AUT - Aurora Oil and Gas

[condog]

USD 821,500 in cash and 900,000 new EKA shares

761 Acres @75% NRI. = 570.5 Net Acres

900,000 shares at say 27c = 243,000

821500+243000=$1064500

1064500/570.5 = $1865 per net acre.

At $15M NPV per well say 50 acre spacing it can provide 11 wells $165M

Using a 20% value on future NPV , they just added something like from $16 to$32M to the value of a TO of EKA, for a little over $1M dollars. = 10c - 20c per share for a TO.

Wonder who leaked it to the market yesterday?

Smart move imo.

 

[martyfar]

USD 821,500 in cash and 900,000 new EKA shares

761 Acres @75% NRI. = 570.5 Net Acres

900,000 shares at say 27c = 243,000

821500+243000=$1064500

1064500/570.5 = $1865 per net acre.

At $15M NPV per well say 50 acre spacing it can provide 11 wells $165M

Using a 20% value on future NPV , they just added something like from $16 to$32M to the value of a TO of EKA, for a little over $1M dollars. = 10c - 20c per share for a TO.

Wonder who leaked it to the market yesterday?

Smart move imo.

Arrrrrgh don't ya luv it, nice ta see the little guy gettin a well placed punch in now and agin ...thanks for the info Condog

 

[condog]

New AUT presentation out, it must be being presented to someone by someone??

No biggies, other then they keep mentioning imminent reserve maiden report due. Also they finally talk about closer well spacing.

The other newby is the flow data which looks fantastic. They show T1 on a restricted choke and T2 on a highly restricted choke. That being the case those flows are excellent if in fact they sure up much lower declines, which seems to be the case so far and elsewhere in the Eagleford.

 

[prgudula]

Aurora is positioned for an active and successful 2010 and beyond.
Quality Asset / Significant Size
Positioned in one of the premier North American shale plays
Initial 2C net resource of 38mmboe (post farmout and after royalties but before 2010 well results) –maiden Reserves Report imminent
Strong Economics
Strong technical merit, high liquids ratio, good flow rates, low reliance on gas prices
Fast well payback timeframes and majority of development paid out of cashflow
De-risked by Quality Farm Out
Large, competent US Operator experienced with large onshore assets
10 well carry de-risked project
Low Company Valuation Relative to Peer Group and Asset Value
Largest Sugarkane participation of listed juniors with lowest value per acre and per barrel
Pure investment opportunity in to sweet spot within the Eagle Ford
Sound Balance Sheet
No debt, US$40m cash, no debt
Huge Growth Potential
Project maturity through continuous drilling to deliver production and profit growth for many years
25

 

[rockhound308]

Hillcorp have a new well well/lease application on the TRRC. At 1.8 km NE of Morgan the "Direct access Unit" should be a goodie.

 

[condog]

Aurora is positioned for an active and successful 2010 and beyond.
 Quality Asset / Significant Size
 Positioned in one of the premier North American shale plays
 Initial 2C net resource of 38mmboe (post farmout and after royalties but before 2010 well
results) – maiden Reserves Report imminent
 Strong Economics
 Strong technical merit, high liquids ratio, good flow rates, low reliance on gas prices
 Fast well payback timeframes and majority of development paid out of cashflow
 De-risked by Quality Farm Out
 Large, competent US Operator experienced with large onshore assets
 10 well carry de-risked project
 Low Company Valuation Relative to Peer Group and Asset Value
 Largest Sugarkane participation of listed juniors with lowest value per acre and per barrel
 Pure investment opportunity in to sweet spot within the Eagle Ford
 Sound Balance Sheet
 No debt, US$40m cash, no debt
 Huge Growth Potential
 Project maturity through continuous drilling to deliver production and profit growth for
many years

Yes its a good way to finish a preso and that last dot point certainly puts investors nerves at ease.

 

[McCoy Pauley]

New AUT presentation out, it must be being presented to someone by someone??

No biggies, other then they keep mentioning imminent reserve maiden report due. Also they finally talk about closer well spacing.

The other newby is the flow data which looks fantastic. They show T1 on a restricted choke and T2 on a highly restricted choke. That being the case those flows are excellent if in fact they sure up much lower declines, which seems to be the case so far and elsewhere in the Eagleford.

Interesting to see the covering letter to the ASX from the AUT company secretary advising that the slides were from a presentation being made in Hong Kong and Singapore.

Worth keeping an eye on the share registry in the next few weeks. AUT could be looking at attracting some interest from south-east Asia and China into the registry.

This post comprises speculation only, so DYOR.

