MGX - MGM energy corp (TSX)

MGM Energy Corp on Discovery channel

Discovery channel has a new series should be interesting.

MGM is a junior energy company based in Calgary with a huge stake in Canada’s Far North. With exploration rights to more than one million hectares of land in the Arctic, there’s nothing junior about its plans. To date, MGM has risked $140 million searching for natural gas in one of the most extreme environments in the world. This year it will drill three gas wells north of the Arctic Circle in an icy desert where temperatures plunge to – 70 °C and winter storms can be deadly.

Energy companies have long suspected that the Canadian Arctic is a treasure chest of gas reserves, but few have taken the gamble. The extreme conditions and difficulty of drilling thousands of kilometres from a major city make for staggering costs. And in a business where 4 out of 5 wells drilled are a bust, the prospects are too risky for most companies.

Despite the risks and the challenges, MGM is pouring $250,000 a day into gas exploration in the Arctic. It’s playing the long game, buying up exploration licences now and betting that the world’s thirst for energy will eventually deliver a big payday for their Arctic gamble.

Series premiere on Discovery channel Tues Jan 5, 10 pm EST.
Licencetodrill.ca

Might those politicians in Ottawa with their extended two month vacation look fondly upon Canadian investment dollars being spent in the high arctic in lieu of reinforcing Arctic sovereignty? How about targeted tax credits as an incentive?

Scotia with the 500 share program sell, whenever these types of sells show up it puts alot of pressure on the stock as the 500 shares show up on the ask and if they arent hit within a minute they automatically hit the bid. Incentivizing people to leave orders at the bid and not even think of hitting the ask. This is what happened today and taking IFR down with it

Arctic gas is viewed by many now as a long ball game mainly due to the following factors:

Massive Shale gas discoveries in the USA and Canada and technology to exploit these shale gas deposits economically has flooded the market with cheap gas.

Gas glut has also been created with more cheap liquifed gas entering USA markets from Middle East.

The cost of getting gas out of the Arctic is not economic at current gas price.

Regulatory juggernaut in the Arctic is timely and time is money in the gas extraction business.

MGM did have the right idea but their timing was off and with Encana selling out in the north to pick up gas properties closer to the market, it appears that they understood the fact that much of the resources in the Arctic are stranded.

Also factor in the world economic situation which has reduced consumption and fueled a move towards alternative energy.

All of these factors do not bode well for MGM but gas from the Arctic may have a couple of cards left: Soveignty, National interest (from a clean energy fuel perspective - use the gas for electricity generation and shut down the coal plants that are polluting and spewing toxins), develop a resource opening corridor to the Arctic to secure supplies of energy to the south, economic stimulation by creating mega projects that use North American resouces to construct.

From and economic perspective...it is not looking good for the development of Arctic gas or oil resources...even the Russians are shelving projects in their arctic regions.

Right now I would short MGM

MGX proposing a drill program in NWT for February, 2011.

Should boost the SP as it has laggered considerably.

Do you have a link to the story? I couldn't find anything on this..

The following info is from an NR on MGM's website. I also check the SLWB regulator and MGM has an application in, it is the only one for 2010 so I am sure the review board will have time to review it and give it approval but you never know with them; however, since the area has not seen any significant work there is a strong likelihood that we will hear an announcement fairly soon on the application.

Lots of good reasons to get in on the bottom of this play now:

Low SP, lots of share capital can help liquidity and push SP up
Stable to rising price of oil
MGM property close to an existing pipeline infrastructure so no stranded oil
Drill rig and equipment close by
First Nations on side with project
High potential for oil or gas in the area
Project will be funded by sale of SDL asset



MGM ENERGY CORP.
Announces Sale of 20% of Umiak SDL 131
for $30 million to KOGAS Canada Ltd.

MGM Energy Corp. (“MGM Energy” or the “Company”) announced today that it has entered into an agreement
with KOGAS Canada Ltd. (a wholly owned subsidiary of Korea Gas Corporation) for the sale of 20% of Umiak
SDL 131 for $30 million. The sale price will be paid $20 million on closing and $10 million upon the decision to
construct the Mackenzie Valley Pipeline or any other project to commercialize production from SDL 131. The sale
is subject to normal closing conditions, including Korea Gas Corporation board approval and any necessary
regulatory approvals. The board of directors of MGM Energy has approved the transaction. The transaction is
expected to close by February 2011 and is subject to a right of first refusal.

As disclosed in MGM Energy’s 2009 Annual Information Form, MGM Energy’s net mean contingent plus
prospective resource estimate for its 60% interest in Umiak SDL 131 is 328 bcf. The sale of 20% of SDL 131
represents a sale of mean contingent plus prospective resources of 109 bcf, representing approximately 12% of
MGM Energy’s current net mean contingent plus prospective resource base of 887 bcf. Based on currently
expected activity levels, proceeds from the sale will be sufficient to fund MGM Energy’s capital and operating
expenditures through into 2012.

