Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


NPV of Oil Concessions Increases in Update
Research Report

Share on Stocktwits


A revised risked contingent resource report reflects a 20% increase in value for this heavy oil asset in Alberta, Canada, noted a Research Capital Corp. report.

CanAsia Energy Corp. (CEC:TSX.V) released an independently prepared, updated contingent resource report for the Sawn Lake asset in Alberta, reported Research Capital Corp. analyst Bill Newman in a Feb. 27 research note. The Canadian oil and gas company's interest in these 27 sections of heavy oil sands leases is via its 88.2%-owned subsidiary, Andora Energy.

"Sawn Lake represents a considerable resource," Newman wrote.

Notable Potential Return

Research Capital recommends CanAsia as a Speculative Buy and has a CA$0.50 per share price target on it. The target represents a 156% implied return for investors of the energy firm from its current share price of about CA$0.20.

Changes To Report

Sproule Associates, which prepared the previous resource report of March 31, 2022, updated it to reflect its revised commodity price deck as of Dec. 31, 2022, along with tax and project development plan changes.

In the updated version, the 2C risked contingent resource net to CanAsia remained the same, at 219,000,000 barrels, but the after-tax net present value discounted at 15% rose by about 20%. The new value is US$174 million (US$174M), or US$3.51 per share. Previously, it was US$146M, or US$2.92 per share.

Andora's interest is now valued at US$198M, up from US$165M.

Production Restart in 2024

The current plan for developing and restarting production at Sawn Lake calls for three phases to be carried out in 2023-2025.

The first involves refurbishing the facility, expanding the steam-assisted gravity drainage (SAGD) battery #1, and reactivating the existing SAGD well pair. The gross cost for this work is about US$3.1M. At this point, production could restart and is targeted for 2024. Production then would be increased to a total of 620 barrels per day (620 bbl/d).

In stage two, slated for 2025, a second SAGD well pair would be drilled, at an estimated gross cost of US$10M, and production increased to about 1,240 barrels per day (1.24 Mbbl/d).

The third stage calls for adding three more SAGD well pairs (at about US$37M in cost) and taking production higher, to 2.891 Mbbl/d.

With this timeline, peak production of at least 20 Mbbl/d would happen around 2038.

"Full development includes the construction of four additional batteries utilizing Andora's proprietary produced water boiler technology," wrote Newman.

Want to be the first to know about interesting Oil & Gas - Exploration & Production investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. Subscribe

1) Doresa Banning wrote this article for Streetwise Reports LLC. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: CanAsia Energy Corp. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. 

Disclosures for Research Capital Corp., CanAsia Energy Corp., February 27, 2023

Analyst Certification: I, Bill Newman, CFA, certify the views expressed in this report were formed by my review of relevant company data and industry investigation, and accurately reflect my opinion about the investment merits of the securities mentioned in the report. I also certify that my compensation is not related to specific recommendations or views expressed in this report. Research Capital Corporation publishes research and investment recommendations for the use of its clients. Information regarding our categories of recommendations, quarterly summaries of the percentage of our recommendations which fall into each category and our policies regarding the release of our research reports is available at or may be requested by contacting the analyst. Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

Relevant Disclosures Applicable to Companies Under Coverage: Relevant disclosures required under IIROC Rule 3400 applicable to companies under coverage discussed in this research report are available on our website at

General Disclosures: The opinions, estimates and projections contained in all Research Reports published by Research Capital Corporation ("RCC") are those of RCC as of the date of publication and are subject to change without notice. RCC makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; RCC makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained therein and accepts no liability whatsoever for any loss arising from any use of or reliance on its Research Reports or its contents. Information may be available to RCC that is not contained therein. Research Reports disseminated by RCC are not a solicitation to buy or sell. All securities not available in all jurisdictions.

Company Specific Disclosures: Within the past 12 months, Research Capital has provided investment banking services to the issuer. The Analyst currently owns or is short shares of the issuer, which represents less than 1% of shares outstanding.

Potential Conflicts of Interest: All Research Capital Corporation ("RCC") Analysts are compensated based in part on the overall revenues of RCC, a portion of which are generated by investment banking activities. RCC may have had, or seek to have, an investment banking relationship with companies mentioned in this report. RCC and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned in our Research Reports as principal or agent. RCC makes every effort possible to avoid conflicts of interest, however readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.

RC USA INC.: Information about Research Capital Corporation’s Rating System, the distribution of our research to clients and the percentage of recommendations which are in each of our rating categories is available on our website at The information contained in this report has been drawn from  sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in providing it does Research Capital Corporation assume any responsibility or liability. Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part without the express permission of Research Capital Corporation. US Institutional Clients – Research Capital USA Inc., a wholly owned subsidiary of Research Capital Corporation, accepts responsibility for the contents of this report subject to the terms and limitations set out above. US firms or institutions receiving this report should effect transactions in securities discussed in the report through Research Capital USA Inc., a Broker – Dealer registered with the Financial Industry Regulatory Authority (FINRA).

Want to read more about Oil & Gas - Exploration & Production investment ideas?
Get Our Streetwise Reports' Resources Report Newsletter Free and be the first to know!

A valid email address is required to subscribe