ADI - Adelphi Energy

[Agentm]

solomon, yes the gas background readings are real high, and the well is flaring which indicates the operator is right in the zone, i have heard they have solved the problems of drilling in the zone (no repeat of kennedy is likely) and having connectivity this early is great news. the possibility of a good lateral is being indicated very early on here imho

Resource

OT also

i am in aep also resource, and its been climbing back to where it was before the crash steadily now, at $2 level now.. i liked their announcement yesterday indicating their sp valuation as follows:

"The Net Assets per Share of Allco Equity Partners Limited (ASX: AEP) at 31 December 2008 were $5.69 per share based on asset carrying values at that date (excluding any current financial year contribution from equity accounted
investments). Marking to market the value of listed securities at 31 December 2008, including IBA Health Group Limited, would result in Net Assets per Share of $4.65 per share. "

 

[gdaf]

Interesting how this stock if valued. The cash position has left all but the true believers in the share. Speculative dollars have long since gone (or been wiped out) . Interesting how these things work with the company potentially so close to finally achieving a financial reward with the outcome from current operations - no pump and dumpers, nobody but the patient left. They will either be left holding nothing, or be the true gainers from all this. Will a discovery be reflected in the shares? Probably not for a while. With a long term view (at least until the Western world starts spending again) and reliable flow this could be a nice little reward for the patient. My tip is a discovery at Weston (already showing that they've hit natural fractures and connected to the play), and a cleanout at Kowalik to sure up the potential from the zone that flared (there's condensate down there intially flowing at 300+ bopd with a less than ideal completion).

The small raising and what they may get for sell down of other assets may seem quite small if that is the case.

 

[seasprite]

refer http://www.asx.com.au/asxpdf/20090123/pdf/31fpp6kg5dwhrm.pdf for latest ann ADI's Share Purchase Plan .

 

[Lucky_Country]

refer http://www.asx.com.au/asxpdf/20090123/pdf/31fpp6kg5dwhrm.pdf for latest ann ADI's Share Purchase Plan .

Well I must say 6c a share is bargin basement prices for all that participate in the spp upto $5000.

Now we would all hope that this funding will give us the result from Sugarloaf we have been waiting for and they are obviuosly putting alot of faith into the area which has been the focus of their attention for some time now.

The certainty surrounding funding may now actually be a blessing for the shareprice and give confidence to the market.

They will get my cash and I will be in until they get a definative result one way or the other.


CRACK THE CHALKS !!!!!!!!

 

[seasprite]

share placement rubs dirt in the faces of those who took up the rights issue at 32c . I imagine a large dumping on monday , could be wrong.

 

[Lucky_Country]

share placement rubs dirt in the faces of those who took up the rights issue at 32c . I imagine a large dumping on monday , could be wrong.

Market closed on Monday !!!

I think the announcement is actually a good thing for the sp as it gives clarity to the market and stability to the company.

Bargin price imo

 

[Agentm]

this is not a picture of kuwait post the iraqi withdrawl,

this IS kowalik!!

 

[sam76]

looks to me that there is some serious unblocking going on over there!

thanks for the pic Agent M!

 

[martyfar]

Yeah thanks for the pic Agent ..... this is my first post but I have held shares in the sugarloaf joint venture since mid 2007, and have been browsing with interest the posts on this forum for the last 6 months ..... may I enquire as to the possible rationale for the smoke coming from Kowalic ?

cheers

 

[Hatchy]

Hi Agentm,
Are you sure that's not Kuwait?

So,
They've either blown up the drilling rig or have started to get significant flares.

Can't complain either way!

What's your thoughts on the SPP?

 

[Agentm]

not heard what the operation was..

i cant speculate on it myself, its certainly bellowing heavy black smoke..

this type of activity has been seen a few times, this particular event was noteworthy enough to invoke a picture being taken..

if its flaring then i expect some report on kowalik in the near term. nothing has come from the jvp over the last weeks while this has been seen..

re the ssp..

i just see it as a means to an end, there is cash needed in the short term so the raising may get some interest, price point is amazing really, if you get a free look at the outcome of weston then imho its going to be attractive to some.

lets see what the announcements bring in the near term. i expect lots of interesting news myself

 

[JOHAUD]

Has anyone noticed this article in Oil Barrel mag.

http://www.oilbarrel.com/home.html

It seems to be posting a positive picture of the future prospects for the area.