MGM Energy also announced that, subject to receiving necessary regulatory approvals, it will be proceeding with
the drilling of an oil prospect in the Great Bear River area. The well is expected to spud early February 2011 with
a total projected cost of approximately $8.0 million gross, or $4.0 million net to MGM Energy.

MGX will be a good one to watch over the next few weeks to see if they get their permits for their drill program. If they do the stock should appreciate from its low and when the drill starts turning speculation should drive the share price up.

With the price of oil gaining strength and the fact that MGX's proposed property is located next to a pipeline that is not pumping at full capacity, means that if MGM connects a good oil deposit, they can get it to market.

But they have to connect a good oil deposit and the only way to do that is to drill.

Keep an eye on MGX over the next few months as this firm has the experienced management, funds to drill and excellent prospects.

MGX starting to show some interest. Yesterday's volume at 4.1M shares traded. Market is anticipating MGX's Land Use Permit Application and forthcoming drill program which is targeting oil in an area of good potential with key infrastructure in place.

Interest continuing to build for MGX with SP holding steady in the .19-.20 range but if this company gets its LUP and starts its drill program in a highly prospective location, the SP could rise rapidly.

Will be keeping a close eye on this one. Continuing to accumulate at this price.

http://www.canadianbusiness.com/mark...ntent=b5624391

Federal government will approve Mackenzie Valley pipeline: CBC report

The pipeline has been approved, another big step. The company is drilling now and they also have interests in the Kitimat gas project.

I have been watching this one for a couple years and never really liked it until recently. Still risky but they have allot of gas reserves, and if their oil well hits in February this stock could really jump!

MGX starting to get some recognition, up a bit today on better volume. The announcement of the drilling permit is highly anticipated to be out soon, this should propel the stock up but what is really interesting about this drill program is the wild cat status and being near potential hydro-carbon resources there is a good likelihood of the company hitting oil or gas....if they connect oil, they are also located very close to a pipeline infrastructure. MGX looking good over the next few months as a speck play but if they connect, this could be a 10 bagger!

MGX definitely on its way up. We should be hearing news on whether or not they get their drill permit soon.

As soon as they obtain it, they will start the trucks and haul the rig to site and it will not take them long to drill a shallow well in that area and I am sure all the necessary casing, cement, drill rig, camp, caterers, etc., are ready to go as Norman Wells is one of the oldest oil fields in Canada and has been pumping barrels longer than most other fields in Canada so they have a ready supply of services and supplies to drill a hole like what MGX is proposing.

Let hope MGX gets that permit to drill soon so this stock can ride up to new 52 week high and beyond if they connect oil....have to remember that if they connect with oil they are right next to a pumping oil pipeline which is in need of being topped up to its capacity of 30Plus Thousand barrels per day.

Hopefully we hear news on the permit before the end of this week.

Stockhouse posters say drill permit was issued to MGM but I have not seen it posted by the regulator yet nor has an NR been posted on MGMs website.

If they did get the permit we would likely see a big spike up in volume and SP. Still waiting for confirmation on whether or not they received their drill permits. Better get it soon as weather will be an issue if they don't hustle. Climate Change in the Mackenzie Valley is occuring on a grand scale in the past ten years. It is one of the areas of the world experiencing much warming.

I have heard that MGX has their drill permit, that they are on location and may or may not have spudded but the interesting thing is, they have not put out any NRs yet.

 

Makes me wonder what their strategy is. Perhaps it is to keep price down until others load up, problem with this is that the volume is very low in trading so rule this out.

A lot of people got in on this one at much higher levels and insiders hold a whack of MGX. I understand that there is a Real Life TV crew on the site as well doing an Arctic Drilling Reality Show. If this is true it is another way for the firm to extract capital.

 

Anyhow, I will continue to accumulate at anything under .24 because I do not think this one is going to stay at this level for long and any 10% gain for me from the .23 level is cash in the pocket and 10% is better than a loss, but i will exercise my strategy to maximize returns.

 

GLTA

NEWS RELEASE: MGM ENERGY CORP.
Announces Results of Great Bear River Well

 

Calgary, Alberta – MGM Energy Corp. (“MGM Energy”) announced today that its well in the
Great Bear River area (Windy Island J-39) in the Central Mackenzie valley did not encounter
commercial quantities of hydrocarbons and, as a result, MGM Energy has elected to abandon
the well.

 

“We are disappointed with the result of the Windy Island J-39 well. We knew that it was a high
risk wildcat exploration well, however, because it was an oil prospect close to an existing
pipeline and a potentially large structure, it was important to drill the well.” said Henry Sykes,
President of MGM Energy. “We will continue to focus on oil exploration prospects in the Central
Mackenzie Valley, close to existing infrastructure.”
 

This company was featured on License to Drill at TV show on the Discovery Channel, it gave good insight into their operations - http://licencetodrill.ca/