Major News Release for GeoPetro Resources – Highlighting Lokern, CA Project

GeoPetro Resources Corporation (NYSE AMEX: GPR) released an overview of their Lokern, California property today which outlined the prospects for their 100% working interest in 1,280 acre located in Kern County. This is a particularly interesting energy prospect as it is in close proximity to the recently announced significant new discovery made by Occidental Petroleum (NYSE: OXY), one  deemed by OXY to be the largest new energy discovery in California in the last 35 years.

GeoPetro expects that a well will be drilled, either by themselves or through a farmout arrangement with a third-party, to a depth sufficient to test the Stevens and deeper Carneros zones sometime in 2010. At this time the Company is in the process of permitting up to three drilling locations on the property.

The Lokern leasehold is in close proximity to the recent hydrocarbon discovery announced by Occidental Petroleum in July 2009. GeoPetro’s prospect is on trend with, and located immediately north of the prolific Elk Hills and Tule Elk fields, which have combined reserves greater than 1.5 billion barrels of oil equivalent.

 In the release GeoPetro announced that the primary exploration objectives at this property are the Miocene Stevens formation and the deeper Carneros member of the Temblor formation. The secondary objectives include the Miocene Reef Ridge and Pliocene Etchegoin sands.

GeoPetro Resources President and CEO, Mr. Stuart Doshi commented in the release:  “California has always been on our radar screen due to its large potential associated with the high-quality, oil-prone reservoirs present in the region and our belief that the deeper potential in the San Joaquin Basin is significantly underexplored. We were able to assemble the land position in our Lokern Project with a modest investment well ahead of Occidental’s announcement. We believe industry interest in this area, on the heels of the recently announced Occidental discovery, should allow us to secure an industry partner or otherwise obtain the necessary capital to undertake drilling and evaluation of our acreage position. Subject to permitting, this should take place next year.

“Pursuing a diverse portfolio of both oil and gas prone reserve targets has been a Company strategy since inception. Adding crude oil potential, or possibly condensate rich natural gas, to our resource mix may help mitigate commodity price risk and may further provide a separate growth vehicle that complements our other properties.”

This is potentially huge news for GeoPetro and confirmation of this property’s value via a successful test-well could very well be a “Company Maker” event – so we are quite excited about this announcement and see some very stong investment potential in GeoPetro at this time. We commented about GeoPetro’s outstanding list of highly prospective energy prospects in this blog last week and today’s release makes us even more bullish regarding both their near, and longer term prospects – especially in light of the fact that the Company is planning to take steps to materially increase production at their Madisonville natural gas project in East Texas during the first quarter of 2010.

The recent blog post on GeoPetro is located here, which we recommend reading as soon as possible if you haven’t already – and a link to today’s full press release is available here

Prospects for Natural Gas Create Huge Opportunity for GeoPetro Resources in 2010

GeoPetro Resources Company (NYSE-Amex: GPR) is a San Francisco based exploration and production energy company which is well positioned to benefit from a trend we see developing in the natural gas market. Over the past few weeks, natural gas prices have moved up quietly. The Henry Hub spot price is now just over $5.50 per mcf and spot prices in the Northeast are approaching $8.50 per mcf. Admittedly, these price increases reflect freezing temperatures across the country, including this past weekend’s blizzard that ravaged much of the East. Significantly, the recent price escalation shows just how quickly natural gas pricing can change. On top of which we believe there are several near and mid-term fundamentals which could move natural gas above $7.00 per mcf for the foreseeable future, at which price it becomes impossible to ignore natural gas producers such as GeoPetro Resources.

Over the last 30 to 60 days, there have been two very big bets placed on the prospect of rising energy costs in the United States. The first was the purchase of Burlington Northern Santa Fe Railroad by sage investor Warren Buffet. At $26.5 billion, it was his largest transaction ever. And while this is principally a bet on the economic recovery of the U.S., Buffet did state that one of his reasons for this acquisition was BNI’s cost-effective way of moving goods. Attention to distribution will be even more pronounced in a rising cost energy environment, remember gas above $4.00 per gallon and what that did to the cost of moving goods across the country by truck.

The second big deal was Exxon’s acquisition of XTO Energy in and all stock deal valued at approximately $41 billion. XTO has a large percentage of its energy holdings in unconventional resources known as shale gas basins, which require natural gas prices of $6.00-$7.00 per mcf in order to be economical.

GeoPetro Resources Due Diligence Luncheon (Part I)

Last Wednesday, we had the opportunity and privilege to host a due diligence luncheon for GeoPetro Resources Company (NYSE-Amex: GPR) in what has come to be known as America’s Finest City, San Diego, California.  And we decided that it would be a heck of a lot cheaper for us to bring the Company to you than to bring you to the Company.  To this end, we are pleased to provide you with Part I of a two part series featuring Eric Doshi and Chris Steinhauser of GeoPetro Resources.  Eric and Chris do a terrific job discussing the Company’s overall strategy as well as the individual strategy for each of its “Company Maker” projects.  Click on the picutre below to watch the video.