 

[Agentm]

estseon - 27 Jan'09 - 20:21 - 49757 of 49757

The Sugarkane Field was discovered with the Kunde-1 well which started producing in September 2006 and is a unique Austin Chalk formation that lies some 20 km south of the main Texas Austin Chalk trend. In the early stages of appraisal the field is exhibiting many characteristics that are superior to the classic Austin Chalk fields such as the nearby Giddings and Pearsall fields that have produced over 5 tcf of gas and 600 million barrels of oil. Notably, the Sugarkane field is over pressured, has a higher porosity and a higher condensate to gas ratio to the classic Austin Chalk fields.

The Sugarkane Field covers an identified area exceeding 200,000, acres with potential gross reserves estimated at greater than 3 tcf of gas and 700 million barrels of condensate making it potentially one of the largest undeveloped gas and condensate fields within North America.

That said, it would be wrong to walk away with the idea that a company or consortium is going to hit a gusher or huge elephant field which will immediately be company- making. These are “tight” fields which often need special techniques like fracture stimulation or underbalanced drilling to get the gas or condensate up. The work isn’t easy. Operators must drill long horizontal sections through the fractured chalk fields to deliver best production rates, and as evidenced by the recent Kowalik-1H there needs to be not just stimulation but also laborious clean up operations to get the best results.

The point about this kind of operation is that a successful well can yield upwards of 1 million cubic feet of gas. This is more than enough to keep the lights on, as the saying goes in the industry. The name of the game is the number of wells -- drill enough successful wells and you build up a very successful cash flow business. The operation is suitable for small groups as well as mid caps because it is low risk. Some joint venturers have talked of drilling between 60 and 100 wells to spread this risk.

Aussie group Aurora, which holds interests in three separate project (AMI) areas within the Sugarkane Field, including the Sugarloaf Area, with a combined gross land position of 52,189 acres ( 20,561 acres net to Aurora before royalty interests), is the most recent company to give an operations update. Before we move on to that though, it is perhaps important to point out that not only are the fields fractured; so are the holdings in them.

Take Empyrean’s involvement in the Sugarloaf prospect. This is complex and you need to be bright eyed and bushy tailed, with not too much drink taken, easily to follow it. The prospect is divided into Block A and Block B. Empyrean has a 6 per cent interest in Block B, and an extra 12 per cent interest in a series of 16 wells that end up on Block B. A yet- to- be-determined number of these 16 wells will be drilled on Block A and Empyrean has a 7.5 interest in Block A, but it is not clear that this 7.5 interest will be continued after the 16 well series is drilled, even though Empyrean has talked of at least 44 wells on the prospect. Still with me? Good. It gets more convoluted.

Empyrean works with Texas Crude Energy (TCEI) as operator. Last November the operator gave us news of the Kennedy # 1 well on Block B and the Kowalik #2 well on Block A. Here it gets a bit confusing because there was at the time a Kowalik #1H well extant on Block A. So not only are the holdings fractured you have to think in terms of different wells for different zones maybe, and zones running across the blocks.

Cutting through the zones and revenue holdings, the situation looks like this: Empyrean and its partners had two successful wells on Sugarloaf A-1 and A-3 . A-3 last April saw the company’s shares surge 90 per cent because the TCEI JV Block A-3 well flowed at 1.9 million cubic feet of gas a day and over 460 barrels of condensate a day. At 6000 cubic feet to a barrel of oil this means over 4 million cubic feet a day, about 4.3 million cubic feet a day in fact.

The Kennedy #1H well on B flowed at 200,000 cubic feet a day and 60 barrels of condensate giving 560,000 cubic feet in all. In November 2008 TCEI advised the Kowalik 1H well produced over a 24 hour period 937,000 cubic feet of gas, 321 barrels of oil and 14 barrels of water , namely some 1.8 million cubic feet of gas equivalent a day. This would mean a total of 6.6 million cubic feet a day of gas equivalent; a substantial volume which could easily be tied into the local infrastructure and presumably be quickly monestised. Of course not all of this would be net to Empyrean.

When those of us interested in trying to work out what it all meant broker Blue Oar came galloping to the rescue, with some back-of -the envelope calculations. Blue Oar reckoned that on the data available last November the recoverable amount of hydrocarbons net to Empyrean from Sugarloaf was 32 billion cfe.

Assume a ten year life of the field ( this may not be correct) and divide by the number of days in a year and you get output in the region of 8 million cfe/d, assuming Empyrean continued to have drilling success, and worked the field for all it was worth.. These are crude figures but add in some more guesstimates and assume a price of US$ 10 per 1000 cubic feet for the gas at that time, the cash flow began to look very appealing for a small company; something like US$ 80,000 a day or over US$2.4 million a month give or take.

