# AOK - Austex Oil



## condog (24 October 2009)

Hi all

Who else is holding or closely watching developments with AOK....

With wells 1 & 2 producing my best estimates are they are now cash flow positivive at 80+ BOPD....... & with $5 M in the bank and drilling at $150K per well they present an amazing upside potential.....

They have dramatically increased their lease holds and are on track to becoming a fully fledged small to mid cap oil producer....

I already own Caranarvon and have enjoyed the profits of its spoils and right now I think AOK is set to be the next Carnarvon.

Whats your thoughts...


Disc - I do own the stock and certainly intend buying a hell of a lot more very soon.


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## condog (2 December 2009)

Released more great news yesterday with 100 BOPD flowing from Mayo #4

Annalysts say AOK's break even point was approx 80 BOPD  and 300 MCF of Gas pd. So just off this one well it would now appear AOK is has become an income producing proffitable Oil producer...

Check the facts yourself , but they also have oil prod of 200+ BOPD so far from other wells and Gas production of somewhere around 1000 MCF pd .....

On current share price investors are valueing 2P oil at approx $1.40 per barrell....  This would appear to be extremely conservative.....given most similarly immature producers are valued at $3-7+ per 2P BO.....

I cannot believe its been so over looked with so much upside potential and so much relative safety.....but on the flip side its great for me as I am acquiring significantly more and trading my cost base on its short term swings...

Disc - I presently own variable quantities of AOK....


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## condog (2 December 2009)

10% rise today thanks very much....cant believe you lot are ignoring this..

This thing has legs and oil to back it....

PS this aint ramping....Im just gob smacked that none of you have done the analysis or bothered to look at it.....


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## condog (4 December 2009)

Re tested highest point ever at 19c yesterday, up 46% for the week then retraced to 17c ..... Im up 38% for the week..... love it...Im not trading out though, as I truly believe this one is set to rocket ....Its completely under-discovered by the market and is now on my calcs a net oil producer, despite being priced as a speculative explorer...


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## condog (6 December 2009)

Up 40% for the week......  I should have put more in it and put it in the Dec competition......

although Ive got a cracker for the January comp thats set to go 300%+ in next few months....  Its all in place contracts signed , resources found, drilled, and welled plus flowing.....just that the market has failed to price it correctly....

Still cant believe no ones willing to discuss it or throw the comb over it in here........


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## dougo (9 December 2009)

condog care to share ur 'cracker'?

I too am impressed with AOK, only discovered it this morning. Churns low volumes and flies under the radar thats for sure. Not long till it gets an eye opening!


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## condog (10 December 2009)

dougo said:


> condog care to share ur 'cracker'?
> 
> I too am impressed with AOK, only discovered it this morning. Churns low volumes and flies under the radar thats for sure. Not long till it gets an eye opening!




Arrr you noticed that post ......NZO  known as New Zealand Oil and Gas
Has long contracts signed, major gas in Kupe with 15% interest....I estimated approx $70-81M additional net earnings...stack that on top of the current 33M and this thing seems set to go....I ran the numbers and with Kupe income I value it at around $3-$4 within 12 months.......  Do your own research and number crunching. seek expert advice. DO NOT buy based on my conversation, simply use this info to trigger you into researching the company....I really mean this....Disclaimer - yes i do currently hold this share and yes I do intend to sell half my holding if it doubles in price.

I was also going to mention ROL which I hold was likely to skyrocket on possible impending results. But i didnt get time it went up 73% in the first hour of trade.


More good news yesterday for AOK with Gas and Oil find in Kansas on Clarke-No1 Wildcat Discovery. That might add a few more cents......and a few more if it passes production testing in january.



> The well intersected the target Lansing-Kansas City Formation between 3,838 feet and 4,074 feet. Well logs indicate the presence of hydrocarbons in the Howard, Toronto and the Lansing-Kansas City formations. During a drill stem test conducted on the Lansing-Kansas City “A” Zone measured 820 feet of gas and 600 feet of oil was measured in the pipe with increasing flow pressure. The well has been cased and will be completed for production. The operator advises that production testing is planned for the first part of January 2010.



Aok has not yet announced that they are a net oil producer, but based on my calcs they have easily surpassed that point in the last two months......yet are still priced like a speculative explorer...

There net break even point by analysts and the company itself was around 80 BOPD ....by my calcs they passed that figure over a month ago and have two additional wells since. One producing and on likely to produce very soon.  

