Permex Petroleum (OIL.CSE; OILCF.OTCQB) currently has a market cap of just C$10 million.

Yet it controls a pool of oil and gas reserves in Texas’ famed Permian basin worth almost US$200 million.

And in 2023, Permex is level set on closing that valuation gap with drilling that will begin converting those reserves to producing assets.

Dear Fellow Investor,

It’s the kind of valuation mismatch that you only find in the junior exploration sector.

In Permex Petroleum’s (OIL.CSE; OILCF.OTCQB) case, that would be the oil and gas exploration sector.

Thanks to the connections of its board and great timing, Permex finds itself with a substantial amount of oil and gas reserves bought at a time when the market was offering such resources at deep discounts.

Now, you have the opportunity to participate in Permex’s good fortune, as it looks to monetize its reserves through drilling and development.

The company currently sports a market cap of only C$10 million — but that could change quickly once the market wakes up to the value Permex is offering investors.

Proved Reserves With A PV10 Of $198 Million

It starts with a global proven reserve base of 9.2 million barrels of oil equivalent (“boe”).

Based on forecasted oil and gas prices, those reserves have a present value discounted at 10% (PV10) of US$198.6 million.

Add in the probable reserves, and the PV10 value rises to US$428 million.

As you can see, even just the PV10 for the proven reserves is many multiples of Permex’s current market cap.

Providing some 60% of those reserves is Permex’s flagship Breedlove project in Martin County, Texas.

Permex controls about 7,800 acres of land in Martin County, which is Texas’s second most prolific county for oil production.

Acquired for just $2,000/acre in October 2021, the Breedlove prospects sit over 12 contiguous sections of the core of the Permian Basin. And 98% of those properties are “held by production.”

“Held by production” or “HBP” is a provision in an oil and gas lease that allows a company to operate a concession in perpetuity as long as the concession produces a minimum paying quantity of oil or gas.

It’s a huge advantage for Permex and one that has it hard at work testing the leasehold area to exploit its reserves.

In September 2022, that work took the form of drilling on the Breedlove Field Prospect.

That field currently produces in the Clearfork formation at a depth of 7,000 feet. Management believes there are up-hole and down-hole possibilities for production in the San Andres and Spraberry formations.

Save

Not A Subscriber Yet?
Get Golden Opportunities For Free

Subscribe to our Golden Opportunities e-letter to receive timely market
updates from the Gold Newsletter research team, plus video
presentations by expert speakers from the New Orleans Conference
— and the Investor’s Guide to Gold and Silver — all at no cost!

CLICK HERE to start your subscription.

Huge Re-Rate Possible As Reserves Become Producing Assets

With first well completion at Breedlove expected soon, Permex appears to be on its way to realizing production from the project.

That production could start a virtuous cycle where drilling produces cash flow, then that cash flow funds both more drilling and, possibly, new acquisitions.

As it stands, the company owns prime ground atop the largest petro-producing basin in the United States.

Its total net acres of HBP oil and assets in West Texas and southeast New Mexico comes to 11,700, featuring a great mixture of development assets for sustainable growth and blue-sky projects for scale growth.

Drilling is ongoing on its Martin Country properties and, as stated, that could lead to cash flow in fairly short order.

The bottom line is this: Permex Petroleum has a PV10 value for its proven reserves of just under US$200 million and a market cap of just C$10 million.

Between a tight share structure and a clear plan to monetize those reserves, Permex Petroleum could be the junior industry valuation mismatch that reaps big time rewards for early investors.

CLICK HERE
To Learn More about Permex Petroleum Corp.