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By Peter Cole
On May 27th, George Soros – the legendary investor made famous by making $1
billion betting against the English pound in the early 1990’s - purchased 72.5
million units, consisting of one share and a half warrant, of the Petromanas (TSX-Venture:PMI)
at $.40 per unit.
PMI is an oil exploration company that has acquired rights to 6,500 km2 in
Albania. An independent geologist report indicates that Petromanas’ properties
have a potential 6 billion barrels of recoverable light crude oil.
George Soros is one of the world’s most successful investors. He knows how to
appraise stocks. And yet, PMI is currently selling at the same price Soros paid
just a few weeks ago.
Petromanas holds three on shore Production Sharing Contracts ("PSCs") with the
Albanian government.
Under the terms of the PSCs, Petromanas has a 100% working interest in six
onshore blocks (Blocks A, B, D, E, 2 and 3) that comprise more than 1.7 million
acres across Albania's Berati thrust belt.
Albania is a European Cinderella story, as foreign investment and GDP growth
ramp up.
In fact in 2009, the Albanian economy had the best growth rate in Europe.
Foreign investments have increased 59 percent in the last two years.
Petromanas' acreage lies within a proven hydrocarbon system. There are nine
existing oil fields within Blocks 2 & 3, including the largest onshore oil field
in Europe, Patos-Marinza, discovered in 1928, currently operated by Bankers
Petroleum (
TSX:BNK).
Previous operators have made big discoveries. In the 1990s, Shell and Coparex
acquired approximately 1,118 miles (1,800 kilometres) of seismic on these
concessions and discovered a deep under-thrust structure within the blocks that,
by their calculations, has the potential to contain a combined 820 million
barrels of recoverable oil.
Shell and Coparex suspended all exploration activity in reaction to extreme
unrest in Albania and the conflict in neighbouring Kosovo. That political risk
is now at an all time low.
PMI’s trading activity over the last week suggests that the discount to the
smart money may not last.
Trading volumes are up and there have been some big block purchases by
institutional investors.
In fact on Thursday July 8 the trading volume on PMI was 300% higher than
normal, and the stock moved 16% in one day.
Usually when retail investors follow the smart money, we have to pay higher
prices. This is a rare opportunity to get involved in an on-shore oil and gas
company at the same price as George Soros.
