ADI - Adelphi Energy

[nioka]

those dumping out of adi at the moment are imho are really not undersatnding the situation out there in texas..

Today,74,034 shares traded for $19,113.

Hey! that's not dumping.

That is just the odd few sales by some needing cash. More like a few people getting out of investing in a troubled market. I bought a few more AUT and EKA today (no ADI sold) So for every seller there is a buyer.

Today's prices don't matter to anyone holding. Don't worry. Just ignore them unless you want to buy. It's the price that we see AFTER the drilling results that will count. Until then just count groundhogs.

 

[seasprite]

Commercial flows are almost certain imo.

Soon we will see ADI may even let some more positive news come out over the next few announcements.

Yeah , I hope they put exciting words like SIGNIFICANT ,SUBSTANTIAL , OUT STANDING in big bold capital letters (flashing Neons) .

Pressures must be extremely high to produce a 50ft (15.2m) flare on a continuous bases . I just hope the next announcement is timely and coincides with a rebound in the DOW and not another slide because that will not be of any benefit whatsoever in a falling market.

 

[mick z]

Today,74,034 shares traded for $19,113.

Hey! that's not dumping.

That is just the odd few sales by some needing cash. More like a few people getting out of investing in a troubled market. I bought a few more AUT and EKA today (no ADI sold) So for every seller there is a buyer.

Today's prices don't matter to anyone holding. Don't worry. Just ignore them unless you want to buy. It's the price that we see AFTER the drilling results that will count. Until then just count groundhogs.

nioka,

looking at the sugarloaf project only, EKA has by far the best leverage of the au jvp's ( as of today )

eka 10c 82mil shares

adi 25.5c 120 mil shares

aut 25c ?????

like you i also bought more eka today, it must have been just you and who bought eka today.


mick

 

[Lucky_Country]

Yeah , I hope they put exciting words like SIGNIFICANT ,SUBSTANTIAL , OUT STANDING in big bold capital letters (flashing Neons) .

Pressures must be extremely high to produce a 50ft (15.2m) flare on a continuous bases . I just hope the next announcement is timely and coincides with a rebound in the DOW and not another slide because that will not be of any benefit whatsoever in a falling market.

Not sure we will see a massive run up on the release of outstanding flow rates more a sensible climb on each well proving to be commercial.
4 wells minimum producing oil and gas would put ADI into the mid teir producer problem is it may become a takeover target and it has way to much potential USA Indonesia Yemen all are impact targets.
Indonesia will be interesting to find out more about the project tho

 

[nioka]

nioka,

looking at the sugarloaf project only, EKA has by far the best leverage of the au jvp's ( as of today )

eka 10c 82mil shares

adi 25.5c 120 mil shares

aut 25c ?????

like you i also bought more eka today, it must have been just you and who bought eka today.


mick

3.04 pm 20,000 @ 10.5c Definitely get's more of sugarloaf than any of the others today.Should have put in the order for more as there were another25,000 at the same time at the same price.

ADI, AUT and EKA all good value in my opinion. The longer the groundhog lingers the better off I seem to be. But I do want it to end soon.

 

[seasprite]

Consolidation is the name of the game lately . We have seen it with NXS & AZA attempt.
BG/ORG attempt
ROC/AZA
QGC/RPM
DLS/GOG
COE/IPM
AWE/ARQ to name a few.

I suspect STO will do some sort of deal in the near future as well with another prominent player so it doesn't become a target, possibly BPT .

It is becoming difficult nowadays to raise funds , we have seen that with ADI's rights issue and with the credit crunch it will be even harder for companies to get loans . So maybe AWE might take advantage of its holdings to have exposure to the US market . Time will tell .

 

[Hatchy]

Not sure we will see a massive run up on the release of outstanding flow rates more a sensible climb on each well proving to be commercial.

I agree - the most likely scenario is we're looking at next year before the market takes notice. That'll mean at least another well drilled and successfull before we find the gains we're all after.

Then at that point we'll probably just want to buy some more.
Please sir I want some more?

 

[nioka]

It is becoming difficult nowadays to raise funds , we have seen that with ADI's rights issue and with the credit crunch it will be even harder for companies to get loans . So maybe AWE might take advantage of its holdings to have exposure to the US market . Time will tell .

There will be no problem raising funds if there is a good result. If there is not a good result then they may not need more funds. EKA may be the best buy today in some respects but will probably be the first one to need more cash.

 

[Hatchy]

I still like ADI for their Yemen prospect. I think that in itself could finance all of the texas development for ADI's side of the JV, but alas it's not in production...

 

[Agentm]

i disagree with the markets valuation of adi at the moment, sure its not a producer, but if your going to devalue this share and ignore the string of reports put out by adi on kowalik, and sell this share down, then someone is buying into a potentially very undervalued share imho..

adi, although it has a well on production, is not considered a producer, and nor should it.. the second well, kowalik is producing whilst drilling at the moment, and evidenced still by locals noticing the well is flaring whilst drilling even up until yesterday.. but the actual flow rates will not be released before the well is completed and conditioned for optimum production..

i have no doubt the well is commercial.. i think a lot of others share that view..

there are a lot of investors who were very keen to get on board this share, they are waiting for the flow rates before making the move, so imho the share will re rate once the production figures are announced, and there are now 4 wells in a row for adi in texas, and two in yemen in the coming months ahead.. with indonesia coming in this month, if we get the bid, then we will also be drilling there fairly quickly. and should any of the 4 wells in texas be commercial i am certain they will be immediately be planning an extensive drilling program for the acreages..

no doubt on tiny volumes the sp will continue to fall when infact the adi has never been in a better position with a commercial find on its doorstep.. but one day in the very near future someone will figure out that the 230 acree spacings and 600 bcf is easily on the cards and indeed the wells may produce more, and its very likely that 100 acre spacings or even less is seriously on the cards..

i am holding as regardless of what happens today, tomorrow or next week.

strachan....


