Magnum Gas & Power (ASX: MPE)

 
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Come late September, one ASX listed micro-cap company will be appraisal drilling a potential US$6 billion gas resource.

With a share price of just $0.002 and a market cap of a mere $8.9 million, this is still very much a ground floor level opportunity.

Based on work to date, the company believes it’s a 50/50 shot at hitting commercial flow rates at the Tulainyo Gas Project – which has been assessed independently to host up to 6 TCF of recoverable gas.

At current gas prices, the potential in ground value could be up to US$6 billion – with a $1.2 billion share to this ASX company.

We think 50/50 is not bad odds when the size of the prize is of that magnitude. Of course, your risk profile might be different to ours – so this is not personal investment advice.

This stock is highly leveraged to drilling success from its current share price.

Following a recent $4 million capital raise by the company, the stage is now set for a late September drilling event that is likely to change the shape of this company forever.

In June, this company acquired an interest in the untested, largely underexplored, yet potentially giant-scale Tulainyo Gas Discovery.

The project is well placed for a commercial development, with good proximity to gas markets and infrastructure, and moderate onshore California development costs.

The information on this page should not be the only trigger for your investment decision. Click on the links below for a more in-depth and informed examination of the company. We strongly recommend you seek professional financial advice whenever making financial investment decisions.

The company has a pair of strategic, high-pedigree partnerships secured and is looking to leverage  outcomes by working in a joint venture capacity with its farm-in partners which already include California’s largest natural gas producer: California Resources Corporation (NYSE: CRC).

If all goes as planned it could be a highly lucrative move for this ambitious company.

With drilling set to commence just a few weeks from now, we’ll find out shortly what this acquisition is made of.

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