The things I love about this sompany is, it is priced like a speculative explorer, but is no I think a net oil producer, also it drills holes 4000ft deep for less then $150,000...... Most the other explorers / fledgling producers are outsouring the drilling for up to $1M per hole......Also thier success rate is off the rictar scale.....Im not sure the exact rate now as Im watching other companies more closely, but at one stage it was 5 from 5, and right no I think it 7 from 7 positive finds,. It may be 7 from 8.... but thats a terrific success rate...... On the down side so far all finds are small with low flow rates....but with a drilling cost of only $150K total these things are net profit in around 3 months each....compare that to a higher flow at $1M for drill only and your starting to see a picture developing.


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## condog (14 December 2009)

More positive news Mayo No 5 in tulsa County has been drilled and has free flowing oil and gas to surface with multiple target zones of hydrocarbons found....

Been capped and production rig will be in place within weeks


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## condog (18 December 2009)

Another positive result for AOK with free flowing oild and gas to the surface of another well today....capped and will be producing within 2 weeks.


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## condog (9 January 2010)

Im temporarily out of AOK for two reasons...firstly i needed the money for another move....secondly i had a small concern that analyst reports on their website stated at 80BOPD they would be cash flow positive.....reading through their last report they are way over 80 BOPD, but still a way from being cash flow positive.... Id like to investigate that further before re entering AOK....

What i love about it is their rediculously high success rate, albiet small discoveries, but very low cost drilling.... 

I often wish my other explorers would use the same drilling technology as AOK, who are drilling at 3 times the speed, with great flexibitlty of targets and at only $100,000 per hole compared to $1Million per hole for most other explorers.....


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## Onvil (14 December 2010)

Any hope for this one - seems to be going nowhere fast, except down, while the oil price has increased.


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## bailx (12 January 2011)

Onvil said:


> Any hope for this one - seems to be going nowhere fast, except down, while the oil price has increased.




Ive got sum good news, -_I think_. I took the liberty of trying to find sum charting patterns with AOK after it came up on the rader. 
I discovered that after 2 yrs AOK is finely growing its self sum head and shoulders after discovering its neckline plus sum double tops and bottoms. Which may exsplain, why it has not moved in line with the prices. For me this makes AOK   worth every Penny.
Putting this one in my watchlist.  Gunner be worth it.
My sources tell me that AOK will make resistance and breakout in the coming months providing I havn't miss read the charting charactoristics and the company fundermentals keep up there end of the bargian.


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## grandia3 (19 January 2011)

anyone still watching this one?

I have a feeling it is kinda promising
based on their annual report, they still have some cash and they manage to improve their profit in the 2010
What do you guys think?


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## Assasin (13 March 2013)

Anyone checking AOK out lately.

Certainly coming up with the goods! IMO.


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## springhill (5 April 2013)

MC - $65m
SP - 15c
Shares - 430m
Options - 140m (not quoted)
Cash - $9m

Announcement by AOK on March 19th caused a blip on their chart.

*Development Drilling delivers Significant Oil and Gas Reserves Upgrade*
● 1P Reserves increases 196% to 7.58 million BOE
● 1P Reserve NPV10 Value increases to $197.7m
● 2P Reserves increases 201% to 12 million BOE
● 2P Reserves NPV 10 Value increases to $284.1 million 

Does anyone have more detailed knowledge of the company that would suggest similar or more positive news flow? Chart for AOK trending positive.
Those options are a concern, although most aren't due for at least another year, the strike price is at current SP levels or only marginally higher.
My interest is pricked a little, but those options stink up the place a bit for anyone with a mid term outlook.


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## springhill (17 April 2013)

*Kansas well intersects 350 feet of Mississippian*

● Eller Chase Unit #1 successfully reaches TD 5,100 feet
● Well intersects target Lansing Kansas City, Cherokee and Mississippi Lime
● Testing underway on Mississippi Lime interval

United States mid-continent focused oil & gas producer AusTex Oil Limited (ASX:AOK – OTCQX:ATXDY) is pleased to provide an update on exploration drilling at the Colby Prospect,Thomas County, in which AusTex holds a 70% Working Interest. 
*Eller Chase Unit #1 successfully reaches TD*
The operator, Castle Resources Inc., has reported that drilling operations have now reached TD at the Eller Chase Unit #1 well. Logs have been completed and confirm the well intersected the Lansing Kansas City, Cherokee and Mississippi Lime formations. A gross interval of 350 feet of Mississippian was recorded.
*Current operations*
Preparations are underway to conduct a drill stem test on a section of the Mississippian interval between 4,882 feet and 4,932 feet. Subject to the results of this test and further analysis of the logs and samples, a decision will be made on whether the hydrocarbons present are commercial.
A further report will be released later this week once results have been reviewed.

