AED - AED Oil

[Trader Paul]

Hi folks,

AED ..... our cycle analysis indicates that this rout has more
to run yet ... looking for more negativity from 2102-18032008,
particularly around:

21-25022008 ..... negative spotlight on AED

17-18032008 ..... more negative news expected ... finance-related???

..... and, if AED survives:

Also looking for lows to be tested in late-June/early- July 2008, before
the first signs of recovery, with a positive cycle expected 09-10072008.

have a great day

paul



=====

Hi folks,

AED ... on track so far.

Downside price target ... just like MEO ... looking for an ambush, about 90%
down from the October 2007 highs - that would make it around 1.14 .....

..... high volume last Friday, so some buyers already moving in, but may
be a little too soon, as further negativity is expected, later in Feb 2008
... see post above for anticipated time cycle dates.

have a great day

paul



=====

 

[YOUNG_TRADER]

wow haven't the mighty fallen, this was one of the best performing stocks,

I never held AED but I did have some NWE its royalty partner in the North West Shelf program,

Whats happened? Has all the oil dried up or something?

p.s. Paul you picked the bottom of MEO to a tee so I'll be watching with fascination to see how close you get we AED, cheers for the info

 

[Weihuawang]

Woodside would like to pay Shell 400 million US dollars for asset with an estimated proved and probable reserves of 21.3 million barrels of oil equivalent, or US$18.71 a barrel. What's the asset value of AED if its 100 million barrels of recoverable oil is true?????

Lost all my profits in 2007 and another $10000 in 2008 on AED.

The directors of AED are too risky. If they started Puffin 10 drill later, it would be much safer. Not like now, both lower product on Puffin NE and failure drill on Puffin SW comes together, and they nearly run out of money.

 

[doctorj]

There's every chance the greatly diminished flow rate is going to have a large impact on the amount of oil recoverable in the field.
The trouble is, the reduced flow rate has a non-linear impact on profit, future growth, the amount of recoverable oil and possibly also the life of the field.

It's too simple to say that because they're still pumping oil and it hasn't gone anywhere that they're still worth a lot. Look at VRE - supposedly no debt and no hedge book and they still went under. I'm not saying AED will, but there's a chance the field won't be profitable any more.

 

[morton_mains]

Can't believe how sour this has turned.
Its a travesty that ASIC haven't made a phone call months ago- The directors started the Decem. quartus terribillis with only $10M - obviously were planning the oil would flow straight to bank a/c but finished the quarter with $26M but had to defer at least $43m for one supplier. But how much else haven't they paid.

I find it unbelievable they tried to run so tight without extra facility in place months ago - why wouldn't you get extra facility - they could have afforded it - as they clearly thought they would be swimming in the black stuff, so why wouldn't you get more even it it cost a couple $M

Its one thing for a company to run short, its another thing to get such a publicly embarrrasing credit steer with suppliers ( who are they gonna call for more drilling? without cash up front), but watch the play now from MacBank (I'd be surprised if they weren't pushing rather than pulling the strings) - having placed US$85M last Feb at initial $6.44 conversion price they will be looking to somehow to dilute existing equity further at current price?

[No longer own but sold at loss as continued to believe it just couldn't be as bad...yeah I know..]

 

[gfresh]

I've spent some time analysing things from a financial view, and it gets much worse than simple cash on hand.. debt on hand is mounting, probably into an unrecoverable position.

Looking at the balance sheet.. from July 07 to present (half yearly):

incomings:

+$65.67M cash in (from oil sales I assume), only in last quarter
+$0.074M interest received

minus outgoings:

-$146.66M exploration/development (fixing problems that aren't fixed!)
-$37.25M production costs
-$4.1M administration / office costs
-$8.2M interest payable on finance

NET Cash Flow: -$130.539M

Few other minor items on sheet give:
-$130.78M
then add:
+ $117.24M borrowings
+ $22.8M share issues
+ $18.16M cash on hand carried from previous year
- $0.525M exchange adjust
--
Leaving stated cash at end of quarter of $26.9M

However, if you look carefully "cash flows from financing", $117.24M is proceeds from borrowings - it's not their money!.. leaving them in fact $90.34M behind

---
This quarter -$21M cash flow, last quarter, -$109.37M.

March quarter?? Another two digit $M outgoing I'm sure to make this even worse... but where is the money going to come from this time around? See below:

Here is the key item..

