AED - AED Oil

[imajica]

AED Enters into Crude Oil Marketing Agreement with Total

AED Oil Limited (AED) announces that it has entered into an agreement with Totsa, Total Oil
Trading SA ("Totsa"), a subsidiary of Total SA ("Total"), for the marketing of the Puffin North
East Crude Oil.

AED has undertaken an extensive selection process for its crude oil marketer and is pleased with
the natural alignment of marketing strategies achieved under this agreement. AED is pleased
with the extensive market opportunities within the region and globally that Total offers.

Puffin is a premium quality light sweet crude with an API Gravity of approximately 44° and
sulphur content of 0.05 wt%. The crude produces high yields of excellent quality gasoline and
middle distillates making it an ideal feedstock and, in particular, for Australian and Asian
refineries which should result in valuation at the high end of world crude prices. The
agreement with Totsa is based on a FOB (Free On Board) contract.

Total is one of the world's major oil and gas groups, with activities in more than 130 countries.
Its 95,000 employees put their expertise to work in every part of the industry * exploration and
production of oil and natural gas, refining and marketing, oil and gas and electricity trading.

 

[Sprinter79]

Has anyone had a chance to read through in detail the presentation that they've just released to the market? I had a quick look through it, seems interesting.

I would provide a link to it, but if you're interested you can find it online

 

[laurie]

Production start up in the air take your pick
July-August,September

cheers laurie

 

[bigdog]

Re: Recoverable Oil up to 100 Million Barrels

ASX late today
AED 5:52 PM Recoverable Oil up to 100 Million Barrels
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00734706

ASX Announcement after the closure of trading today!
-- 100 Million Barrels @$US 67 = Revenue $6,700,000,000
--

What will the SP be on Monday?

29 June 2007
Recoverable Oil up to 100 Million Barrels

AED Oil Ltd (“AED” or “the Company”) is likely to have up to 100 million barrels of recoverable oil AED is in the process of reviewing its petroleum development assets, the 100% owned Puffin and Talbot fields. Based on the results to date, indications are that the Company is likely to recover in excess of 100 million barrels from these fields, which include the Puffin North East region (NE1 and NE2), Puffin South West (SW1 and SW2) and Talbot, subject to suitable field development. The Company also remains optimistic that additional development targets and exploration prospects will be identified in ACL/6 and ACP/22.

AED Oil Ltd was listed in 2005 with a likely recovery from ACP/22 of 11 million barrels. The drilling of three wells (Puffin 7, 8 and 9) and extensive technical studies, based on reprocessing and reinterpretation of two 3D seismic surveys has led to a significant increase in mapped oil and potential recovery.

Further details regarding recoverable volumes will be announced shortly. AED Oil Ltd is likely to commence production from the Puffin field (NE1) in August 2007.

 

[bigdog]

imajica advises:

remember AED is selling their oil at a premium

more like $75 US a barrel for Tapis crude

nice one

imajica

 

[gfresh]

Just watched an interview with the MD(?) this morning on ABC's inside business.. Explained a few things, and seemed very level headed.

He basically explained there is great potential for the future of AED, with of course the stability of the region compared to other places such as Nigeria. Looks like a lot of the Puffin area was handballed around over the years (by the likes of BHP), etc years ago, for the 'easier' areas such as gulf of mexico at the time. Now things have changed a little, and the price of oil skyrocketing, instability in some other areas, it makes the area very attractive.

Anyhow, a good inside rundown. Transcript should be on the ABC website soon (not up there yet).

Charts would indicate a perfect breakout scenario at the moment, which of course is held up by the 100mil barrel announcement..

It seems like awareness of AED in the market is only small at the moment, however I can only see this going very northward over the next few months, and beyond that the next few years - as easy to access oil supplies become harder, and of course demand shoots up from China, India, etc.

 

[BankRoller]

Grfresh,
Can you please provide a link to the transcript when it is up?

