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HOG - Hawkley Oil and Gas

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Re: HOG - also what is a go in the time to come ....

Permission already granted for the
Chernetska project.

In addition to the works at Sorochynska, Hawkley is in the process of preparing for the first well at Chernetska. A full project update on Chernetska will be provided soon. The current timetable is as follows:
Well plan – approved
Environmental approval - granted
Land access - granted
Drilling contract – completed
Pipe, casing, mud, additives, drilling bits etc contracts and supply – in progress
Site preparation – commenced
Drilling rig mobilisation – after Christmas
In order to accelerate the progress of the well ahead of revenue from Sorochynska Well #201, Hawkley has secured a loan facility of US$1.25 million. The purpose of the loan is to facilitate the site preparation and the building of a road ahead of rig up early next year.
Cheers form The Netherlands :)
 
Target is 100 million a year...

Ukraine-focused energy explorer Hawkley Oil and Gas Ltd says it is ready to make the leap to energy producer this month.

The company says commercial production from its assets in the Dnieper-Donets basin in Ukraine is expected to begin later this month after a new gas pipeline was completed.

A gas flow of 12.64 million cubic feet per day and condensate flow of 504 barrels per day were obtained during testing, although a flow rate 10 per cent lower was expected once flow was stabilised.

A gas plant has been connected to the pipeline and new equipment has been installed, the company said.

Chairman Paul Morgan told AAP the company was expecting to generate revenue of $US40 million ($A39.41 million) to $US50 million ($A49.26 million) annually, with margins of about 50 per cent.

He said the company may seek a small fundraising to get another well drilled, but now that cashflow would be generated it should be able to afford new rigs.

"We will get another rig out there as soon as we start to see some cashflow out of that well, we will get another well onto Chernetska (licence in the Ukraine), which we hope to get drilled later this year," Mr Morgan said.

"I would like to see a third well, too, and get ourselves to about $US100 million ($A98.52 million) per year revenue," Mr Morgan said.

Hawkley shares jumped on news the pipeline had been completed, and at 1402 AEDT were trading up three cents, or 7.8 per cent, at 41 cents.
 
Ukraine-focused explorer Hawkley Oil & Gas has secured a “buy” recommendation from Hartleys, which calculates that the company is trading at a significant discount to the value of its soon-to-be-producing project and to its peers.

From what I have heard the 6 month target from Hartley's is .68

Blue skies for HOG. SP should reach that target very quickly IMO when production starts this month.
 
easylikesunday said:
Ukraine-focused explorer Hawkley Oil & Gas has secured a “buy” recommendation from Hartleys, which calculates that the company is trading at a significant discount to the value of its soon-to-be-producing project and to its peers.

From what I have heard the 6 month target from Hartley's is .68

Blue skies for HOG. SP should reach that target very quickly IMO when production starts this month.
Click to expand...

I agree, 68c seems very achievable in the short term so long as the flow rates predicted are achieved
 
Hi Emile - greetings from New Zealand.

Thanks for that post - it is interesting that although Hartleys' risked valuation of HOG is currently $0.68, which in itself makes it attractive, they go on to say (p21) that the potential for resources exceeding independent estimates should not be discounted, with consequent valuations in excess of $7.00.
Using the figures from the 5 June 2010 Moyes report, I get a rough unrisked NPV around $3.00 - and this is without considering the implications of the outstanding drilling results of late 2010 - flow rates about 4 times greater than expected ( ref HOG, 8 Dec 2010).
In view of the drilling results, obtained using better control of the drilling techniques than others have used in the past, HOG's independent consultants are currently re-evaluating the entire field, with a view to providing a new reserves and resources estimate. The result was expected late Dec 2010 - early Jan 2011. It's now mid Jan, so an announcement can't be very far away!
In the meantime, of course, they are on the verge of becoming a producer.
 