Loan Facilities (end Dec07):

Drawn: $176.24M
Available: $187.68M

So if I am correct, they are within $11M buffer of their loan limit. The loan drawn shows $152M last quarter (sep07 report), and this has increased. "Available" seems to have stayed pretty much the same, which seems to indicate that's a maximum, not a rolling total "remaining".. Therefore Dec07 quarter was $24.24M further drawn down... this quarter they do that again and their finance is dry

In essence, AED is behind : $26.9M-$176M loan owing = $149.1M

Maybe I am being alarmist, however it seems without at least a *net inflow* (strong oil sales) of least say $50M this quarter, AED is in a dire position. I doubt even financiers will allow them to even reach the March 31st at this rate.

Feel free to correct my figures, or provide further input as I may be offtrack, however I can currently see that AED is pretty much insolvant at current cash burn. Short of instantly improving their production they are gone in this quarter.

And to be honest, I cannot see anybody would be keen on taking on that amount of debt in a venture partnership where AED could collapse. Easier to pick the corpse for the assets, than take the debt!

I will be selling tomorrow..

 

[doctorj]

It's probably more accurate to assess a company's cash flow from a going concern view point by looking at operating cash flow and add back exploration/development expenditure.

Then you'll want to assess the terms of their loan (will they be able to meet payments) and perhaps compare trade creditors to cost of sales to see if it's increasing.

 

[reece55]

It's probably more accurate to assess a company's cash flow from a going concern view point by looking at operating cash flow and add back exploration/development expenditure.

Then you'll want to assess the terms of their loan (will they be able to meet payments) and perhaps compare trade creditors to cost of sales to see if it's increasing.

It will be interesting to see if they are indeed trading as a going concern anymore.....

Depends on where they are at with their negotiation with the engineer creditor in Canada - if they can come to an arrangement, then they may be able to justify it...... If not, then I fail to see they are able to pay their debts as and when they fall due, to quote Corporations Act. I find oil companies are one of the most difficult entities to value due to the fact that there are so many factors to consider when trying to get the stuff out of the ground.....

Cheers

 

[sfx]

Hiya all - Just been reading back through the posts.

As a follower of AED I do have to say that AED management should be shot.

I think their 'announcement style' are far short of selective wording to bolstering what is now becoming one of the biggest f*ck ups in the short history of Aust oilers. If they're not hiding stuff in announcements, they're saying nothing at all.

Not to mention, they have a nack at committing company suicide.

Management should be hung out to dry. If I was living in Melb, I'd camping at their door and hollering abuse, and not to mention throwing rotten tomatoes at passing management.

Whilst we share holders hang on for dear life, management continue to get paid top dollar for f*cking up.

Has anyone out there managed to get these turkeys on the phone?! I haven't had the time to attempt to call....

Expect to see me at the next AGM dressed in a turkey outfit, wearing a friggin baggy golf hat and holding a box of tomatoes....

I continue to hold (in since IPO), and will continue to hold, as the fundamentals are still there. I just hope that they don't get bought out, and our shares don't get diluted for nothing.

Of course these are my own comments, Do Your Own Research of how to hunt down and maime AED management....

 

[doctorj]

It will be interesting to see if they are indeed trading as a going concern anymore...

The furthest AED management can realistically drag it out is till Feb 29. If E&Y qualify on going concern, the director's would be hard pressed to continue trading.

I'm sure it's being addressed as we speak, but I doubt there's going to be anyone willing to (a) lend them more in the state they're in or (b) farm in for large amounts of cash. If anyone is interested, they'll be patiently waiting for them to go under first.

The only resolution they have is by negotiation with the creditor's that kicking up a fuss. I suspect the reason why these guys have got their knickers in a knot is they have doubts about the performance of Puffin going forward so they've taken the decision it's best to start pressuring sooner, rather than later. Before AED run up more debt and the line of creditors becomes longer.

 

[kingbrown]

Is AED just dust now ?

Check This !!

UBS
have dropped price target for AED
from $3.68 to $1.16

Guess we have all lost our money !!

See link for Fn Arena news according to them its not good !


FN Arena News, Australia - 10 minutes ago
So what's this got to do with AED Oil ((AED))? It came to FNArena's attention that still sitting on the CS Top 20 list was one AED Oil, a stock that has ...

