Australian (ASX) Stock Market Forum

AUT - Aurora Oil and Gas

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Theres been a significant buyer from 21st jan to yesterday who has accumulated 5% of the company. Thats possibly a goof thing, as it gives JP Morgan, The Stewarts, This Mob and "us combined" a good controling stake in the event of any low ball predatory take over offers.

The new mob is called "harbour advisors" from Canada, clearly theres some interest in Canada, which bodes well for the upcoming TSX listing. My opinion is they either really want in, or they really want a portion, because they think they can off load them after the TSX listing for a decent profit. In either case its a good thing for AUT.

I updated my valuations today back on bottom of page 106
 
Euroz update out on AUT stil $3.60 share with significant possible upside flagged.


AUT is tracking well ahead of Euroz 15% risked curve, which thier valuation is based on.
Euroz AUT 15percent risk curve.png
Euroz update well repayment chart.png


Buy with a valuation of $3.60/sh, noting significant upside that can crystallize from
oil price momentum, incorporation of LPG revenues, continued production out-
performance and further growth via acquisition.
Click to expand...
 
The investor presentation has provided the following information on where the 60 (or there abouts) wells will be drilled in this 2011 program. I've decided to do a few calculations on where I see the production being at come the end of December 2011.

Sugarloaf 15.7% (9.5 wells, let's say 9)
Longhorn 31.9% (30 wells)
Ipanema 36.4% (0.5 wells, let's say 0)
Excelsior 9.1% (20 wells)

In order (net wells): 1.413 + 9.57 + 0 + 1.82 = 12.8 Gross producing wells.

Let's say a 10% decline rate per 30 day period, starting from the initial production rate. The most recent well, Franke-1H declined about 12% in it's first 30 days and Turnbull-4H actually had a higher 30 day average than it's initial production, most likely due to Hilcorp gradually 'loosening' the choke setting. Overall, personally I feel 10% would be an accurate estimation considering how well AUT's declines have been performing, especially in recent times.

Please remember that in our recent wells, Hilcorp have been using highly restricted choke settings, and gradually loosening the choke over the first few days I believe, hence just like Turnbull-4H, the actual initial production could well be less than the 10 day production average. So for those who think 10% declines are optimistic, then I urge you to consider the above statement.

Using the latest investor presentation, the IP average from the 17 wells we have information from (9 Sugarloaf, 4 Longhorn, 2 Ipanema), the presentation states the average oil production is 827 barrels per day + the average gas production is 3.01 mmcf/d.

6:1 Ratio = 1329 boep/d
12:1 Ratio = 1078 boep/d

I'll personally use the 12:1 ratio, as it's more accurate for the actual condensate/gas equivalent. We've learnt in the last few days that 6:1 is now used as a North American Industry benchmark, however I don't think it's realistic just yet. If I used the 6:1 ratio figure's stated below would have been higher.

Since some wells drilled this year will experience up to 12 months of declines and some wells will experience 0 months of declines along with the fact that wells are constantly being drilled every week or there abouts, on average each well would experience 6 months worth of declines.

1078 (average IP) *0.9 (less 10% decline)^6 (0.9 to the power of 6 because the 10% declines will be experienced, on average, for 6 x 30 day periods).

That comes out as 572.9 boep/d (12:1) for the average production per gross well drilled in the 2011 program, at December 31 2011.

572.9 * 12.8 = 7333 boep/d

Add on the wells from this year (which are currently producing a total of 1400 boep/d at 12:1) and let's say they'll decline to 700 boep/d total by the end of 2011.

That's 8,000 boep/d, and that's what I'll be looking for come December 31, 2011.

Make of them what you will, that's just how I see things
 
condog said:
Theres been a significant buyer from 21st jan to yesterday who has accumulated 5% of the company. Thats possibly a goof thing, as it gives JP Morgan, The Stewarts, This Mob and "us combined" a good controling stake in the event of any low ball predatory take over offers.

The new mob is called "harbour advisors" from Canada, clearly theres some interest in Canada, which bodes well for the upcoming TSX listing. My opinion is they either really want in, or they really want a portion, because they think they can off load them after the TSX listing for a decent profit. In either case its a good thing for AUT.

I updated my valuations today back on bottom of page 106
Click to expand...

Hey Condog,
I guess that now AUT is in the ASX 200 and will soon be listed on the TSX that more institutional investors and fund managers will be attracted to it. Depending on thier strategies - hold or sell - the SP will vary accordingly. My only problem is the more they hold the less shares are available for the ordinary holder. Glad to be part of "us combined" I wonder what % we would hold :)
 
Sharejon said:
That comes out as 572.9 boep/d (12:1) for the average production per gross well drilled in the 2011 program, at December 31 2011.

572.9 * 12.8 = 7333 boep/d

Add on the wells from this year (which are currently producing a total of 1400 boep/d at 12:1) and let's say they'll decline to 700 boep/d total by the end of 2011.

That's 8,000 boep/d, and that's what I'll be looking for come December 31, 2011.

Make of them what you will, that's just how I see things
Click to expand...

I like your thinking sharejohn

Euroz estimate 5000, I think youve been a lot more detailed and possibly more accurate, but given my way of thinking im happy to take the consensue and go with just over 6000 boepd.