Adelphi offers short term speculative interest based on
imminent drilling at the high impact Wisteria prospect
in the Bonaparte Gulf Basin and appraisal drilling at its
US Gulf Coast, Sugarkane project during Q3, 2008.


Longer term, Adelphi is well positioned with two
exploration permits in Yemen, where drilling targeting
50-100 million barrel prospects is expected during
2009, while a new project in Indonesia will require
seismic data acquisition and drill evaluation.


The Sugarloaf project in Texas holds potential to deliver
a long term gas and condensate production asset.

Target valuation of $0.71 per share should support
share price appreciation as exploration drilling and
development gets underway.


Importantly for a pure exploration company, Adelphi’s
high quality technical and financial management team
is backed by an experienced Board with strong
industry credentials


The company estimates that the total play could yield 600 Bcfe of gas, so Strachan Corporate risks an additional target of 200 Bcf plus 40 mmbbls of condensate with an 18% POS and assumes that a further 22 wells would provide sufficient coverage to scope out a 3P resource, given the nature of the play.

Success at this level would be worth over $400 million to the company, whose current market capitalisation is just $42 million (currently $31.5 mill), so there is significant leverage for shareholder wealth. Once the project is proven, debt finance would be available for field development, limiting the requirement for significant new equity.

this from hartleys based on only 1200 boc/d

Valuation
Our well cost assumptions for Sugarloaf are US$10m per well (completed) with ongoing opex of US$5 per mcf produced. We assume initial flow rates of 5 mmcf/d with 1,200 boc/d per well from 20 wells drilled over three
years. This yields gross recovery of 125 bcf of gas and 30 mmbbl of condensate. This equates to 425 billion cubic feet equivalent (gross by value), which is conservative compared to the Company estimate of 600 billion cubic feet equivalent gross. We have used an 80% net revenue interest with a 10% state royalty and a 36.5% corporate tax rate. Using these assumptions, we calculate a net present value for Sugarloaf of $213m or 198cps net to Adelphi. This has been further discounted to account for technical and exploration risk; however, success at Kowalik would result in a significant reduction in risk and a re-rating of the Company.

Our exploration valuation is done on a risked basis given the resource potential, probability of success (“POS”) and approximate NPV per bbl/mcf for the different tax regimes in which Adelphi operates.


these valuations are based on the upper zone of chalks only.. and a whole lot more is known about it now and was not made available to the brokers then..


well done to those buying at the moment and adding.. i have no doubt the sellers are thinking they will get better elsewhere, and good on them for having the balls to sell this share down on tiny volumes and find better elesewhere.. but i cant see a mass exodus of holders, infact the top 20 shareholders hold 64.5 mill shares.. in August 07 it was 56 million shares between them.. that an average of 15% increase.. it indicatees steady support there imho..

 

[mick z]

hi agentm,

i think every one would agree with you on your last post, there is huge potential at sugarloaf for this project to be a company maker for ADI and every knows it.

its just market sediment that's holding the sp down........but it will change in the future, maybe not until next year but things will change, i myself am trying to pick up the cheapies at the moment and i think any one who believes in the sugarloaf project should be doing the same, i think all the jvp's are extremely good buying at the moment.

i agree.......this well will be commercial that's for sure and i hope the announcement tomorrow tells us that they are still drilling and flaring, i would like to see them drill the entire horizontal, now that would also give confidence to the market.


mick

 

[Hatchy]

I'm not sure about Strachan - He didn't get CSG right - said it'd never go, now look where it is.

ADI is going to go ahead, we believers know that. The market can drop the price, but the volume is so very low we shouldn't be concerned.

 

[Hatchy]

hi agentm,

its just market sediment that's holding the sp down........b

mick

I think you might mean sentiment?
Surely there is a bit of sediment around at the moment too - but wait till it settles.

 

[Agentm]

i was feeling a little sedimental today..

these brokers have been following thesugarkane story for some years, and they are very conservative on their estimates here.. i agree that most have no clue on the sugarkane other than whats been fed them, and i doubt if any are aware the suagrkane is conisdered by conocophillips as this in this financial year of 2008

This play is one of ConocoPhillips' largest global exploration projects, with planned 2008 investment in excess of $100 MM.

we already know they would have blown that budget out of the water already..

 

[nioka]

Not a good day on the ASX so far. I couldn't help myself taking the ADI offered at 23c today. Wednesday is the day for an update on the progress of Kowalik so you'd think sellers would at least wait to see the result before selling.

 

[solomon]

Nioka you beat me to them, I saw and hesitated. Oh well good for you. Good luck to all holders in this crazy market.

 

[Hatchy]

It's a joke really....
People just dont' have the balls to hold out - it's good, get rid of those that don't believe we've got it.

 

[seasprite]

It's a joke really....
People just dont' have the balls to hold out - it's good, get rid of those that don't believe we've got it.

There is an article posted on www.oil-price.net about $700b bailout and oil price. JP Morgan appear to be a dominant player in the oil and gas industry , so those selling out may infact regret it if they sell at a loss instead of hanging in there.

 

[nioka]

Nioka you beat me to them, I saw and hesitated. Oh well good for you. Good luck to all holders in this crazy market.

Your turn now. Looks like I paid too much. Down to buying at 20c. I'm going fishing, when I come back I will hope the news has been released. All I have proved this morning is that "he who hesitates is NOT lost."

 

[Hatchy]

I'm going fishing, when I come back I will hope the news has been released.

What a good idea, there's nothing to do on the market without spare cash - I wish I could go fishing!