 

[condog]

These charts below are from the 6th Oct 09 Broker Presentation from the AUT website. http://www.auroraoag.com.au/media_pres.asp

Thought now where getting away down the track and have our maiden reserve report about to be unleashed they might provide some insight to the way the company and brokers think.

Hartleys are tipping a 300% upgrade from 7% ultimate recovery to 22% ultimate recovery.





Note: I have doctored the last image to show current market capitalisation.

This is the original Resource estimate. Note this is pre farm in so AUT has half these figures Net.

Form Hartleys most recent report
We are expecting ~50 million barrels of oil equivalent in total reserves (1P, 2P, 3P combined).

Maiden Reserve Report July 2010
Netherland, Sewell and Associates Inc (“NSAI”) undertook an independent resource estimate over Aurora’s acreage in September 2009, as depicted in the figure below. At this time, no multi stage fracture stimulated horizontal wells had been drilled and a conservative recovery factor for the Eagle Ford Shale of 7% (Best Estimate) was used. Given well performance on the acreage and recovery factors achieved in other shale plays it is possible that an ultimate recovery factor of 22% may be more appropriate. Our time with the Texas Crude geologist also highlighted large potential upside in the development of the shale, as it may be possible to produce from multiple horizons over the interval and also decrease well spacing significantly. This all depends on assumptions around whether the current fracture stimulations are resulting in drainage of a small percentage over a large area, or a large percentage over a small area.
Whilst it is hard to predict what assumptions NSAI will use for the maiden reserve report, we believe that there is potential for an upside surprise for the market. A significant portion of the field has been proven by wells (see Fig. 2), which should contribute towards a decent 2P number, although we expect that most reserves will be categorised as 3P until more wells are drilled and there is more production history.

Conclusion – Expect Further Upwards Revisions
Aurora is well funded to participate in up to 40 wells over the next 18 months, with a further 450+ wells possible over the following years. We have only included 330 wells in our current model and have also risked the projects by 20-35% until more wells are drilled and there is more production history. Recent well results suggest that our assumptions are conservative on flow rate, GORs and also drilling costs.
We expect that, as further results are known, adjustments to our assumptions and relaxing of discounts associated with risk will result in upwards revisions to our valuation and price target.
We continue to rate AUT as a Buy and have increased our price target from 102cps to 123cps.

And Euroz comments

Our $1.18/sh price target refl ects the valuation metrics applied to Sugarloaf in ADI’s
target statement.
Strong results from the forward programme (particularly Longhorn) will give cause to
reduce our 30% discount factor. Coupled with model economics benefi tting from lower
drilling costs (Euroz assumes US$8m/well vs. current <US$7m) and lower decline rates
(as witnessed by Petrohawk) this would directionally move our valuation towards $2/
sh.Corporate machinations are evident from heightening acquisition activity in the play –
Shell, Talisman and Reliance have all recently entered the liquids-prone part of the Eagle
Ford play.
Investment Case:
AUT is now fully funded to participate in an accelerated drilling programme that has
been driven by IP and production data that are some of the best reported in the Eagle
Ford trend to date. We remain attracted by the leverage to the oil price that is offered
via investment in AUT as well as the low risk and scalable growth to production and
earnings in the medium term. Buy.

 

[jancha]

Yep . a clear bust out north of that channel would see me take an entry . NOT on todays action as yet tho... big chance of it returning to base of channel on todays action so far ... watching like a hawk .....

scroll back a bit mate i have posted chart and MY unique form of analysis on the thoughts on this current channel

Watching like Hawk hey Nun?
Just wondering if you took entry in Aut or were stirring the pot just a little as you haven't posted anything much on here since Aut headed up in reasonable volume to $1.
Be interesting to know your thoughts now or have you taken flight?

 

[sam76]

Watching like Hawk hey Nun?
Just wondering if you took entry in Aut or were stirring the pot just a little as you haven't posted anything much on here since Aut headed up in reasonable volume to $1.
Be interesting to know your thoughts now or have you taken flight?

Good post.. I think a lot of people who have been following this thread have been wondering the same...

 

[nunthewiser]

Watching like Hawk hey Nun?
Just wondering if you took entry in Aut or were stirring the pot just a little as you haven't posted anything much on here since Aut headed up in reasonable volume to $1.
Be interesting to know your thoughts now or have you taken flight?

Traded it from 90 - 96

and as stated before NO i was not here to stir merely to keep an even balance to the "sure thing " stuff happening every hour.

currently not in and merely view AUT as a trading stock which i will drift in and out of as i see fit as mentioned other times in this thread.

Now are you merely stirring or are you actually intrested in my trading moves?

 

[nulla nulla]

Good post.. I think a lot of people who have been following this thread have been wondering the same...