Certainly looks like AED is getting the publicity it deserves now.

 

[bigdog]

Grfresh,
Can you please provide a link to the transcript when it is up?

Certainly looks like AED is getting the publicity it deserves now.

I would imagine link is which has not been updated for this week as gfresh advised below
http://www.abc.net.au/insidebusiness/

 

[Plan B]

AED Oil's double Timor Sea estimate

Sunday Jul 1 12:33 AEST
Oil developer AED Oil Ltd has more than doubled the estimate of its Timor Sea oil reserves to 100 million barrels and expects to begin production by August this year.

But the company's extraordinary growth could also make it a takeover target if the energy sector begins consolidating, AED Oil's chairman David Dix said.

The latest estimate of AED Oil's Puffin and Talbot fields, 700km west of Darwin, was released to the market after it closed on Friday.

The previous estimate of AED Oil's reserves was 40 million barrels.

"We've probably got the potential to move up towards 100 million barrel fill," Mr Dix told ABC's Inside Business.

The latest estimate comes a little more than two years after the company's $55 million float with just under 11 million barrels in expected reserves from Puffin.

The market now estimates the company is worth close to $890 million.

Mr Dix said the field had been previously owned by a number of other oil companies including BHP Billiton.

But when the oil price went down, the big producers lost interest in investing more money in developing the Timor Sea field.

However, AED Oil had noticed that other small projects in the area had developed beyond initial expectations.

"Those projects gave us the confidence the Timor Sea was a difficult area to actually interpret and understand," Mr Dix said.

"Therefore, there was potential and we talked about that at the time of the float but you never really expect to be that lucky."

Mr Dix said he expected consolidation in the energy sector due to growth and the high commodity price.

As a result, labour and capital equipment shortages were creating a need for bigger companies which could compete better, he said.

But AED Oil was more focused on developing its own assets than taking over other companies.

"We are probably more likely to be a target and from my experience in acquisitions in this sort of market, it's very difficult to acquire things and get them at face value," he said.

Mr Dix said he expected the North West Shelf area had a lot of potential as oil field as well as producing gas.

With the oil price around $70 per barrel, there was renewed interest in the area, he said.

In March 2005, AED Oil raised $55 million with its initial public offer of 64.7 million shares at 85 cents each to develop its Timor Sea fields.

Shares in the oil company closed five cents higher at $7.55 on Friday.

Link

 

[jackson8]

please excuse my ignorance but will this latest estimate have any affect on sp of norwest energy. i have a small holding in them

thanks

 

[dj_420]

well we now have over an 100% increase in recoverable barrels of oil!

i wonder what this will do to the sp come tomorrow, AED should now be coming up on the radar for many larger companies and insitutions with such a large increase.

anyones view on what price this could put valuations at?

 

[imajica]

lets have a look at base case production

30000 barrels x A$90 (approx for tapis grade) x 365 = 985,500,000


that''s nearly a billion revenue a year

even if we take half of this away to take into account running costs, wages, taxes etc we still have an EPS between $2 - $4 a share (per year)

with the new reserve upgrades AED should be producing for a minimum of a decade - a fair P.E based on proven reserves and the likelihood of proving more up, in my opinion, would be between 7 and 10

share price prediction : $14 -$28 in the short to medium term

$30 + in the long term

 

[nizar]

well we now have over an 100% increase in recoverable barrels of oil!

i wonder what this will do to the sp come tomorrow, AED should now be coming up on the radar for many larger companies and insitutions with such a large increase.

anyones view on what price this could put valuations at?

I think this news plus the associated press (TV interview, newpapers, internet) over the weekend will propel us into blue skies either 2mrw or tuesday IMO.

Imajica -- Nice ramp bro.