Even at 5000, do thhe maths. 5000boepd * 350 days p.a. per well @ $90 odd = approx $157.5M gross p.a. with PE of 10 = over $1.5B.

Realistically apply a PE of 14-16 and your getting mcap of approx $2.2B to $2.5B

This supports my other valuations back on page 106. :)

Now for a moment imagine if they drill 80+ wells in 2012 what the mcap will be. Those who think AUt growth is finished are gidding themselves, sure i dont think we will see it going 700%+ p.a, but theres still plenty of upside in it, and its been very much derisked.
 
philly said:
My only problem is the more they hold the less shares are available for the ordinary holder. Glad
Click to expand...

I dont see that as a problem, i see it as a huge bonus. Tighly held companies are usually easy to sell at a premium, when your ready to sell. Thats only a problem for non holders.

Rememebr JP Morgan hold 9.68% + 8.54% = 18.22%

Jon and Carrolyn Stewart own somewhere around 6%

Yesterdays announcment puts Harbour Advisors at around 5%.

Between us here and HC we would own another 5-10% id geuss???

Thats a nice controlling stake tos stop TO by predators, but still easily liquid enough to have a good buying and selling market happening.
 
Condog and others: Thanks for all the posts, this thread is excellent reading.

Condog: If you have the time, how do your current calculations and share price predictions come out if you substitute $50, $70 and $100 oil in?
 
Sdajii said:
Condog and others: Thanks for all the posts, this thread is excellent reading.

Condog: If you have the time, how do your current calculations and share price predictions come out if you substitute $50, $70 and $100 oil in?
Click to expand...

$100 & $4.5 at 400 and 1.5mm = approx $6.35
$70 & $3.75 at 400 and 1.5mm = approx $3.17

$100 & $4.5 at 450 and 2mm = approx $8.10
$70 & $3.75 at 450 and 2mm = approx $4.47

Again dont make decisions on this its for discusion purposes only.
 
Reading the investor presentation it stated that the last reserves report did not include 10-15 percent of their land holding.

So IMO worst case scenario is the our reserves will increase by 10-15 percent and i don't think its unreasonable and to see a 40-50 percent increase in reserves. On the back of better than expected declines, increased EUR, hight liquids ratio, and possibly 60acre well spacings.

Also hints of new land acquisition's.

I think with the increased drilling, AUT should be bringing out bi-monthly drilling reports.

Next couple of months will be great IMO.
 
From Euroz they estimate end of 2011 with 5000 boepd

And peak boepd in 2017 of 20,000 boepd

mcap of aut graph.png

Gives a pretty easy mcap estimate and hence extrapolated sp indication.
 
No worries condog, edited the post.

Going by sharejons production estimate for the end of 2011 - 8000BOEPD.

That would put us in the 3.3billion MC - SP around = $8.25.

Do you think this is possible??
 
Agentm said:
which well data do you need angussmart?

i can get you any well data for any well you like. i had no idea conoco were in the oil aspect of the play as yet.

excelsior acreages are in the oil region i believe, eog has had some amazing results in the region they have spent a lot of capital on well exploration development and design.

i have posted up the eog reports a while back and its impressive, their eur's are real impressive, no one is doubting their data thus far i see. (also similar to swifts) also not doubted interestingly!!

eog have nice theory on the oil aspect of the efs, the studies they have done are very clever, its clear there are good argument for the efs being a great play, and the oil window has been a long arduous road for eog with very impressive planning and development

i have see some stunning results in the oil window, and its obvious there are some real good regions. i am keeping a track of many of the new plays and players in the oil window..




sdajii


the efs is really kicking goals.. its been good for many operators that are developing the shale.. the anti efs antagonists are looking weaker and weaker as more and more operators come in and make great inroads into the very lucrative oil play..
Click to expand...


Any of you KIND FOLKS want to indulge an old man's curiousity ? My 1st post here. I came looking for the guns. Sorry if its A about.
Whats the Sugarkane history starting with Lucas selling/leasing to Hilcorp.
Then Texas Crude Energy get in the act,
then Empyrean,
then EKA & Adelphi(becomes AWE)
then AUT are in. Sugarkane seems broken up for deals but I'm not sure by who, into : Sugarloaf with AUT,AWE,EKA & unknown US players with Hilcorp as chief cook & bottle washers.
Longhorn with AUT, Hilcorp & US others unknown?
Ipanema with AUT, Hilcorp & unknown others.
Hilcorp must be indebted to some original land/leaseholder ? Maybe Lucas ?
I've been trying to DMOR, until now i'm my own granma.
Seems in all likelihood the ASX companies that we invest in have already made a sqillion just by putting up some cash. Hilcorp the gun operator is private & I wonder who else is maybe listed on the US market.
I also put up some vague comments about comparing EUR's & M/caps on TXN on HC, because I've run out of betting money & nothing else to do. Regards Japes
 
Condog,
First of all, thanks. Secondly, are the boep/d figures you use based on the production at the end of 2011/2012/2013 etc or are they production averages for the year?

And with the wells, you seem to mentioned a figure like 400 boep/d and 2 mmcf/d. Is the 2 mmcf/d included in the 400 boep/d in your mentioned figures?

Cheers, sharejon.
 

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