BUR - Burleson Energy

[Wysiwyg]

Quarterly report out today shows the income from 2 wells at over $750 k.Now considering Jet 3 was bought on line 13/1/08 at 8 mmcf/d and Marlin 1 to enter the equation along with re-entries to existing pay zones.
Then next quarter income will be considerably higher.Now 13c to 14c per share??? Thank my lucky stars.
Noting the Houston Ship Channel market pays less for a mmBTU than Henry Hub and the boss says they are selling the BUR gas at $1 less than the HSC price, using the start of month price

The price received for Champions area gas is typically about US$1.00/mcf below the Houston Ship Channel price posted on the first day the production month.

JET 3

Anyway, i have an average of $6.7993 per mmBTU (HSC) on the 1st. of January so take a $1 off that and you get what price Jet 3 will be paying at 8 mmcf/day.(BUR NRI 29%)

1 thousand cubic feet = 1030000 BTU or 1mcf = 1.03 mmBTU.

so 8000 x 1.03 x $5.7993 = $47786.232 ÷ net 29.25% = $13977.47286 net per day to BUR.(correct me if wrong please)

So, as an options holder (expire 2010) i still am damn sure that i`m onto a company with frugal leaders making the smart moves by increasing % in wells.Bring on the 4 th. producer this quarter and other re-entries for low risk/low cost.Building a bank of producers AND EVEN BETTER VALUE THAN BEFORE.

Houston Ship Channel price reference ... .https://www.theice.com/marketdata/naNaturalGas/naIndex.jsp

 

[rykerz]

BUR sitting at the lowest SP ever, anyone else regret not letting go at 0.21 before like I am?

 

[spidermonkey084]

BUR sitting at the lowest SP ever, anyone else regret not letting go at 0.21 before like I am?

Ha Ha yes I am a little sick of it to be honest but as they say you dont lose until you sell. I will just hold on they will come back I do think they are undervalued at the moment.

 

[Trader Paul]

Hi folks,

BUR ...

18-19022008 ... negative spotlight on BUR

03-04031008 ... minor and negative cycle

12-14032008 ... 2 cycles ... significant negative news???

20032008 ... positive spotlight on BUR .....

02042008 ... positive news expected here

04-07042008 ... significant and positive cycle

Updated BUR chart, below .....

happy days

paul

=====

Hi folks,

BUR ... as posted above, negative cycles bring in the lows and with more
negativity expected (see cycles posted above), BUR will likely bounce along
the bottom, over the next week or two .....

happy days

paul



=====

 

[spidermonkey084]

Thanks for that Paul I was getting very close to selling on a loss but looking at that I still hold some hope just have to sit it out.....

 

[Wysiwyg]

Well there seems to be a mis-understanding because the "stable" flow rates give us a true indication of production and I have provided the "stable" production rates in the following which BUR has a share of more than 3 mmcfg/d.This is a small cap. company doing exceptionally well after only 9 months.The facts ..... (and i know there is no prize for being right )

Yequa Properties Unit #1 well, (BUR Working interest 40%, Net Revenue interest 31.13%) has been on gas and condensate production since July 2007. During January it produced an average of 0.512 million cubic feet (mmcf) of gas per day and 16 barrels of condensate per day.

.512 x 31.13 / 100 = .159 mmcfg/d net to BUR (left the oil percentage out)

Rocket 2 well, (BUR WI 17.5%, NRI 13.13%) has been on gas production since November 2007.In January it averaged 2.34 mmcf of gas per day.

2.34 x 13.13 / 100 = .307 mmcgg/d net to BUR

Jet 3 well, (BUR WI 37.5%, NRI 29.25%) commenced gas sales on 11 January 2008 and averaged 5.66 mmcf of gas per day during January (including two days of low production while repairs were undertaken).

5.66 x 29.95 / 100 = 1.655 mmcfg/d net to BUR

Gas sales commenced on 16 March 2008, Texas time and the well was selling approximately 10 million cubic feet of gas per day (mmcfd) through a 14/64 choke and with a tubing pressure of ~7200 psi.Net Revenue Interest 23.01227%

Conservatively stable 5.50 mmcfg/d x 23.00 / 100 = 1.265 mmcfg/d to BUR

So... .159 + .307 + 1.655 + 1.265 = 3.386 mmcfg/d net to BUR at an average of US$8000 per mmcfg this comes to US$27088 net to Burleson Energy per day at present.

There production income will increase as more units come on line throughout the year so in my biased opinion Burleson is undervalued along with many other stocks at the moment.

 

[mick z]

with marlin now pumping out 13mmcfpd i now make a total of 5.1mmcfpd net to bur @$8.50mcf =$43,000pd

mick

 

[Wysiwyg]

The wells invariably have high initial flow rate and then stabilise at about half.My calculations on M 1 are as stated, conservative.(they only have a 23 % net revenue interest)
Yes that is an exceptional initial flow rate and a higher than i anticipated "stabilised" flow rate will be great.

 

[rykerz]

However, without any major news released by the company, BUR is still not noticeable to the general market, which is why I see a very slight chance of it boosting back up to the older SP.

 

[rykerz]

Sorry for double posting but just wondering how everyone else is doing with their BUR stock? Most of us given up already?

 

[STRAT]

Sorry for double posting but just wondering how everyone else is doing with their BUR stock? Most of us given up already?

I suspect quite a few holders have stuck em in the bottom drawer cause they are tired of looking at the losses. Ive been watching BUR for 6 months or more and have been waiting for a TA sgnal to buy. Still a good productive company with a lot happening which must turn at some point.