So we come to Aurora. With its three separate project (AMI) areas within the Sugarloaf Field, there is a 50 per cent stake in the Longhorn Area, a 80 per cent interest in the Ipanema Area and the 20 per cent holding in Sugarloaf. There have been nine exploration and appraisal wells drilled into the targeted Austin Chalk formation since discovery. Three of these wells are within Aurora’s area of interest and six wells have been drilled in an area adjacent to Aurora’s. There are more wells underway. We know what the three wells in Aurora’s areas have done, for it is they, the Kennedy #1H, the Sugarloaf #1 well and the Kowalik #1H well.

We now have a report on a new well the Weston #1H well. Its partners here include Eureka Energy with 12.5 per cent and Adelphi Energy with 20 per cent. Aurora says it has been advised by the operator TCEI that as of January 20 the well had reached a depth of 14,978 ft. Gas readings increased since entering the chalk with a maximum daily average reading of 3100 gas units. Minor flares have been observed. To put t in perspective this gas unit reading was in excess at that shown in the Kennedy #1 well. So Aurora looks as if it is on the way to another successful well. All in all it seems as if it is in for a 20 per cent stake in 3 to 4 million cubic feet of gas equivalent a day. It is some way behind Empyrean, but, it too, plans dozens of wells. It too should be able to build a substantial cash cow business even if gas prices are not quite what they were.

 

[blues]

Slow progress this week according to weekly update and disappointing no update on what is happening at Kowalik after Agentm's picture. They will need to get moving as I would assume shareholder's will want to know the result at Weston before handing over more cash in a SPP. I defintely do.

Cheers.

 

[maverick11]

Thanks for the photo Agentm.

I wonder what the EPA think about that

Looks like they are burning out the wax encrusting the inside of the well. Hope they get plans in action soon and can clear the fractures. I want to see at least 4-5 mcfepd

 

[estseon]

CoP recently fracture stimulated 1,800 ft of Kunde 3 and reported flows of about 23 boepd / 100 ft.

EKA raised new capital and made specific reference to completions of both Kowalik and Weston.

Although TCEI has not reported any large flares whilst drilling Weston (intersecting natural fracturing) it has reported high levels of saturation in the rock. It was similar in the case of Kowalik.

It could be that the JVPs are expecting to fracture stimulate part of both wells.

If CoP's Kunde 3 success is replicated, that would suggest flows of about 700 boepd + whatever the bottom 1500 ft in the fractures flows for Kowalik.

Similarly, for Weston, except we do not yet know how much of it will intersect natural fracture swarms.

The point is that the initial flows from the unstimulated wells might not be the end of the story by any means.

 

[jestex12]

I am new to the sight but was interested in the information being posted. My family has 164 acreas on the border of Dewitt County and Karnes county. My family has been contacted regarding leasing the land and have been offered $250 per acre. Does anyone know the going rate per acre and does any have any information regarding this area as a potential hot-bed for new exploration.

P.S.-specifically the land is 5 miles southwest of Nordheim, TX in the J. Taylor A-462 & Alderete A-52 survey's.

 

[Agentm]

jestex

if you PM me (private mail) i can help you out a little, i am familiar with your region and the type of drilling that is taking place there.

 

[estseon]

Sorry, jestex, don't know land lease rate but royalty rate seems to be about 29% and they are talking 10 years + for a well. Not much data on flows because they are still drilling experimental wells but rates per day of 25 boe/100ft for artificial fractures and 35 boe/100ft for natural fractures are indicated at the present. Say 50:50 for a well with a single 6,000ft lateral (Meridian in East Texas are drilling dual laterals), that's 1,800 boe per day. Even at $60 (from next year, say) that would earn you $30k per day. That would make the lease rent somewhat less relevant.

 

[Agentm]

Sorry, jestex, don't know land lease rate but royalty rate seems to be about 29% and they are talking 10 years + for a well. Not much data on flows because they are still drilling experimental wells but rates per day of 25 boe/100ft for artificial fractures and 35 boe/100ft for natural fractures are indicated at the present. Say 50:50 for a well with a single 6,000ft lateral (Meridian in East Texas are drilling dual laterals), that's 1,800 boe per day. Even at $60 (from next year, say) that would earn you $30k per day. That would make the lease rent somewhat less relevant.

estseon

i have yet to see any chalks wells that far south in dewitt, imho the only activity has been on two other types of rock in that region, i would need to take a closer look.. i see various players taking a keen interest in the land south of the fault, even in live oak and in bee, but as yet i am not sure if the chalks/eagleford play goes too far south of the faulting there.

jestex, what side of the fault are you on?