Play the ball, not the man. We are better than this........aren't we?

I didn't trade it. I was more of the opinion it would retrace. I see it has dropped back from the $1.00 mark and volumes not that hot.
I hope people locked in some profits. I Will continue to watch for the time being.

 

[mir]

" not that hot."
then have a read of this.


Price Target: $1.50



Reason For Update: Site Visit & Operations Updates



What We Know:

We have just returned from site, after undertaking a comprehensive review of all operations within AUT's acreage, as well as meeting the Operator, Hilcorp.

Total gross production for the Jun Q from the 6 wells operating over the period totalled 172kbbls and 1.0Bcf (vs. 48kbbls and 404mmscf as at Mar 31).

AUT released the 60 day production results from Rancho Grande-1H - 57kbbls and 163mmscf were produced

First revenues are likely to be received via Kowalik-1H production early in the Dec Q, with first revenues expected from the farm-in wells expected late in the year post the cost recovery (by AMI).

We expect a maiden reserve announcement for AUT within the week.

The Kowalik re-drill was completed to 18,500ft in 20 days.

We understand that Turnbull-3H (Longhorn – AUT 25%) has completed the first of a multi-phased fracture stimulation and clean-up process, designed to harness max. production from all frac-stages.

Turnbull-1H 60 day production data is expected shortly.

The first of the Ipanema (AUT - 30%) wells is due to spud within the week, as is the next Sugarloaf (AUT - 10%) well - Luna-1H.

Petrohawk's (US listed) recent Jun Q'ly identified its Blackhawk acreage - neighbouring the Longhorn AMI to the nth-east - as the most prospective in its portfolio and the main area of focus going forward.



What We Think:

We cannot help be impressed by the Operator: Hilcorp remains committed to minimising costs but ensuring that best practise is incorporated to maximise well performance.

The technical and commercial strengths of the Operator are clearly complementing the favourable physcial characteristics of the Sugarkane acreage as witnessed by the Jun Q'ly and recently reported well production data:

PHYSICAL CHARACTERISTICS - The uniquely overpressured, liquids rich Sugarkane Field has underpinned:

High Initial Production - The best-in-play Morgan-1H IP of 30mmscfe/day

High Rates of Recovery - Morgan-1H is expected to pay back the ~US$6.5m tied-in well capex within 4mnths

Early Stabilised Production - Weston and Kennedy-1H already displaying 'plateau' rates of decline (ie <10% month-on-month) within 6months of initial production

Sustained Liquids Production - stable CGRs, noting the Conoco’s 'discovery' Kunde-1 vertical well (producing for +3yrs)

TECHNICAL EXPERTISE - Hilcorp has achieved:

Faster Drilling Times - Kowalik-1H re-drill - the longest well undertaken in AUT's acreage to date - was drilled in 20 days

Improving Production Volumes - Rancho Grande-1H is still producing at +800bopd and +2mmscf/d on restricted choke

Lower Rates of Decline - Month-on-month decline rates (based upon gross month production) at Rancho Grande-1H have been <20%; well below our forecasts (40% month 1 and 25% month 2) and the declines of up to 60% reported elsewhere in the Eagle Ford

COMMERCIAL STRENGTH - Hilcorp provides:

Access to Essential Services - 2 drill and 1 frac crews currently working within AUT's acreage; 3 drill crews expected to be in operation by January

Industry Leading Technology - Flex rigs providing for faster mob/de-mob. and drilling times

Vertical Integration - Hilcorp provides access to existing and proposed (completing a new gas pipeline and working towards FID for an additional oil pipeline through the field) pipeline infrastructure, trucking, marketing and sales

The results to date should underpin an impressive maiden reserve for AUT.

We believe that upside to the forthcoming reserve statement will be a function of horizontal and vertical drilling density as well as improvements to recoverability achieved via Hilcorp's on-going refinement of frac'ing techniques.

We view that Hilcorp's utilization of science will result in significant improvements to initial and total monthly production volumes - forthcoming results fromTurnbull-3H should be the first opportunity to witness these latest improvements.

Hilcorp’s low drilling and operating costs can reasonably be expected to reduce further with increasing economies of scale and optimisation of field development scheduling.

Directionally, we can foresee the JV consistently achieving US$6m drill-complete-and-tie-in and US$10k/well/mnth operating costs - well within our current US$8m and US$15K/well/mnth forecasts.

A keener understanding of commercial agreements has prompted us to reduce our discount to our oil price assumptions and increase our average NRI to 75% (from 71%).

We have retained our 25% discount factor as we await results from the next suit of drilling results and fracture stimulation modifications at Turnbull-3H - continued strong results will prompt us to reduce our risking.

