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Gold/Mining/Energy
FECOF, FEP and Philex Companies Discussion
An SI Board Since December 2011
Posts SubjectMarks Bans Symbol
11 3 0 FECOF
Emcee:  sense Type:  Moderated
FECOF is Forum Energy Resources a Vancouver traded company whose primary asset is a significant percentage shareholding in Forum Energy, which trades as FEP on the AIM. Both FECOF and FEP are majority owned by Philex Petroleum, which was recently listed by introduction in the Philippines as a distribution from parent company Philex Mining, the largest locally owned gold miner in the PI.

Forum's assets include on shore and off shore oil and gas exploration leases in the Philippines, most notable among them being an almost 70% interest in SC72, on which they're completing analysis of a large area of new (2011) 3-D and 2-D seismic. It is expected the results will be reported out, soon. Parent Philex has committed to funding the SC72 exploration effort through the first two holes. Estimates of the potential value in place are huge, ranging from 3 TCF already proven in one prospect area, to 20 TCF potential within the prospects within the area of the SC72 lease. It is widely expected that the first find in SC72 will prove to be larger than Shell's Malampaya development.

Risks include that the Chinese have been saber rattling, claiming the PI drilling within PI territorial waters will somehow be an insult to China's claims of sovereignty over waters well inside the PI's national boundaries.

Upside includes that SC40 is another lease holding that has production commencing, along with electricity production from natural gas being produced in place and moved by a pipeline to the generating facility... which should begin to result in increased revenues for FEP in the current period (4th Q 2011) or "soon".

It's hard to understand FECOF without understanding the relationships between the various Philex companies, and without understanding the geology of offshore oil and gas, and the geopolitics of the relationships between the U.S., the PI, the ASEAN member states and China.

This is an interesting opportunity for patient investors... who focus on facts and understand the timelines in which value development actually occurs. The PI government say they expect finds made in SC72 will begin production before Malaypaya runs dry... so, within the time period before another decade passes. If you can afford to wait and see what happens over the next decade, FECOF might be a useful holding.

FECOF tends to be significantly undervalued relative to FEP while FEP itself tends to be undervalued relative to the industry and peers on the AIM, and relative to comparable interests in Philex Petroleum, which is currently (late 2011) trading at roughly 10X the value of their FEP interest... so, along with the structural issues and the geopolitics, there are issues of a range of market variables and opportunities for arbitrage to consider... also making FECOF perhaps one of the more interesting stocks there is to follow...
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ReplyMessage PreviewFromRecsPosted
11 China's assertiveness hardens Malaysian stance in sea dispute news.yahoo.cosense-2/27/2014
10US blames China for rising tensions in South China Sea ft.comsense-2/10/2014
9abs-cbnnews.combalaw-1/11/2014
8Wow. I'll say...sense-4/28/2012
7We finally received an update on last years seismic survey! Take a look at thisfutrcash*-4/25/2012
6This is a bit outside the box for FECOF... but, interesting because of that... sense-1/12/2012
5Nice find. It is an interesting read... particularly for the element in the polsense-1/11/2012
4Some Interesting discussion regarding geopolitical maneuvering and positioning rfutrcash*-1/10/2012
3I think it is that straightforward enough... that Shell's changing interest sense-1/5/2012
2"Agreement" and "control" being two different things ? The sense-12/28/2011
1In attempting to properly evaluate the hidden and tangible value of FECOF -- Afutrcash*-12/28/2011
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