AUT - Aurora Oil and Gas
- Thread starter nioka
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Good to see you posting Noika,
are you still doing a bit of swapping with EKA?
are you still doing a bit of swapping with EKA?
NO. The capital gains tax makes it a poor proposition. If itwasnt for CGT I would trade some for TXN but I am over loaded with EKA.However I do believe that EKA is trailing the pack and could well improve from here at a faster rate than AUT. I have too large a percentage of my funds tied up in AUT,EKA and TXN. Never put all your eggs in one basket.
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I agree, but I believe there would be many out there with overbalanced baskets of AUT but how do you fix it? Not a real fan of selling down in the next few months with whats ahead.
It's a good problem to have though.
Cheers.
The only way to fix the tax problem is to let time reduce the tax. It has to be taken into consideration when changing investments. AUT is not the only fiosh in the ocean. I am making larger gains in some other stocks at this stage than I am with holding AUT. Others have more potential than AUT in my estimation allbeit they can carry more risk. Compare the 3 month chart for AUT and EDE.
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Not sure whats going on but the buying side for this stock is the highest ive seen it in probably 6 weeks.
108 buyers for 1,219,513 units..
Whats the deal?
108 buyers for 1,219,513 units..
Whats the deal?
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Cheers Noika,
God I wish I could pay to get a few of the posters here around a table and get up to speed on a few things.
Could you imagine having Mir, Condog, Agentm, Estseon, Sharejon, Noika and others in the same room for a couple of hours?:alcohol:
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Probably could do it with a video conference call if you looked at it. Interesting idea. Probably want to have some clarity of purpose behind it rather than just a long rave.
I've just looked at the ASX 12 month chart for AUT and it confirms my memory of that time: there was no particular price or volume spike around then. Doubtless some ADI money was re-invested, some of mine was (but I'm subject to UK CGT so I am indifferent to the 1 year rule) but there was no wall of investment.
As you say, Nioka, there could be more profit to be made elsewhere by acceptance of more risk. But that will always be the case. Each person will have their own investment strategy and appetite for risk. Not everyone will be trying to work all of their capital as hard as possible.
In my view, AUT has reached the stage where it can be left alone to generate value as an investment. No real need to worry about it relatively speaking. But that does not mean to say that the upside is limited or will take a long time to realise. In terms of time, considering that it has taken from 2006 to get thus far with Sugarloaf and the other acreages, a time horizon of 2 - 3 years for further multiples is not all that great.
In any case, you will doubtless conduct a re-appraisal in July, once your holding qualifies for the lower CGT rate.
I keep hearing rumors of well spacing limitations being lowered but no actual proof the the Railroad commission of Texas has approved this option. My feeble attempts at searching the the Railroad Commission website doesnt show any meetings or documents discussing this option. Any information that you would care to share with me in regars to this topic would be appreciated.
Thanks, Nioka.
I checked AUT nearly one year chart, didn't find much volume of trading around July 2010. The capital gain tax benefit is based on how long people hold the stock rather than financial year, if holding more than 12 month, will only pay 50% of the gain for the tax when people sell the stock in that Financial year. My one year large holding amount will be due on August, but I still like to hold it by then.
Good luck to all AUT holders especially long term holders.
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Yeah, thats a good read Trader,
certainly raises a few issues on declines, time will tell. May also have a bearing on well spacings, if the wells get to close, does that increase declines. I guess we need to ask why 80 acre separation in the first place. Who came up with it and why?
The article also raises some dodgy practices going on regarding auditing.
Cheers.
This has nothing to do with the Rail Road Com. Its a choice of each particular company. Irrespective of what spacing they decide to drill the TRRC has requirment of one well per 320 acres or per 640 acres to maintain the leases.
So what you are seeing first is that they need to punch one well per 640 or 320, depending on the TRRC requirement. Once they have met that requirement, then you may see them choosing to reduce well psacing. But whilever time and capital are required to meet lease obligations they wont be reducing well spacing. The main reduction in well spacing imo will occur in 2013 -2017. They may begin to try a few in late 2011 or 2012 but it wont be on any large scale imo.
Surely though they will choose to drop a couple to learn and prepare for future development plans. As going forward you reaqlly need to know where your future growth is coming from. At some point Hilcorp will have to try and see just how tight they are going to be able to drill this acerage. As if its only going to be feasable to do 60 or 80 acre spacing they will be needing to sure up more acerage. If however they can drill down to say 30 acre spacing, then they will have several extra years worth of development on this acerage.
I think (but do not know) that the 80 acre nonsense is an assumption made in the reserves valuation rules.
As to closer spacing affecting declines, you have to visualise what is happening.