Thats correct and i am sure they will try to expand the company with the cashflow to come soon ....
We have in my mind a huge potention here ....
Cheers to new zealand, australia and the rest of the world !!!
From the netherlands.

WRONG'UN said:
Hi Emile - greetings from New Zealand.

Thanks for that post - it is interesting that although Hartleys' risked valuation of HOG is currently $0.68, which in itself makes it attractive, they go on to say (p21) that the potential for resources exceeding independent estimates should not be discounted, with consequent valuations in excess of $7.00.
Using the figures from the 5 June 2010 Moyes report, I get a rough unrisked NPV around $3.00 - and this is without considering the implications of the outstanding drilling results of late 2010 - flow rates about 4 times greater than expected ( ref HOG, 8 Dec 2010).
In view of the drilling results, obtained using better control of the drilling techniques than others have used in the past, HOG's independent consultants are currently re-evaluating the entire field, with a view to providing a new reserves and resources estimate. The result was expected late Dec 2010 - early Jan 2011. It's now mid Jan, so an announcement can't be very far away!
In the meantime, of course, they are on the verge of becoming a producer.
Click to expand...
 
Hi
Just joined the site after searching for reviews about HOG. Thanks for the valuable information and discussion. I only happened onto HOG through our local paper investor column then tried to find info on the company. Looks like it has potential, will dip my toes..
 
It is interesting to compare the chart for HOG's production forecast (ref Moyes 5 June 2010) with that for AUT (ref CBA 16 Feb 2011) - they are remarkably similar - if anything HOG's forecast production is larger.

There are, of course, many differences between the two companies - one's in the USA and the other's in Ukraine, for a start, but, setting these aside, we have AUT with a mc of $1262m, and HOG with $58m - that's a 22 fold difference.

Coincidentally AUT has climbed 21 times since its 2009 low, as more and more wells have been drilled and the acreage derisked.

HOG is at an earlier stage of development, but I believe it is potentially another AUT. And AUT itself is still considered well undervalued!

It's also worth noting that this is without considering the implications of the spectacular flow rates obtained in the first Sorochynsckya well - "three to five times original expectations" (ref HOG 17 Feb 2011). The Moyes report will have assumed the originally expected flow rates.

Roll on the spudding in of the first Chernetska well!

An interesting response to today's HOG announcement - initially a gap up, then a gap fill. Tomorrow's another day, I guess.

HOG Moyes 1.jpg AUT CBA 1.gif
 
WRONG'UN said:
It is interesting to compare the chart for HOG's production forecast (ref Moyes 5 June 2010) with that for AUT (ref CBA 16 Feb 2011) - they are remarkably similar - if anything HOG's forecast production is larger.

There are, of course, many differences between the two companies - one's in the USA and the other's in Ukraine, for a start, but, setting these aside, we have AUT with a mc of $1262m, and HOG with $58m - that's a 22 fold difference.

Coincidentally AUT has climbed 21 times since its 2009 low, as more and more wells have been drilled and the acreage derisked.

HOG is at an earlier stage of development, but I believe it is potentially another AUT. And AUT itself is still considered well undervalued!

It's also worth noting that this is without considering the implications of the spectacular flow rates obtained in the first Sorochynsckya well - "three to five times original expectations" (ref HOG 17 Feb 2011). The Moyes report will have assumed the originally expected flow rates.

Roll on the spudding in of the first Chernetska well!

An interesting response to today's HOG announcement - initially a gap up, then a gap fill. Tomorrow's another day, I guess.

View attachment 41433 View attachment 41434
Click to expand...

Astute piece of work wrong un. I'm a strong follower of HOG but I hadn't twigged how comparable the projections were for AUT and HOG. Uncanny.

I thought today was "interesting" to say the least...:confused: You would have to say HOG's batting average was outstanding in terms of meeting production commitments ect. And the cash will be coming in from March.. But it still couldn't hold a few cents of a rally!!.

If the analysis you posted are accurate this has to be the bargain of the year.
 
