Mike Schaeffer s Favorite CBM Company
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Mike Schaeffer's Top Pick in Coalbed Methane
Pacific Asia China Energy: A Dream Investment Opportunity
Overview
In the May 23rd edition of Energy and Capital, renowned coalbed methane expert Mike Schaeffer revealed his top stock pick: Pacific Asia China Energy (TSX: PCE). Schaeffer describes this company as a "dreamboat," confident in its potential and undervaluation.
Key Insights
Schaeffer is known for his keen eye in identifying promising CBM opportunities before they soar. His recommendation has already resulted in a significant rise in Pacific Asia China Energy’s stock, fueled by anticipation of successful drilling outcomes.
Drilling Success
Schaeffer was impressed by the initial drilling results. Pacific Asia China Energy analyzed twenty coal samples across nine seams, discovering unexpectedly high gas content. In just six days of a planned 60-day drill, they confirmed an estimate of 5.2 trillion cubic feet (TCF) of gas, suggesting a potential for much more.
Understanding the Metrics
Sproule International, a Calgary-based firm, evaluated this potential. They are leaders in assessing the economic viability of global CBM projects. To put it simply, 1 TCF of gas could equate to approximately $1 billion in market capitalization. This valuation underscores the significant potential of Pacific Asia China Energy.
Market Comparisons
Schaeffer compared Pacific Asia China Energy’s potential to Great Eastern Energy, an AIM-listed company with a methane resource of 1.4 TCF and a market cap of over C$308 million. Pacific Asia China Energy, with nearly four times the resource, currently has a market cap only 30% of that. By these metrics, the company is starkly undervalued.
Leadership and Expansion
On May 3rd, Pacific Asia China Energy announced new leadership appointments: Dr. David Marchioni as Vice President of Exploration and Tunaye Sai as President. Both were present during the drilling in China, emphasizing their commitment. Dr. Marchioni, a respected figure in CBM circles, was particularly interested in the economic viability of the Guizhou property.
Conclusion
Mike Schaeffer confidently states that Pacific Asia China Energy is poised to become a leading CBM company in China. This bold statement is particularly compelling given the competition, which includes giants like Chevron-Texaco and Conoco-Phillips.
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