Oil and gold exploration is just that, exploration. Sometimes a solid find exceeds expectations, while in other instances that discovery proves to be a “dry hole” with less potential. This understanding is just the nature of the gold and oil exploration game. There is always a roll of the dice in these instances but there is also the chance of incredible returns.
Oromin Exploration Inc., an oil exploration and development company, works to locate and develop oil interests. Its current prospects are located in Argentina. From all recent independent reports, the company’s permit, relating to its CCyB-9 Santa Rosa exploration project, indicates a sizable find with solid upside potential. The company does indicate that there is still work to be done, but finds that the independent reports show a realistic potential for 131.5 million barrels of oil.
The independent report also sets realistic economic potential of $2.3 billion (using $42 per barrel) as a likely outcome where revenues are concerned. This, however, may seem low as oil prices have been depressed in recent months and could climb as conditions vary. With this in mind, the independent report does point out that the Canadian method of assessing the find was used. This method is widely accepted as the standard and sets out specific levels to call a find of mineral resources as a certain type of find. In this instance, the CCyB-9 Santa Rosa prospect is considered as an “undiscovered recourses” property.
The oil exploration market is at an interesting cross road. Last year’s massive run up in oil prices gave the industry a certain “bubble” mentality as the economy crashed. Nonetheless, the world’s economy is almost entirely dependent upon the commodity. Playing the strictly commodity oil play is a fairly dangerous game. Finding a company that has the potential for providing the product well into the future is less so. Oromin Exploration seems to have something and is in the process of testing it to confirm size and scope of the find. Oil is, and will be for the foreseeable future, the energy source to run the world. A solid find, if it proves out, should propel Oromin Explorations to greater heights.
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