 

[doctorj]

lets have a look at base case production

30000 barrels x A$90 (approx for tapis grade) x 365 = 985,500,000


that''s nearly a billion revenue a year

even if we take half of this away to take into account running costs, wages, taxes etc we still have an EPS between $2 - $4 a share (per year)

with the new reserve upgrades AED should be producing for a minimum of a decade - a fair P.E based on proven reserves and the likelihood of proving more up, in my opinion, would be between 7 and 10

share price prediction : $14 -$28 in the short to medium term

$30 + in the long term

I think this has been covered well over in the NWE thread.

Shares on issue (fully diluted): 153,281,752
Assume $45/bbl costs (per your post)
45*30,000*365= $492,750,000
EPS = 321cps

All reasonable so far. Where I disagree with your valuation is your application of a P/E between 7 & 10. At this stage, the life of Puffin is (don't quote me here) something like 5 years.

If we ignore the exploration upside, namely Puffin-10 for a moment and try to value AED on its future cash flows, using your assumption of 50% costs and A$90/bbl, a discount rate of 10% and a field life of 5 yrs @ 30k bopd, you get a valuation per share of about $12.19. Personally, I wouldn't be looking to value something based on such a high commodity price, but then again maybe this is offset by the production costs we've assumed. Using A$80/bbl for the first year and A$60/bbl for the years after, you arrive at $8.77 per share.

 

[dj_420]

I think this has been covered well over in the NWE thread.

Shares on issue (fully diluted): 153,281,752
Assume $45/bbl costs (per your post)
45*30,000*365= $492,750,000
EPS = 321cps

All reasonable so far. Where I disagree with your valuation is your application of a P/E between 7 & 10. At this stage, the life of Puffin is (don't quote me here) something like 5 years.

If we ignore the exploration upside, namely Puffin-10 for a moment and try to value AED on its future cash flows, using your assumption of 50% costs and A$90/bbl, a discount rate of 10% and a field life of 5 yrs @ 30k bopd, you get a valuation per share of about $12.19. Personally, I wouldn't be looking to value something based on such a high commodity price, but then again maybe this is offset by the production costs we've assumed. Using A$80/bbl for the first year and A$60/bbl for the years after, you arrive at $8.77 per share.

i dont think you are taking into account the full upside of the resource upgrade. 30 k per day for five years gives us 54 million barrels. what about the fact they stated 100 million recoverable barrels, that will double the length of resource life.

broker valuations also had put this one at 10.90 before resource upgrade. IMO this one will see some dramatic upside in days to come.

 

[gunditrader]

I bet Mr Costello is loving this too. The 40% PRRTax will definitely put a smile on his face ... and a considerable dent in the earnings of this company. Still looking great though. Bring on $10 .....

 

[doctorj]

i dont think you are taking into account the full upside of the resource upgrade.

Good pick up! I'd be interested in your thoughts on the image attached. Modified it for the extended life.

 

[dj_420]

Good pick up! I'd be interested in your thoughts on the image attached. Modified it for the extended life.

very interesting! looks very good now!

i think the upside has added quite a significant amount of life to the field. would be good to see the new valuations that brokers placer on this one.

 

[imajica]

http://www.abc.net.au/reslib/200707/r156469_565974.asx


ABC - Inside Business - about 6 minutes in - long interview with David Dix discussing AED oil

 

[bigdog]

Todays Australian:
http://www.theaustralian.news.com.au/story/0,20867,21999886-643,00.html

WHAT THE BROKERS SAY
Kevin Andrusiak
July 02, 2007

Looks like CREDIT Suisse got AED wrong!

Extract refer last paragraph

Australian Worldwide Exploration
Credit Suisse
Neutral: $4 (12-month target)

CREDIT Suisse has changed its rating on AWE from outperform to neutral, citing the recent 18 per cent run-up since the middle of May. Credit Suisse's 12-month projected return for AWE is 14.6 per cent, which now implies a projected excess rate of return relative to the market of 2.7 per cent - hence the neutral rating. Credit Suisse has also put an underperform rating on AED Oil as it struggles with its Puffin field start-up. The 12-month price target for AED is $7.25.