized, even amongst proved undeveloped fields, creating a massive avenue of opportunity
  4. Running Head Start with $50 million of infrastructure already in place at the Oza field and other similar high-quality oil assets being evaluated for acquisition. 
  5. Near-Term Horizon for Production as Decklar is focused on proven undeveloped fields with existing wells and infrastructure in place, reducing exploration and operational risk.

This Ticker Just Flashed a Major Buy Signal

Decklar (TSXV:DKL) (OTC:DKLRF) stock saw rapid growth in just a single year. On June 19, 2020, Decklar was sitting at $0.10. By May 2021, the stock hit $1.32. That’s a 1300%+ jump in just over 11 months! The has continued to push higher and two significant indicators are looking bullish right now. The relative strength index (a measure of whether a stock is overbought or oversold) is sitting comfortably above the 50 mark as a positive bullish signal. Additionally, the stock has broken above its moving average, confirming the positive movement.

Decklar Prepares for Well Testing and Commencement of Production!

Decklar Resources (TSXV:DKL) (OTC:DKLRF) owns the onshore Oza field in Nigeria, a concession spanning over 20 square kilometres with 12 stacked sands. The Oza well campaign includes multiple well re-entries on the property’s existing three wells, with initial testing already completed at the first Oza field oil well, Oza-1. 

Decklar Resources (TSXV:DKL) (OTC:DKLRF) has a big advantage since Oza is a re-entry program. The well re-entry program completed testing with an initial test run of 2,463 barrels of oil per day. Re-entry now having been completed and the initial flow testing of the L2.6 sand yielding 2,463 bopd done, the company moved on to the L2.4 and L2.2 sands. The first L2.4 sand delivered a flow rate of 10.3 million standard cubic feet of natural gas per day. The L2.2 sand delivered a flow rate of 1,361.

Decklar (TSXV:DKL) (OTC:DKLRF) is now looking forward to the remaining well testing activities. Once these are completed, the well is expected to reach commercial production upon installation of the completion equipment. 

These fields are expected to produce nearly 4,000 barrels a day initially (just at Oza) before ramping up to 5,000 -10,000 barrels per day!

Decklar Resources (TSXV:DKL) (OTC:DKLRF) also signed a share purchase agreement to buy out Purion Energy Ltd to participate in the nearby Asaramatoru field, which was formerly owned by Shell. 

Asaramatoru, which is located near the Bonny LNG plant and oil export terminal, and other producing oil fields like Bonny, Bomu, and Alalki. The Asaramatoru field produced nearly 1.5 million bbls between 2014 and 2018 and has two wells already in place with production rates reaching 3k bbls per day, offering Decklar a huge head start.

Decklar Resources (TSXV:DKL) (OTC:DKLRF) looks like it could offer incredible value as a company operating in the same region as some of the world’s biggest  oil and gas supermajors, including Royal Dutch Shell, Chevron, and Exxon. However, Decklar has a market cap at a fraction of its competitors at approximately $70 million, setting it up for much bigger upside.

The Next Big Catalyst is Almost Here for Decklar Resources

After Decklar Resources (TSXV:DKL) (OTC:DKLRF) finishes the initial well re-entry it will immediately transition into a production company. The transition from development to production of 20,000 barrels per day at Oza, plus additional volumes from Asaramatoru could be the catalyst for this undervalued stock to gain the attention it deserves.

If you would like to learn more about the ongoing and upcoming work by Decklar Resources (TSXV:DKL) (OTC:DKLRF), click here.

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