 

[jonojpsg]

Surely even if AED had to sell their assets, if they have 100m barrels of oil under the ground to sell @ fire sale prices of $5 per barrel, that gives them $500m which after they pay their debts of around $300m leaves $200m or about $1.70 per share. Is this a possibility as far as what shareholders could get

...or are we just going to get nothing and some other company will get AEDs (our!!!) oil for next to nicks

 

[kingbrown]

Down almost 15% today


at UBS price already
$1.16

Wonder if she will break the $1 barrier ??
or will it drop to

 

[reece55]

Surely even if AED had to sell their assets, if they have 100m barrels of oil under the ground to sell @ fire sale prices of $5 per barrel, that gives them $500m which after they pay their debts of around $300m leaves $200m or about $1.70 per share. Is this a possibility as far as what shareholders could get

...or are we just going to get nothing and some other company will get AEDs (our!!!) oil for next to nicks

If you are the buyer, wouldn't you just wait until they go belly up - I think it unlikely that any purchaser is going to pay top dollar for an entity that is basically bankrupt. Any entity looking for a stake in the Puffin project is going to want an asset acquisition because otherwise they would inherit any liability of previous management.....
Cheers

 

[doctorj]

if they have 100m barrels of oil under the ground to sell

That's the big if. The amount recoverable will be effected by the flow rates - slower flow rate means LESS is economically recoverable. The question is how much will it be effected?

 

[NewIraq]

Hi folks,

AED ... on track so far.

Downside price target ... just like MEO ... looking for an ambush, about 90%
down from the October 2007 highs - that would make it around 1.14 .....

..... high volume last Friday, so some buyers already moving in, but may
be a little too soon, as further negativity is expected, later in Feb 2008
... see post above for anticipated time cycle dates.

have a great day

paul



=====

On track indeed Paul ... good call .. low at 1.15 so far ..
So .. will there be a quick bounce from these levels .. or will it bounce around here for awhile?

 

[chops_a_must]

Hiya all - Just been reading back through the posts.

As a follower of AED I do have to say that AED management should be shot.

I think their 'announcement style' are far short of selective wording to bolstering what is now becoming one of the biggest f*ck ups in the short history of Aust oilers. If they're not hiding stuff in announcements, they're saying nothing at all.

Not to mention, they have a nack at committing company suicide.

Management should be hung out to dry. If I was living in Melb, I'd camping at their door and hollering abuse, and not to mention throwing rotten tomatoes at passing management.

Whilst we share holders hang on for dear life, management continue to get paid top dollar for f*cking up.

Has anyone out there managed to get these turkeys on the phone?! I haven't had the time to attempt to call....

Expect to see me at the next AGM dressed in a turkey outfit, wearing a friggin baggy golf hat and holding a box of tomatoes....

I continue to hold (in since IPO), and will continue to hold, as the fundamentals are still there. I just hope that they don't get bought out, and our shares don't get diluted for nothing.

Of course these are my own comments, Do Your Own Research of how to hunt down and maime AED management....

Mate. You do realise the absurdity and hypocrisy in your own breath and within a few sentences there don't you?

With terrible management, it can **** up even the best underlying fundamentals. It gets proven time and time again.

You've given up 90+% of profits and risk losing even your entire investment. It's just nuts. But you know, I guess that's the reason why some of us can make a profit.

My guesstimate is that Macquarie have written most of their investment off, and that they can get the best return by waiting for AED to go bust. Otherwise they would have raised money while the SP was not teetering on zero. From memory, MCQ would be paid out first as well, with their investment. There isn't going to be anything here for investors if it goes belly up....

The amount of stupidity demonstrated on these boards of late is completely staggering.

 

[trillionaire#1]

I'm out! You can only take so much

Can't see a bail out, was hoping Macquarie might have pitched in
But I guess theres no point flogging a dead horse.

 

[kingbrown]

DOG

Lucky I was not greedy 1st up !
Something now is better than zero later.

Have to laugh though !

Been Down to $1.06
Unaware buyers now maybe in trying to average out !?
Are they suckers ??


Been nice watching all your posts the last few months
Time to move on.

Guess we all should have taken notice of the antics
CHOPS a little more !

Ciao

 

[skunkmonkey]

AED has put me off shares for life. In at $8.90 and now at $1.16 only 3 months later with no explaination or acknowledgement of any issues from management. The ASX were all over CDU - how can they stand back and watch these guys crash without seeking some answers?



I'm in stage two of the Kübler-Ross model of the five discrete stages by which people deal with tragedy.

Can someone please post the UBS text from the Avena website?