AUT - Aurora Oil and Gas

[stefan_invester]

what i don't get is
why is there so many people selling at these prices?
if AUT is so under valued, than wouldn't they wait, and
make the buyers bump up the price?

oh well, guess we just gotta hold on

 

[condog]

Calcs update from around pg 16 or 17 of this thread.

9c drop in Aussie dollar since i did those calcs. Oil has dropped around $10. Gas is not different enoough to worry.

Im unsure of any currency hedging for well expenses. But assumming AUT has no hedging, i approximate the currency drop has roughly offset the decline in oil price.

I punched in a few numbers and the results are so close to previous numbers they are not worth changing. 1-2% either way max.

Note do your own research and ALWAYS seek expert advice that takes into account your individual circumstances.

 

[estseon]

What people are selling AUT?

It took me 10 mins to fill a moderate buy order at the offer price,

There's no stock on offer at the moment.

 

[stefan_invester]

yeah,
theres about 34 sellers selling 1,060,554
and 37 buyers buying 1,088,470, so im guessing
this is the reason for the constant fall in sp?

 

[estseon]

There is news awaited and a defence document containing a new valuation of the S/L project due by 31 May. It's not surprising that the SP has stalled. ADI holders will await a revised bid from AWE. If AWE is to succeed, it will have to offer some premium over valuation. AUT might lag a bit but timing is not really that important. If the value is there, it will emerge and then be further developed.

 

[stefan_invester]

hmm

extremely low volume on AUT trading today
could this be a sign of something?
does anyone know? or have any ideas?

 

[Slipperz]

Another company enters the eagleford play at $1700 per acre in the oil window.

http://info.drillinginfo.com/urb/adactivity/eagle-ford-ad/2010/05/goodrich-jumps-into-the-eagle-ford-oil-window/

 

[Ramblin Round]

Slipperz, I've been hearing of Goodrich a lot around here lately. They hustled in pretty quick. Sounds liek a friend of a friend of a friend opened the door for them. Pure speculation of course.

 

[condog]

hmm

extremely low volume on AUT trading today
could this be a sign of something?
does anyone know? or have any ideas?

yep good disciplined holders that know the value, not willing to sell just becasue some panic merchants in other stocks dump. Thats a sign of value, and the low volume is fantastic, as it only builds buyer pressure for a bounce.

 

[WRONG'UN]

Interesting link, Slipperz

Well cost: $5m
Laterals: 4,500 - 5,000 ft
Yield: 350mboe per well (90% oil) - worth $US24m @ $US69/b

The $5m well cost is at the low end of reported well costs - if AUT can achieve the same it will dramatically improve their ability to self fund ongoing well development.

 

[stefan_invester]

I'm Thinking today is going to be the worst day for AUT
indicative price is already at 0.735.

I think that we just need to get through today, and
next week should be better... or atleast i hope so

anyone have any thoughts on the current situation please?
thanks.

 

[condog]

marketis like a moody monster , it provides buying opportunities on days like today and selling opportunities on others.

not too concerned.

Greece is a worrry, for europe but US looking good.

AUT already way under priced so any correction imo will be short lived and quick to return

CGT implications prevent a lot from selling.

ADI is pegged at 40c due to TO

any time we slip below 80c we become an attractive swap proposition for ADI holders, so other then a few panic merchants this morning it should rebound mid morning or arvo.

 

[Agentm]

marketis like a moody monster , it provides buying opportunities on days like today and selling opportunities on others.

not too concerned.

Greece is a worrry, for europe but US looking good.

AUT already way under priced so any correction imo will be short lived and quick to return

CGT implications prevent a lot from selling.

ADI is pegged at 40c due to TO

any time we slip below 80c we become an attractive swap proposition for ADI holders, so other then a few panic merchants this morning it should rebound mid morning or arvo.

cant see any reason for adi holders to swap, selling to the short termers whom are willing to buy atm is not going to help anyone.. they will just take anything on the upside and sell immediately

adi holders would be better served in holding as the advice from adi has been.

re the volatility of aut, its pretty much a staggering thing.. but EKA is not at all volatile in any way,..

great buying opportunities right now

the second turnbull well is complete and the third turnbull is about to spud

its obvious the average punter has no fraccing idea whats going down atm..

waiting for the low point in the volatile aut share and will be taking full advantage.. and definitely a huge strong HOLD on all adi shares..

lots of news is on the horizon imho.. lots of very positive news

 

[condog]

Agent as a heavy holder of aDI i dont expect you to acknowledge a reason to swap.

But its pretty well established a 2:1 ratio is the minimum, below that AUT is ggod value.

Givent the Turnbulls are iminet a 2:1 ratio is too cheap.

 

[estseon]

condog,

it's a special situation. The ADI directors should have recommended the bid had they thought that they could not justify a materially higher fair value. I would expect AUT to revalue on the back of that but ADI holders might expect a bid premium from AWE if it is serious. So, I think that normal rules are suspended for the next 10 days/2weeks.

I reversed my sale, kept 25,000 free ADI shares and acquired a few thousand more AUT free. But I'll be retaining my main ADI holding for the time being. I'd be nuts to switch before the release of the Target Statement.

Flows 50% higher than Petrohawk, as they keep pointing out, seems to be hinting at recoverable reserves based on Petrohawk's per well estimates as 50% higher as well. Hartleys had a short-term price target of 45 cents for ADI in March based on the Petrohawk estimates. Applying simple arithmetic suggests 67.5cents + premium but we'll see.