 

[Agentm]

Sorry for double posting but just wondering how everyone else is doing with their BUR stock? Most of us given up already?

i have been watching the bur share myself, but have not entered the share as the wells so far have been very poor performers compared to many wells in the leases

i will post up viking 1 production figures, and rocket 2 and another well called yeuga, which went off production a few months back.. not outstanding if you compare to viking

on the map you can see rocket 2 and the marlin wells are extremely close to viking, viking is a good well by gidding standard, and profitable, it had the usual traditional steep giddings chalks declines, but it started from a very high inital flow rate..

imho until BUR starts to get wells that are many times better than what they have, then its not likely to get exciting in the sp area..

i keep a close watch on them myself as i also think any good well in the future can turn this one around..

all imho and dyor

 

[resourceboom]

greetings mr m !

I havent spoken to Mike for a while, but I'm pretty sure YPU1 is still on production, and is doing ok, not in the same league as the champions wells. Yes if Marlin 2 delivers strongly, watch the sp fireworks !!

It would be nice to see some speculative buying prior to that well, but theres not much of that in the current environment.

current prod report below, they are normally 3 months behind.

 

[Dukey]

OK- must be time for a BUR update.

There is another Board room radio interview here...(click on the audio section on the left side)
http://www.brr.com.au/event/preview/9yd1mw4b45/45465


I know I've said it before - that these guys are looking good - and the sp hasn't responded the way I expect.

but... I still think they'll be re-rated at some time!

& here's why... (as reported by ExDir Mike Sandy on BRRadio)

1. Marlin well: still flowing ~10 mill cubic ft/day
- would have flowed more but pipeline constrained from the start.
- has payed ~ $900k AUD net to BUR in 6wks so far.
- This strong flow is interfering with production from other BUR wells - this is being addressed and when it is, production rates should increase... hopefully.

2. INCOME!!
# Income from first 3 wells (detailed in previous posts) currently running at $200-250k AUD per month - net to BUR.

# Income from latest well (Marlin) running at $600k AUD per month - net to BUR.

--> lets take a total of $800k AUD / month net to BUR.
(remember this could increase when pipeline constraints are addressed)
800k$/mnth X 12 = $9.6M/yr AUD. = CURRENT RATE of income. not counting exploration costs.

Now - Comsec tells me current Market cap of BUR is only about $12M.

Going on 115M shares (and 55M options).

Thats - 9.6/115 = 8.3cps. (5.6cps fully diluted)

Todays price is 12.5... no... up to 13cps!!

Looks like a bargain to me, with $4M cash in bank (april); Current income - and more wells to come - targeting oil/condensate rich plays.

... currently looking for details of exploration costs just to check - though Mr Sandy has said that Marlin hole came in under budget.

 

[Agentm]

have to agree with you dukey, marlin holding fine and thats a great well to have. its time for a re rating for sure ..

i have seen permits go in for the operator, what are the immediate drilling plans for BUR now?

 

[Dukey]

Just to follow up - about Future production - from Marlin in particular...
as Agent M has said - these wells are known to produce well at first and then production rates decline to a more stable level.
BUR says the first 2 wells are in the more stable phase of production, while Jet and Marlin are still in the early phase
- so we KNOW that the good rates from Marlin will decline. We don't know where they will settle.
- Any suggestions would be welcome there.

BUT we also know that current production is 'pipeline' constrained - now I (and I'm not an expert at all so correct me if I'm wrong) - I would assume that the 'constrained' initial production rates at Marlin - would mean we could expect the normal 'production rate decline' to happen slower than would otherwise happen without any flow constraints....

does anyone know - is that a fair assumption??

... just trying to get a a realistic picture of how sustainable this income is, based on the 4 holes already drilled.

regards all -dukey
(holding BUR)

 

[Dukey]

have to agree with you dukey, marlin holding fine and thats a great well to have. its time for a re rating for sure ..

i have seen permits go in for the operator, what are the immediate drilling plans for BUR now?

The quarterly update says they are considering a 'well re-entry' project to chase oil missed by earlier production phases.

The BRR interview said the rig from Marlin 1 was released - they are sourcing another and want to drill a follow up to Marlin. And looking for targets in existing acreage with better oil/condensate contents to take adv of the oil price.

Future prospects: looking at another project - doing 3D seismic in texas gulf area - (non-chalk) - an area/play known as 'Freo' - which I don't know about - but this is further down the track.

 

[Agentm]

there is a permit in for marlin 2 in grimes county, i assume thats the well thats going next?

on their maps marlin 2 is a little west of marlin 1

cheers

 

[Dukey]

Just to update - the latest BUR production update is out, with nice 'cumulative' production charts.

http://www.burlesonenergyltd.com/documents/437.pdf

- pretty much confirms our recent discussions
# income = running at about $27000 AUD/day net to BUR = about $ 800000/mnth. or up to $2.4M/qtr (depending on decline rates)

# Marlin 1 starting the initial decline phase.

# Next well to be Marlin 2 - currently sourcing a rig.

# followed by continuous drilling program, and possible low cost well re-entries.

On BUR total costs - including exploration costs
# March QTR = $ 950 000.
# YTD = $ 7.6 Mil.
# Marlin 1 costs were below budget, so June Qtr costs should not be huge.

So all of this would suggest top me that BUR is now Cash flow positive... :alcohol: Another good Marlin hole should see excellent profits so lets hope they secure a rig quick smart.

 

[arguls]

This stock is down now. How do You see share price of this year? I am seaching interesting energy stocks. At the moment very pleased with Otto energy in my portfolio and some canadian energy stocks as pennant enrgy and petrolympic. Some of them explosive stuff.

Good luck.