Here are links to information on the Mississippian Lime Fields that are worth reading if this information takes your fancy.
http://press.ihs.com/press-release/...n-oil-play-providing-reason-optimism-says-ihs
http://www.fool.com/investing/gener...sissippian-lime-the-next-great-energy-fi.aspx


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## springhill (2 July 2013)

*AusTex reports solid production of 17,360 BOE for May*

● May production equivalent to 560 boe/day – 70% oil
● Peak rate of 750 boe/day
● Significant operational progress to facilitate future production growth
● Drilling of new vertical wells in Oklahoma and Kansas is ongoing 
● 16 wells producing and 6 wells now in pre-production phase 
● AusTex benefitting from strong US dollar
● AusTex on track for record quarterly production and revenue growth

United States focused oil and gas producer, AusTex Oil is pleased to report net oil and gas production in the month of May of 17,360 Barrels of Oil Equivalent (BOE), with an average of 560 boe/day consisting of 70% oil. A peak rate of 750 boe/day was also reached in May reflecting the strong operational performance of the company’s vertical wells. 
AOK successfully drilled two new vertical wells and fracced two additional wells during the month. The Company now has sixteen wells in production, three wells in production testing, and a further six wells under completion at the Snake River Mississippian Project in Northern Oklahoma.


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## piggybank (14 January 2014)

Got a speeding ticket today - I don't know why?

http://stocknessmonster.com/news-item?S=AOK&E=ASX&N=777852


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## tradernor (23 June 2014)

For those who missed it about Austex Oil from SA. It was syndicated by Josh Young (fund manager) in early 2014:


http://seekingalpha.com/article/193...ed-reserve-value-growing-300-percent-per-year


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## tradernor (23 June 2014)

Again from Josh Young about AusTex Oil in early 2014:



http://seekingalpha.com/article/195...ught-out-in-the-midst-of-a-bear-raid-a-theory


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## tradernor (23 June 2014)

And these are two additional articles about AOK from SA that increased the awareness about AOK in North America and internationally:



http://seekingalpha.com/article/1953581-five-of-the-fastest-growing-e-and-p-companies



http://seekingalpha.com/article/195...il-majors-buy-high-growth-undervalued-juniors


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## tradernor (23 June 2014)

This below is Young's latest article about AOK. 

Thanks to those articles, the awareness about AOK rose and AOK has almost doubled since December 2013.
AOK's stock was objectively very cheap at A$0.12 per share in December 2013.


http://seekingalpha.com/article/195...xplained-in-non-technical-language-austex-oil


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## tradernor (23 June 2014)

It seems to me that the Australian SA authors just discovered AOK too. The thing is that they discovered AOK at A$0.20, which is a 3 months delay after the American SA authors discovered it at A$0.12. 

This is the latest bullish article about AOK written by an Australian SA author. It was syndicated a few days ago when the stock was at A$0.20:


http://seekingalpha.com/article/2248683-austex-cant-stop-wont-stop


But AOK currently trades 10 times its 2014 EBITDA at the current price of A$0.20. Yes, this is 10 times. This is not a low multiple. 

AOK had ~$8.5 million EBITDA in 2013 and is estimated to have ~$11 million EBITDA for 2014.

AOK currently has Enterprise Value at ~$110 million, including the preferred shares and the notes.

110 / 11 = 10 times. Ouch!


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## raimop (30 June 2014)

tradernor said:


> And these are two additional articles about AOK from SA that increased the awareness about AOK in North America and internationally:
> 
> http://seekingalpha.com/article/1953581-five-of-the-fastest-growing-e-and-p-companies
> 
> http://seekingalpha.com/article/195...il-majors-buy-high-growth-undervalued-juniors




Hi Tradernor thanks for posting these articles. All the analysts are singing from the same hymn book. No doubt that the SP is benefitting from this added exposure. I'm a happy holder


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## raimop (30 June 2014)

AOK released Monthly & Operations Update for My 2014 today. Producrion is up to 39,482 BOE.
Daily average is 1273 BOE [up 140 BOE per day over April 2014.
There is a warning however that production may be lower in June 2014 as AOK focuses on the build up and development of infrastructure. Once that is completed focus will return to production which should coninue on its upward trend as more wells are drilled and brought on to production.. I am a happy holder


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## piggybank (24 July 2014)

The update released this time last week can be seen from clicking on the link below.

Maybe some of the oil experts here maybe able to give us any idea if this is one to keep an eye on, or keep it at arms length

http://www.stocknessmonster.com/news-item?S=AOK&E=ASX&N=807086

Today's action saw it breakout of a recently formed channel on rising volume - it also went up just over 14%.


​


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## raimop (26 July 2014)

This article by Jay Snodgrass appeared on  www.seekingalpha.com overnight.