AUT will adjust in due course but there is a bid premium to be collected on the other side.

 

[Agentm]

Agent as a heavy holder of aDI i dont expect you to acknowledge a reason to swap.

But its pretty well established a 2:1 ratio is the minimum, below that AUT is ggod value.

Givent the Turnbulls are iminet a 2:1 ratio is too cheap.

condog

i would swap in a heartbeat if it made sense to.

as estseon says, i would also be nuts to swap out.. i am buying AUT right now, but only because the value is there.. with the turnbull 3 well on the way and the rancho well about to demonstrate its flow.. and more rigs to arrive any day out there.. all very very positive for aut..

AUT will only appreciate on the base that the ADI bid is creating for it..

100 cents is where it should be right now.

cant see AWE staying out of the jvp partners in the future, so i view AUT as a future takeover target..

condog, you would have no idea of the size of my holdings in adi.. nor in AUT.. but your wrong in assuming i cant see things as a result of the size of my holdings..

AUT is great value for those like me who can see through the volatility, see the value in the upside in the near term.. but most of the aut upside will be driven by the bidding on ADI.. which has a long long way to go..

 

[condog]

condog

i would swap in a heartbeat if it made sense to.

as estseon says, i would also be nuts to swap out.. i am buying AUT right now, but only because the value is there.. with the turnbull 3 well on the way and the rancho well about to demonstrate its flow.. and more rigs to arrive any day out there.. all very very positive for aut..

AUT will only appreciate on the base that the ADI bid is creating for it..

100 cents is where it should be right now.

cant see AWE staying out of the jvp partners in the future, so i view AUT as a future takeover target..

condog, you would have no idea of the size of my holdings in adi.. nor in AUT.. but your wrong in assuming i cant see things as a result of the size of my holdings..

AUT is great value for those like me who can see through the volatility, see the value in the upside in the near term.. but most of the aut upside will be driven by the bidding on ADI.. which has a long long way to go..

I agree with everything you say about ADI bumping AUT value up based on bid premiums and relative value.

However i also very much support the stance that AUT could stand the heat alone, given whats happening behind the scenes. No doubt ADI helps significantly, but AUT right now imo is a prime asset rapidly appreciating in value, irrespective of what market emotions are doing to sp.

I stand by the fact any time its under 2:1 its an absolute screaming by to short term ADI holder, as it provided a lot of value on the swap. With turnbulls about to crack and Ipenema its even better value now at 2:1.

Theres some possibilities of quick cash in aDI if they raise the bid, which i think they will have to, but thats not a given. $1 for AUt is still cheap in my opinion. But i do hold and am biased.

Imagine if the T/O does get up , irrespective of price. All those eagleford investors currently holding ADI will look for exposure to the same project through either AUT or EKA, some may look elsewhere at AZZ.

But id imagine at a minimum $30M will be looking for a home in AUT. At average 85c thats 53 million shares ADI holders will be looking for.
This week seelers have averaged about 1m on low turniver, on big turnover days we often sit below 200k sells. Where in the hell are 53Million AUT shares going to come from, and what will that do to the sp.

My guess is it will rocket us past the $1.20 mark and then managment would be stupid not to do a $20M CR and advance drilling on longhorn. Or even find some new acerage in the oil window and look for a new JV partner.

EKA id imagine will face the same wonderful problem. AUT should even consider and EKA T/O if they can forsee this.

Just my hypothesis, feel free to disagree.

 

[estseon]

What is pretty certain is that ADI directors will reveal a fair value for ADI materially above that implied by the current offer price and that will be by Monday week. Quite how the market positions itself in advance of then remains to be seen. However, it must be tempting to AUT & EKA shareholders to do a bit of trading even if it is only to grab an uplift on the back of the statement and return before a revised offer from AWE. I'm not suggesting that any of the large holders will sell out - the market's too thin to accommodate that anyway. But many might be tempted to have a small dabble.

I won't - most of my holding is there anyway.

But it will be AWE driving the prices, not fundamentals, for the next few weeks at least. Many of the ADI long-term holders will want to squeeze that fruit dry before moving on. Some need to see 50% + rise just to get their money back. It's painful to sell at a loss even if the logic may be there. They've had a very fraught time of it just as I have had with EME. This project has now been going for over 4 years. All of the progress has been made in the last 5 months.

 

[condog]

Your dead set right about the last 5 months, they have turned this from a company with potential, to one with a very bright future.

We will have enough news flow to drive past current prices on Ranch, T1, T2, T3 and IP1, irresepcitve of what AWE does. Right now with a 40c offer on the table its hard to see AUT going below 75c range, and with the news flows coming it should rocket away from that range.

The question you got to ask yourself is if ADI is so cheap at 40c that someone wants to buy the company, and holders dont want to sell, with 6 wells, then what is AUT worth with 10 wells and the extra acerage. On that basis 75-80c looks rediculously cheap.

 

[AngusSmart]

New Updates on Aurora

Turnbull #2H
Aurora has been advised by the Operator that the Turnbull #2H well has been drilled to a final depth of 16,854ft and the production casing has been run and cemented in place with over 5,000 ft of reservoir section. The well is now ready for a multi-stage fracture stimulation operation similar to that carried out in recent Aurora well stimulations.

With the completion of the Turnbull #2H well operations the rig has now skidded to an adjacent well location on the same drilling pad and is presently preparing to spud the Turnbull #3H well.

These wells arent shared bu Adi and eka are they? i wasnt aware they were doing them at the same time as the Joint venture lot.. sounds good anyway!!