This is my guess - I'm not a petrogeologist:
The rock is impermeable - the O&G won't flow - it might seep but it's not like sandstone. That is why it needs to be artificially fractured or flowed off natural fractures (such as what was done with Kowalik 1 in the overlying chalk). The gas & oil escapes from the rock from the surfaces created by inducing the fissures in the rock. The fast initial decline arises as the gas and oil on and just under the newly created surface escapes.
The drainage area is basically defined by the lateral propagation of the induced fissures. However, though the fissures travel further laterally than they do vertically because of the layered structure of the rock (sediment laid down over millions of years crushed under its own weight and then deposits overlaid), the fraccing crew have to ensure that the fissures do not penetrate the geological seals above and below the formation as, otherwise, as happened with Sugarloaf 1, there could be water ingress from a lower strata or escape of the hydrocarbons into upper strata (not a problem for the shale because the upper strata is the Austin chalk reservoir).
That suggests that the induced fissures are designed to fan out from the periodic penetrations of the casing a distance roughly equal to half the thickness of the shale horizon or somewhere around 75 ft.
That then gives you a basis for calculating the drainage footprint: 2 x 75 x 5,000 sq ft. That is about 17 acres.
A rather long story to get to "20 acre spacings".
The pretty picture will be spoilt by natural fracturing and weaknesses in the rock, which could lead to 'connectivity' between wells drilled closely. AUT had that with a couple of the Turnbull wells - don't think that it gives rise to problems that cannot be solved.
The short length of propagation of the fissures also explains the >20 fracs done on a well. If 75 ft is the right figure, the fissures fanning out from the penetrations will join for fracs at 150ft intervals. They have mentioned 23 fracs in the case of one well, which would be about 200ft intervals.
I don't see how they can frac in zones that have natural fracturing - I would have thought that they would get screen outs.
So that could be the story.
As to closer spacing affecting declines, you have to visualise what is happening.
This is my guess - I'm not a petrogeologist:
The rock is impermeable - the O&G won't flow - it might seep but it's not like sandstone. That is why it needs to be artificially fractured or flowed off natural fractures (such as what was done with Kowalik 1 in the overlying chalk). The gas & oil escapes from the rock from the surfaces created by inducing the fissures in the rock. The fast initial decline arises as the gas and oil on and just under the newly created surface escapes.
The drainage area is basically defined by the lateral propagation of the induced fissures. However, though the fissures travel further laterally than they do vertically because of the layered structure of the rock (sediment laid down over millions of years crushed under its own weight and then deposits overlaid), the fraccing crew have to ensure that the fissures do not penetrate the geological seals above and below the formation as, otherwise, as happened with Sugarloaf 1, there could be water ingress from a lower strata or escape of the hydrocarbons into upper strata (not a problem for the shale because the upper strata is the Austin chalk reservoir).
That suggests that the induced fissures are designed to fan out from the periodic penetrations of the casing a distance roughly equal to half the thickness of the shale horizon or somewhere around 75 ft.
That then gives you a basis for calculating the drainage footprint: 2 x 75 x 5,000 sq ft. That is about 17 acres.
A rather long story to get to "20 acre spacings".
The pretty picture will be spoilt by natural fracturing and weaknesses in the rock, which could lead to 'connectivity' between wells drilled closely. AUT had that with a couple of the Turnbull wells - don't think that it gives rise to problems that cannot be solved.
The short length of propagation of the fissures also explains the >20 fracs done on a well. If 75 ft is the right figure, the fissures fanning out from the penetrations will join for fracs at 150ft intervals. They have mentioned 23 fracs in the case of one well, which would be about 200ft intervals.
I don't see how they can frac in zones that have natural fracturing - I would have thought that they would get screen outs.
So that could be the story.
estseon
Kowalik 1 had natural fractures , I'm pretty sure they fraced 3 out of 4 sections with no problems of screen outs & on the 4 section the liner split on a joint, at the time it was pretty disappointing as kowalik 1 could of been a reasonable result give it was a slotted liner .
Kowalik 1 had natural fractures , I'm pretty sure they fraced 3 out of 4 sections with no problems of screen outs & on the 4 section the liner split on a joint, at the time it was pretty disappointing as kowalik 1 could of been a reasonable result give it was a slotted liner .
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Condog, what are your views regarding the following article on shale decline that was posted somewhere above? I've had a read through it and I wasn't able to draw any conclusions from it relating to the impact (if any at all) on AUT.
http://brontecapital.blogspot.com/
http://brontecapital.blogspot.com/
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Hope so.. We need something to get the SP going in the right direction again.
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Hey guys by the way aurora has a new look website and in fact it's far better than before. Bit if generic info on it.