GeoPetro Raises $3.8 Million in Series B Preferred

GeoPetro Resources Company (NYSE Amex: GPR) announced today that between August 3, 2009 and October 9, 2009 the Company raised $3,792,250 from the placement of 5,056,328 shares of Series B Convertible Preferred Stock. The Series B Preferred was sold for a purchase price of $0.75 per share and pays an annual dividend of $0.06 per share (8%) to investors.  The Series B Convertible Shares are redeemable by the Company for cash two years after the issuance date for the face amount plus any accrued interest payable at the time of redemption. The shares are convertible by the holder at any time at the rate of $0.75 per share and convert automatiacally in the event that GeoPetro shares trade above the price of $1.50 for ten consecutive trading days. 

This is another excellent announcement from GeoPetro and gives the Company a nice cash position and solid base from which they can continue to grow their ongoing gas production at the Madisonville, TX property – and look to advance some of their additional properties/projects including their Lokern, California property which is located adjacent to Occidental Petroleum’s recent major oil discovery in Kern County, CA – which OXY believes is the most significant energy discovery in California in the last 35 years.

Oil and gas have been on the move lately with oil testing the $75 per barrel rate and natural gas strengthening back to hover right around $4 per mcf on a cash basis with the December delivery NYMEX strip price at $5.52 per mcf. A number of energy analysts are predicting a return to higher energy prices in 2010, which could make both GeoPetro’s production and development properties grow significantly in value from here.

To view the full 8-K release on Edgar click here

GeoPetro Resources IPAA Presentation Now Available

GeoPetro Resources’ (NYSE AMEX: GPR) President and CEO, Mr. Stuart Doshi addressed the general assembly at the 2009 IPAA OGIS Conference (Independent Petroleum Association of America – Oil and Gas Investement Symposium) this morning at 8:00 am. During the roughly 25 minute presentation, Stuart reviewed GeoPetro’s current business condition and future exploration/development plans at their five primary oil and gas target project areas which include:

• Madisonville, TX – where the Company owns and maintains a midstream gas treatment facility and producing natural gas field. Projected production to 30 mmcf/day with addition of 2 shut in wells. Also, 18,000 foot exploratory well planned for 2010 to test Bossier Deep play, which has proven to be prolific in the region with 40 to 90 mmcf per day producers put in by Encana.
• Lokern oil project, located in Kern County, CA directly adjacent to the recent major oil discovery (150 to 250 mmbo) announced by Occidental Petroleum (NYSE: OXY). A Stevens/Caneros test well is planned for 2010. 
• Natural gas target in the Cook Inlet region of Alaska (where natural gas is getting a healthy premium to lower 48 prices, recently as high as $8 to $9 per mcf).
• Natural gas target in Swan Hills, Alberta, Canada. A Devonian reef well is planned for 2010.
•  Bengara II field in Indonesia – where the Company has a 12% working interest carried thru $60 million in development capital from CNPC.

To hear the full presentation (which is accompanied by the Company’s ppt presentation) click on the graphic below:

GeoPetro Resource’s Lokern Property Borders OXY’s 150-250 Million Barrel California Oil Discovery

GeoPetro’s California Property Borders OXY Discovery – Please find below a link to the most recent corporate presentation from GeoPetro that we just received yesterday. Please take special notice to page 19 that shows the proximity of their Lokern property (Kern County) to the recent mammoth oil discovery by Occidental Petroleum (NYSE:OXY). You couldn’t be any closer to this discovery than GeoPetro is. We knew this was close, but didn’t know until we saw this report yesterday just how close this property is to ground zero of this 150 to 250 million barrel discovery.

GeoPetro Resources Corporate Report – September 2009

GeoPetro is targeting a 75 million barrel oil field at this property with a Stevens/Caneros test planned for 2010.

GeoPetro Resources Company (NYSE AMEX:GPR) will be presenting at this year’s IPAA OGIS (Oil and Gas Investment Symposium) being held at the San Francisco Palace Hotel on September 29 thru October 1, 2009.

GeoPetro will be presenting to the full audience on Tuesday, September 29th at 8:00 am. GeoPetro will also have two break-out sessions where attendees can meet with their management team in an informal setting and discuss GeoPetro’s growth strategy going forward in detail. Those break-out sessions are scheduled for September 29th and 30th between 10 and 11 am and will be held in the Napa room.