Our valuation has improved to $1.50/sh.

We can achieve well in excess of $2/sh on an unrisked basis.



Investment Case:

On-going drilling and production results and a maiden reserve present obvious catalysts for AUT in the short-term. The latest production results serve to further embellish the credentials of the Sugarkane Field as well as the Operator, Hilcorp. We remain attracted by the leverage to the oil price that is offered via investment in AUT as well as the low risk and scalable growth to production and earnings in the medium term. Buy with a valuation and price target of $1.50/sh

 

[condog]

There still drilling and fraccing every day adding value.

The reserves upgrade is imminent.

Euroz update to $1.50 Target - Courtesy of MIR

Price Target: $1.50


We can achieve well in excess of $2/sh on an unrisked basis.

 

[estseon]

The broker is clearly completely bowled over by Hilcorp's operations.

TCEI drilled Kowalik 1 in 2008 using underweight mud to complete with slotted liner and managed a lateral of 4,600ft after 111 days.

Hilcorp managed to redrill with a 6,500 ft lateral completed with cement liner in 20 days.

The TCEI well flowed strongly initially but blocked up pretty quickly.

Hilcorp is managing decline rates downwards but Weston and the wells that it has drilled are all continuing to flow strongly.

Hilcorp is just streets ahead and it's not as though TCEI were lumbering much behind ConocoPhilips in Live Oak, just a few kilometres away (EME has an interest in 5 of those wells and reported the operations, such as they were).

 

[jancha]

Traded it from 90 - 96

and as stated before NO i was not here to stir merely to keep an even balance to the "sure thing " stuff happening every hour.

currently not in and merely view AUT as a trading stock which i will drift in and out of as i see fit as mentioned other times in this thread.

Now are you merely stirring or are you actually intrested in my trading moves?

Im glad you clarified that nun.
Was only pointing out that you had dropped off posting when Aut jumped up in volume & missed your response to it.
And yes even tho i see Aut as a fundermentally driven stock i still like see your perspective in where you think Aut heading from here.
Good see you made a profit while you were in.
P.S. Anyone who trades knows there's no such thing as a "sure thing".

 

[nunthewiser]

And yes even tho i see Aut as a fundermentally driven stock i still like see your perspective in where you think Aut heading from here.
P.S. Anyone who trades knows there's no such thing as a "sure thing".

Personally think it will retest the previous 87/88 resistance which SHOULD now provide support , hence my trailing stopout at 96 earlier . IF 88 area dont hold its back to the channel game , if that breaks lookout, IF it bounces off it north again i will re-enter.
MAY bounce off this point also(96 ish) without a retest as the tail of today closed a previous gap, if thats the case a break of 102ish(on vols) would see me back in.

any entrys taken use stoplosses.
any trades taken and in profit use trailing stops

 

[condog]

This market is like a moody beast. One day it wants to rip you off and charge a fortune for shares in a great company. The next day its screaming blue murder and wants to throw them back at you.

Enjoy and take advantage of the moods. Funny thing is the underlying assett that your buying and selling hasnt really changed.

 

[nioka]

This market is like a moody beast. One day it wants to rip you off and charge a fortune for shares in a great company. The next day its screaming blue murder and wants to throw them back at you.

Enjoy and take advantage of the moods. Funny thing is the underlying assett that your buying and selling hasnt really changed.

Its nothing at all to do with charts, gaps and crystal balls etc. Its all to do with the market fall in the USA and the fall in the price of oil. Remember the stock market and the futures market need volatility to survive and for one trader to make money another must lose some. Give it a day of two and the news will be reversed with oil stocks falling and consumption rising, the dow getting a spurt on and back to increasing prices. Manipulation is the name of the game.

Regardless of the day to day price I'd hate to be out of this stock at any time now as the SP is dependant on news and there is news aplenty due to hit the screen. If it does get to the 80s I'll buy more but I'm not holding my breath.

 

[condog]

Its nothing at all to do with charts, gaps and crystal balls etc. Its all to do with the market fall in the USA and the fall in the price of oil. Remember the stock market and the futures market need volatility to survive and for one trader to make money another must lose some. Give it a day of two and the news will be reversed with oil stocks falling and consumption rising, the dow getting a spurt on and back to increasing prices. Manipulation is the name of the game.

Regardless of the day to day price I'd hate to be out of this stock at any time now as the SP is dependant on news and there is news aplenty due to hit the screen. If it does get to the 80s I'll buy more but I'm not holding my breath.

Thats what im getting at, this brilliant little coy is still a brilliant little coy adding value 24/7, even if the market and its participants are in a somewhat unlikable mood. Spells opportunity to me