Our next company is Sonoro Energy Ltd. (TSXV:SNV), which has headquarters in Calgary. The company is focused on oil exploration and production in Canada and abroad.
Richard Wadsworth, Sonoro Energy chairman and CEO, recently came by The Market Herald Canada to speak about the company and its projects.
TMH: For our listeners who may not be aware, can you provide a brief overview of Sonoro and your personal experience?
Wadsworth: I’ll start with my personal experience and then I’ll give you a little bit about Sonoro. I started in the industry probably a little over 30 years ago. I worked for a company called Koch Exploration, which was involved in a lot of heavy oil and shallow gas development in Northern Alberta in Bonnyville all the way to Lloydminster, Saskatchewan area – you’ll see some relevance to that here as we go on. Following that, I went internationally.
I was a founder of Bankers Petroleum in Albania, where we brought on a brownfield redevelopment project and eventually that went on to over 20,000 barrels a day and was sold successfully. Then most recently in the last 10 years, I’ve pretty much spent most of my time in the Middle East, the last six years actually in Iraq. I was leading a development there for a 50,000 barrel a day development.
For Sonoro, I have been on the board and as CEO a couple times. Most recently we’re really focusing now back in the Western Canadian Sedimentary Basin (WCSB) and focusing back to, I guess my home roots. Heavy oil and the opportunities, that even today, after 30 years from when I first started, they’re still going strong and there’s a lot of opportunities, with new technology, to bring these on and create production and generate cashflow and that’s where we’re starting.
But, as you’ll see as we go on, Sonoro is a bigger story than that in that we want to be able to take what we have here in Canada, what we learned, the technology, and be able to leverage that into international opportunities that we see.
TMH: Sonoro recently began drilling on its first well located in Saskatchewan. Can you tell our audience what this means for the company?
Wadsworth: This is a first well, we’re on it today. It’s drilling as we speak. Hopefully we’ll have some more news early next week on this well. It is targeting a Waseca channel that is well-defined offsetting some of Baytex’s production where they’ve got 1,800 barrels a day of production in the Kerrobert area.
This is a vertical well but the next well that we’re going to be drilling is going to be a multilateral horizontal with multilaterals lined, which is something new, maybe not new to Western Canada, but certainly it’s coming along, and it’s something that internationally could open a lot of doors for us.
But getting that first production here in Saskatchewan, getting that cashflow is key to giving that foundation for Sonoro that we can then utilize going forward.
TMH: Moving on to strategy, can you provide a summary of the overall strategy for Sonoro as we head towards the end of the year?
Wadsworth: We’ve got this first vertical well and the horizontal, multilateral horizontal, that part of the strategy is establishing that early production, that early cashflow to set that foundational base for Sonoro.
Along the lines with that though, is the element of as a junior company looking at international opportunities, it’s very important that we show that we have production, we have success, we have technology that we can deploy, and we’re pursuing a number of opportunities in the MENA region that I think will fit very well with what we’re doing here.
Hopefully, we’ll be able to announce something by the end of this year, if not early next year on the international front but along the way, we’ll continue with our development in Saskatchewan, building our production, building our cashflow and then simultaneously looking for other opportunities where we can come in at a low cost and find those niche opportunities where we can grow with low risk.
TMH: Speaking of that MENA region, the company has identified several oil and gas opportunities there. Can you talk a little bit about those new ventures and their growth potential?
Wadsworth: It’s still a little bit early to talk specifics at this point, but I think what you can see, if you look at our board this summer, we added Sara Akbar and we added Henry Legarre to our board, both of which have a tremendous amount of experience and a great reputation having worked throughout the MENA region, and Africa, and even into South America.
They’ve been wonderful to work with and we’re identifying opportunities. We’ve all been together on a number of occasions over the last few months, looking at different opportunities and hopefully advancing on a couple key ones here as we go forward.
For now, our focus is getting these wells drilled, getting the production, getting them on stream, getting the cashflow going, and hopefully we’ll be able to lock down one of these transformational opportunities where we can apply some of the technology and learnings that we have here in Western Canada.
TMH: Moving to a broader outlook, what makes Sonoro a strong investment for those looking to add an energy sector stock to their portfolio?
Wadsworth: I think one of the key aspects is that we’re not focused on exploration and high risk. What we’re focused on is areas where we can get early production. We can get that cashflow going, and we can work on development opportunities and put our capital into the ground to generate the revenues and cashflows.
Then we can continue to grow without having to take on a lot of upfront risk, and putting up a lot of capital upfront, then basically growing it through the development side on the assets that we pick up along the way. I think it’s going to be an exciting time for us, with what we’re doing in Saskatchewan, and as we drill more of these multilateral wells. I’m sure we’re going to learn and we’re going to get better at it.
Then I’m really excited about being able to take that, and not just what we’re doing here in Saskatchewan, but what the industry in general is doing here in Canada and the United States, going after other tight zones that have a tremendous amount of resources available that just have not been unlocked yet and so we hope to be able to tack onto one of those and be able to unlock some of that value for the countries we work in and the shareholders of course.
It should be a very exciting time going forward.
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