Southern California Broker/Manager Meetings in October 2009 Also, GeoPetro Resources will be conducing due diligence meetings with current and prospective investors, brokers and fund managers in the Southern California area on October 21 (San Diego – Luncheon and 1×1 meetings) and October 22 (Irvine/Newport – Luncheon and 1×1 meetings).

If you would like to attend one of these luncheons or schedule to meet with GeoPetro’s team during their Southern California road trip just send an email to info@babybulls.com with “GeoPetro Resources” in the subject line along with your contact information.

Fact or Fiction: “Ain’t No Cure for the Summertime Blues”

According to Alan Jackson’s hit song “Summertime Blues” which can be found on his 1995 Greatest Hits Collection, there “ain’t no cure for the summertime blues.”  We all have fond memories of summer, going to the beach, staying up late, a summer crush, no school, family vacations, and simply just being a little more carefree.  Labor Day marks the end to summer and the start of fall, the weather tends to cool down a bit, kids are back in school, and summer starts to become a memory. 

For some it is a difficult transition.  For us, it was a walk on the beach.  For starters, gold powered through the $1,000 mark and silver was fast approaching $17.  More specific to BabyBulls, our clients have hit the ground running this Tuesday morning after Labor Day.  Achieving returns similar to those posted by our clients companies is one sure way to reduce, if not eliminate entirely, those summertime blues.  We believe there is more good news to come between now and the end of the year. 

• Avanti Mining Inc. (TSX-V: AVT) – $0.18/share, an increase of nearly 100% from our initial profile price.
• Biomoda, Inc. (OTC BB: BMOD) – Reached a high of $0.40/share, an increase of 48%.
• Biopack Environmental Inc. (OTC BB: BPAC) – Trading at $0.40/share, an increase of 5.3%.
• Dejour Enterprises Ltd. (NYSE-Amex: DEJ; TSX: DEJ) – Trading at $0.33/share, an increase of 10%.
• ECU Silver Mining Inc. (TSX: ECU) – Trading at $0.58/share, an increase of 3.6%.
• GeoPetro Resources Company (NYSE-Amex: GPR) – Reached a high of $1.14/share, an increase of 48%.
• Great Panther Resources (TSX: GPR) – Reached a high of $1.25/share, an increase of 78.6%.
• Nayarit Gold Inc. (TSX-V: NYG) – Trading at $0.55/share, an increase of 7.84%.
• Silver Dragon Resources Inc. (OTC BB: SDRG) – Reached a high of $0.30/share, an increase of 50%.
• Victoria Gold Corp. (TSX-V: VIT) – Trading at $0.40/share, an increase of 14.3%.

GeoPetro Resources to Present at San Francisco IPAA Oil and Gas Conference in Late September

GeoPetro Resources Company (NYSE AMEX:GPR) will be presenting at this years IPAA OGIS (Oil and Gas Investment Symposium) being held at the San Francisco Palace Hotel (full schedule at: http://www.ipaa.org/meetings/pdf/092009OGISSanFranSchedule.pdf ) on September 29 thru October 1, 2009. GeoPetro will be presenting to the full audience on Tuesday, September 29th at 8:00 am. GeoPetro will also have two break-out sessions where attendees can meet with their management team in an informal setting and discuss GeoPetro’s growth strategy going forward in detail. Those break out sessions are scheduled for September 29th and 30th between 10 and 11 am and will be held in the Napa room.

This energy conference is arguably one of the most well attended gatherings of institutional investors and analysts on the west coast. This venue gives GeoPetro a tremendous opportunity to update the investment community on their ongoing oil and gas production and exploration projects, especially their Lokern, California property, which is located in Kern County, CA. In July 2009 Occidental Petroleum (NYSE:OXY) announced the discovery of a giant new oil field in Kern County that has the potential to be in the neighborhood of 150 to 250 million barrels of recoverable oil (and gas equivalent). Occidental CEO, Ray Irani has characterized this new discovery as “the largest new oil and gas discovery made in California in more than 35 years.” – and if this field proves to be contiguous below the GeoPetro acreage (and this is certainly not known at this time), could create a significant value increase in GeoPetro’s property.

Please contact Torrey Hills Capital at 858 456-7300 if you are planning on attending the IPAA Conference and would be interested in setting up a face to face meeting with GeoPetro’s management team during the show in San Francisco.

For more information regarding GeoPetro Resources go their corporate website at: www.geopetro.com

GeoPetro Focuses on Madisonville in 2009, So Far So Good

We were first introduced to GeoPetro Resources Company (NYSE-Amex: GPR) more than a year and a half ago at an IPAA Oil & Gas Investment Symposium in Hollywood, Florida.  Our interest in GeoPetro at the time was based in part on the Company’s producing assets in Madisonville, but also on the Company’s projects in Alaska, Indonesia, Alberta, and California. 

