Monterey Shale, the Golden State’s Oil Rush- Zodiac Exploration Holds Prime Position!

Monday, September 2, 2013 · Posted in Oil & Gas, OIL & Gas Companies · by Peter Epstein

The following article from the prominent online Oil & Gas site, Shale Stuff, exemplifies the growing interest in Zodiac Exploration’s very substantial land holdings. As this article, and my own extensive due diligence indicate, the political arena in California is warming up to the inevitible exploitation of the more challenging oil shale bounty in the San Joaquin Valley. Already a top producing region in the State, production so far is just the tip of the iceberg of what MIGHT be recoverable with the ongoing cooperation of technology advancements and high oil prices.

Zodiac controls ~72,000 net acres in the heart of the most exciting and largest oil shale region in the North America. Twice as large as the Eagle Ford AND the Bakken formations COMBINED. While it’s still early days in getting the really hard barrels out of the ground, Zodiac may have the single-best land position of any non-major oil company. Zodiac has $17 million in cash and zero debt, for an Enterprise Value of just $15 million. The company has cash + tax pools worth roughly 10 cents per share, but the stock is trading at only 8.5 cents per share.

The market is effectively ascribing a negative value to the Company’s ~72,000 net acres, but Zodiac has spent close to $85 million since 2009 and has accumulated a tremendous database of information, including drilling two wells and investing tens of millions in seismic studies. Given the location and the data, the value of the land package to a major could easily be $500-$1,000/acre. That equates to a share price of 20c-30c. Land valuations in the Eagle Ford and the Bakken reach as high as $25,000/acre, so $500-$1,000 is not a stretch. Royal Dutch Shell, Exxon, Chevron, Hess and OXY have already gobbled up the majority of the best property, Zodiac’s sizable block is an increasingly scarce and valuable asset.

Please click on this link to learn more about Zodiac Exploration. The following is the article from Shale Stuff….

Monterey Shale Oil- The Golden State’s Oil Rush

The Monterey Shale, covering more than 1,700 miles and an estimated 15.4 billion barrels of oil under central California and the city of Los Angeles, is ready to get fracking moving. California is already a leader in energy. You can count the ways it is leading the nation: solar energy, its limit on greenhouse gas emissions, and a cap-and trade system it launched this year.

And now it’s been revealed California is home to one of the largest shale reserves in the world. Yet the state has been reluctant to tap it. What it boils down to is not geology – because as you well may know, the oil is there – but the politics of the matter.

But since last month, the Golden State’s lawmakers are singing a different tune, indicating they’re ready to push progress back to a state of prosperity not seen since its gold rush of the mid to late eighteen hundreds. A bill that would have put a ban to fracking was thrown out, despite objections from environmentalists. It looks like all the anti-fracking campaigns are taking a backseat on the political stage in 2013.

Take just one look around the country, and you’ll see all the economic success the shale boom has created. And if you’re holding what is likely 64% of the nation’s shale oil reserves in your hands, as California is, you’ve got to take a swing at it. That’s how big the Monterey Shale is. The Eagle Ford, the Bakken – they can all just take a seat when California starts fracking. To put it in perspective, the Monterey formation is twice the size of the Bakken and Eagle Ford combined.

We can sit here and argue all day about what’s right and what’s wrong. To frack or not to frack, but it’s just a moot point. California is going to frack for oil and gas. And it’s going to be sooner rather than later.

The Golden State

That’s big news for California, which has seen its unemployment rate rise and its economy plunder. Several companies are already gearing up for the big boom ahead – drilling test wells, lobbying for support, pushing their own PR campaigns, and buying up mineral rights.

If you look to the east in North Dakota and its Bakken shale, producers can do no wrong. They’ve experienced massive gains. And if you consider that the Monterey is a giant compared to the Bakken, then you’ll know California’s potential for growth is exponential. The important thing now is to figure out which of those companies in California stands to make the most profit.

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