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Energy Summary for Sept. 25, 2015

2015-09-25 20:56 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for November delivery added 79 cents to $45.70 on the New York Merc, while Brent for November added 43 cents to $48.60 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.10 to WTI ($32.60), up from a discount of $13.75. Natural gas for October lost 2.7 cents to $2.564. The TSX energy index added a fraction to close at 167.38.

Jeff Chisholm's Pan Orient Energy Corp. (POE) added nine cents to $1.29 on a somewhat heavy 79,300 shares. It has finished drilling the Akeh-1 exploration well at the Batu Gajah project in Indonesia and will now begin testing. The fact that it will begin testing suggests that the well found something, although Pan Orient did not mention any hydrocarbon shows or net pay. Investors seem intrigued but wary. Although geology is on their side (Akeh-1 is intended to offset a 2013 oil discovery made by a neighbour), history is decidedly against them. Pan Orient has been in Indonesia since mid-2008 and is still not a producer there. Its first well at Batu Gajah, drilled in 2011, found a bit of gas pay, but was ultimately abandoned as subcommercial. Three other wells soon joined the list of disappointments. At the nearby Citarum project, things were even worse. All this led to Pan Orient's decision in mid-2013 to reduce its exposure to Indonesia. It began heavily promoting its Thai assets (which have been producing, though not very reliably, since 2007) and its Alberta oil sands project, Sawn Lake (which faced delays but finally started production a year ago). The Indonesian assets were marketed to potential joint venturers. No deals ended up being closed on Batu Gajah or Citarum -- and Pan Orient will actually get rid of Citarum in less than two weeks, when the contract expires (good riddance) -- but Talisman Energy took an interest in the separate East Jabung project, which has not been drilled. It should see its first well in the second quarter of next year. Between that well and the soon-to-be-tested Akeh-1 exploration well at Batu Gajah, Pan Orient hopes that within months, it will finally be a producer in Indonesia. Even assuming success, the stock has a long climb back to its early 2008 high of nearly $16.

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