The New, New AusTex
Jul. 24, 2014 3:42 PM ET  |  

AusTex (OTCQX:ATXDY and ASX:AOK) has been on a tear over the past 90 days, as the company gets through a large amount of actual and perceived overhang and corrects its balance sheet. In my April 10 article AusTex is AOK and followed up with AusTex Can't Stop, Won't Stop, I detailed the special situation opportunity that both individual and institutional investors could play. Since then the stock has increased nearly 60% and I've had quite a few Seeking Alpha readers ask me what's next.

*New Cap Table*

Before we look into the future let's quickly review what happened since my April article. In early June, the first set of ~20.5 million A$0.15 June 6 options were exercised, generating about $3 million in option premiums. More importantly though, the noteholders elected to convert all of their $7.5 million in notes that matured in mid June which freed up capital that had been previously restricted to pay down those notes. Over the past few weeks, the majority of the ~27 million A$0.15 July 29 options appear to have been exercised too, generating an estimated $4 million in option premiums. On June 19, the company announced that they had $11 million in cash. Adding in the $4 million from the July option exercises, the company is well positioned with no debt and ~$15 million in cash.

Ordinary Shares (MM) ~550*
Preferred Shares 116.7
Total Issued Shares 666.7*
Outstanding Options 98.1
Wtd Avg Option Price $0.17
Debt nil
Cash on Hand $15mm*
Source: AusTex July 17 presentation and *Jay Snodgrass estimates

*Production Ramps Up*

Operationally, the company has not slowed down one bit. On June 30, the company announced that production for May averaged 1,273 boepd, up 30% from January. This number is a little deceiving as the company announced that it had an additional 18 wells in various stages of pre-production. Based on the company type curve, that represents an additional ~700 boepd that will come online in the near future, about 100% increase from January production. According the company's most recent presentation, the economics on these wells are excellent with nearly 100% IRRs based on current pricing.
Source: AusTex July 17 presentation

*Proven Vertical Mississippian Strategy*

In their most recent presentation, the company announced that only 1 of ~40 producing wells to date has been determined to be uneconomic. Given the estimated dry hole cost of only $200,000 this makes AusTex's vertical strategy a winner. Early on investors mocked the company for not pursuing a horizontal strategy. Since then many of the large and smaller operators that pursued a horizontal program have given up and left the play.

The Mississippi Lime is an unusual play where it seems as though in many areas the cost-benefit/risk-reward payoff of vertical vs horizontal leans toward vertical development, especially for a smaller, less capitalized operator. Hats off to management for resisting the pressure and temptation to go horizontal.

*Growing Land Position*

As the company has perfected their drilling and proven their development strategy, they've quietly leased additional nearby acreage. In the past year, they've increased acreage by 60% to ~8,700 acres. Fortunately, they were out of the market during the big land boom from 2010-13 and today they are largely able to acquire acreage at pre-2010 prices. In addition, they've built significant infrastructure which makes it possible for them to develop the new acreage far quicker. In this play with high amounts of water production, infrastructure is vital.
Source: AusTex July 17 presentation

*The Next 6 Months*

The remainder of 2014 should be transformational for the company. They currently sit on an estimated $15 million in cash with no debt. In the near future, I anticipate the company will release an updated reserve report which should be significantly higher than the most recent 12/31/13 report. Shortly thereafter, I expect the company to announce a revolving credit facility with a major bank. Based on the 12/31/13 report, they should easily be able to borrow $15 million, but I suspect their borrowing base will be closer to $20-25 million with the updated report. Combined with their current cash that would give them a lot of dry powder to exploit their top tier Snake River project. And most importantly, they will be able to do so without further diluting equity shareholders!

With a credit facility in place and growing acreage position, I would also expect management to ramp up drilling from two rigs to perhaps four rigs. Given the shallow nature of the play, this would enable them to drill perhaps 14-16 new wells per month.

In April, I put a A$0.25 ($12.50 for ATXDY) price target on the stock and yesterday it hit A$0.24. The company still trades at a significant discount to its 12/31/13 1P reserves. With the convertible notes and options overhang largely gone and cleaned up balance sheet, I suspect more institutions will take the stock seriously. In fact, just last week Australian hedge fund Perennial Investment Partners disclosed a ~5.5% position.

With all of the catalysts coming up, I could easily see a A$0.35 price ($17.50 for ATXDY) by year end, representing ~50% upside from today's price.

I HOLD


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## raimop (30 July 2014)

This note appeared in the Australian Financial Review [Street Talk]
Freestyle Investors, led by former deal makers at private equity giant TPG Capital, has built a stake of as much as 25 per cent in US-focused oil and gas junior AOK.

As both AUS & US markets are currently closed AOK has not released any announcements.

This follows IOOF taking a 5.4% stake in mid July 2014

I HOLD


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## goccipgp (30 July 2014)

Looks like a breakout at 0.26 with a short term target of 0.304.Technical buying signal at au stoxline.


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