WRONG'UN said:
It is interesting to compare the chart for HOG's production forecast (ref Moyes 5 June 2010) with that for AUT (ref CBA 16 Feb 2011) - they are remarkably similar - if anything HOG's forecast production is larger.

There are, of course, many differences between the two companies - one's in the USA and the other's in Ukraine, for a start, but, setting these aside, we have AUT with a mc of $1262m, and HOG with $58m - that's a 22 fold difference.

Coincidentally AUT has climbed 21 times since its 2009 low, as more and more wells have been drilled and the acreage derisked.

HOG is at an earlier stage of development, but I believe it is potentially another AUT. And AUT itself is still considered well undervalued!

It's also worth noting that this is without considering the implications of the spectacular flow rates obtained in the first Sorochynsckya well - "three to five times original expectations" (ref HOG 17 Feb 2011). The Moyes report will have assumed the originally expected flow rates.

Roll on the spudding in of the first Chernetska well!

An interesting response to today's HOG announcement - initially a gap up, then a gap fill. Tomorrow's another day, I guess.
Click to expand...

That is an impressive comparison wrongun!! I LIKE it:D In fact I think I might load up on more of these given the almost complete lack of interest currently shown by buyers - I was surprised that production ann didn't attract more?
 
Hi guys

Magic Man i took a look at HOG and yes i very much like what ive seen so far. Obviosly a lot of derisking to occur yet, but that first well in what they knew would be a producing zone is fantastic. The other thing i really like about it is the dry gas is double the price then in the US, making the well lives much longer and far more economic in the first place.

To me it looks like they may be on a very very big winner if things pan out as planned. Thier potential flows and reserves to EV ratio will be rediculous if they get this right.

Obviously a need for a small CR if they are to accellerate things.

Looks to me like it has potential to be a multi-bagger like AUT, but still a lot of unknowns that need to be sorted out.
 
In particular, i like that its revenue from its first well , in what looks like will be a prolific producing zone , produces almost as much gross revenue as the mcap of the company. That to me lowers risk somewhat.
 
condog said:
Hi guys

Magic Man i took a look at HOG and yes i very much like what ive seen so far. Obviosly a lot of derisking to occur yet, but that first well in what they knew would be a producing zone is fantastic. The other thing i really like about it is the dry gas is double the price then in the US, making the well lives much longer and far more economic in the first place.

To me it looks like they may be on a very very big winner if things pan out as planned. Thier potential flows and reserves to EV ratio will be rediculous if they get this right.

Obviously a need for a small CR if they are to accellerate things.

Looks to me like it has potential to be a multi-bagger like AUT, but still a lot of unknowns that need to be sorted out.
Click to expand...

It does look very, very good.... doesn't it.. Actually it doesn't appear as if HOG will need to do much external CR. Excellent surplus cashflow is already coming from the oil and gas sales and they borrowed some internal funds to kick off the preparations for the next drill.

And of course Coondogs magic touch has already kicked HOG along by 3c this morning.:D

The other really interesting tidbit is that after the first well showed the 400% increase in flow rate HOG has decided to review the reserves in the reservoir. If in fact this increase in flow rate also reflects a significant increase in reserves just keep multiplying the figures.:D:D

It will be interesting to see how long before the penny drops and a serious re rating begins for HOG.
 
In particular, i like that its revenue from its first well , in what looks like will be a prolific producing zone , produces almost as much gross revenue as the mcap of the company. That to me lowers risk somewhat.

If they pull off a 2nd well with similar flows, then i think a PE of 5 would be on the cards and if they have revenue of over $100M then thats a 5 bagger, surely??

More realistically it should climb ot a PE of 10 in due course with say 3 or 4 producers , then it would begin to resemble AUT. In fact id probably say this has more growth potential then AUT had when i found it.

But be warned "potential" doesnt necesarily become reality.

Disclaimer - I hold.
 

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