Two years ago, oil prices soared to more than $140 per barrel and natural gas at the time was trading above $13.00 per mcf.  At these prices, GeoPetro’s assets in Madisonville were profitable and cash flow positive and each of its other projects around the world were destined to become “Company Makers.”

Late last summer, GeoPetro was preparing to raise capital when the global recession hit.  The prices of oil and natural gas dropped significantly, although have shown mild support recently.  At the time and as a result of falling commodity prices, the Company sought to initiate a new strategic plan, to focus on Madisonville in 2009. 

GeoPetro’s Madisonville project, which is located in Madison County, Texas approximately 100 miles north of Houston, is made up of four wells, Fannin #1, Magness #1, Mitchell #1, and Wilson #1.  At the beginning of 2009, Fannin #1 and Magness #1 were producing 6 mmcf/day, which rate increased to 11 mmcf/day beginning in June 2009 due to the lowering of inlet pressure at these two wells.  2009 plans for the Mitchell well include the installation of a submersible pump, which is expected to result in production of an additional 10 mmcf/day beginning in November 2009.  Frac plans for the Wilson well in the fourth quarter of 2009 are expected to result in production of an additional 9 mmcf/day beginning in Q1 2010.  Based on the Company’s completed and planned improvements at Madisonville in 2009, total production from all four wells is expected to increase from 6 mmcf/day in Q1 2009 to an estimated 30 mmcf/day in Q1 2010.  This would result in an increase in production of 24 mmcf/day or 400% over a one-year period. 

To accommodate the Company’s planned increase in production, GeoPetro acquired a gas treatment plant in December 2008 in exchange for shares of GeoPetro’s common stock, assumption of certain debt, and a cash payment which valued the transaction at approximately $10 million.  The Company was familiar with the plant because it was the same plant which was already treating the Company’s gas.  The plant was acquired from Madisonville Gas Processing LP, which invested more than $25 million on the original 18 mmcf/day capacity and another estimated $50 million during 2006 and 2007 to increase capacity to roughly 68 mmcf/day.  GeoPetro expects to complete this capacity expansion by the end of 2009. 

The effect of the recession has slowed development for many junior energy companies, but not for GeoPetro, whose Madisonville project has expanded nicely.  In addition to Madisonville, the Company plans to (i) in Q4 2009, drill an 18,000 foot exploratory well at Madisonville to test 6 prospective formations below where other operators are producing today; (ii) in Q2 2010, operational activity in Alaska on 11,500 acres to a depth of 8,000 feet; (iii) in 2010 or 2011, drill a 15,000 foot test well in California, not too far from a recent Occidental Petroleum discovery; (iv) in 2009, 2010, and 2011, continue operations in Indonesia where the Company’s joint venture partner has committed up to $41.3 million for development purposes; and (v) in Q1 2010, begin drilling at the Swan Hills Project in Alberta, Canada.

The operational enhancements made by GeoPetro this year have not gone unnoticed as the Company’s share price rebounded from a low of $0.21 in March to a high of $0.74 in June.  As a result of what we believe was some profit taking, the stock has pulled back from those highs and established a new floor price in the mid 40 cent range.  With 36.75 million shares outstanding, 25% of which is held by beneficial owners and management, the Company has effectively managed its capital structure.

As we begin the second half of 2009, news stories to watch for include the impact on revenue, cash flow, and profitability resulting from increased production and the expansion of the gas treatment plant.  In 2010, we look for continued development of GeoPetro’s other “Company Maker” opportunities throughout the world.

With everything that GeoPetro has accomplished over the last 12 months, including the acquisition of the gas treatment plant and the increase in production, the Company is better positioned today than it was when we first started following it.  A little more than a year ago, the stock traded as high as $4.29, a return to which would provide investors with a return of nearly 800%.  800% may be too much to ask for in today’s market, but for patient investors, GeoPetro is a stock which could provide a solid return.

Worst of Natural Gas Bear Behind Us?

Mike Paulenoff, author of the MPTrader.com published a brief report on the natural gas market yesterday, with the conclusion that the worst of the natural gas bear market might be behind us. Here is an excerpt from the article with a link below for the full article. “The natural gas inventory figures came in more or less as expected, which in this market is a victory!  Otherwise, the tame inventory data really should not be a surprise.  If we are to believe what my near and intermediate work is telling us, the worst of the gas bear market is behind us, and now we are in the arduous “base-building” phase (measured in weeks) prior to a sustainable powerful upmove.” 

If this prediction holds true, it would reinforce the current futures strip pricing on NYMEX, which shows $4 and $5 per mcf prices over the near to mid term contracts, and would be a great value driver for energy E & P groups that are developing North American based natural gas reserves.

Read more