ADI - Adelphi Energy

Agentm · 29 January 2010

condog

watch out for hilcorp

things are happening in karnes county, the frac in kowalik was not a problem, the down hole issue with the liner became the issue

there are investors in AUT and EKA suggesting there is another rig on the way.

something peculiar is happening out there, at least from an investor point of view. talk of more rigs yet no flow from wells???? so why is that then??

i see a new horizon developing, a far different one to what the invetsors here are..

conoco yesterday

Elsewhere, the company continues to see good results from our Eagle Ford shale gas play activities

imho hilcorp today could be saying

Elsewhere, the company continues to see good results from our Eagle Ford shale gas play activities

Bigukraine · 29 January 2010

Agentm said:
condog

watch out for hilcorp

things are happening in karnes county, the frac in kowalik was not a problem, the down hole issue with the liner became the issue

there are investors in AUT and EKA suggesting there is another rig on the way.

something peculiar is happening out there, at least from an investor point of view. talk of more rigs yet no flow from wells???? so why is that then??

i see a new horizon developing, a far different one to what the invetsors here are..

Hey agentm,

The new horizon you are suggesting could you elaborate a little if possible eg, possible take over or other? just a little hint on your thoughts please would be nice

Ramblin Round · 29 January 2010

My understanding is that not all Eagle Ford fracs are successful the first time. Some produce and some don't. And then some multi-stage fracs produce like no well they've ever seen before. If Eagle Ford is such a hit and miss game then it seems that there is no choice but to keep poking holes in the Earth. It all sounds good to me.

Drill baby drill !

Agentm · 29 January 2010

Bigukraine said:
Agentm said:

Hey agentm,

The new horizon you are suggesting could you elaborate a little if possible eg, possible take over or other? just a little hint on your thoughts please would be nice

Click to expand...

pretty easy stuff really

on hc there are suggestions from a long term aut holder that there is progression at morgan, and indicating there is a chance of a spud in the near term..

if hilcorp are drilling with 2 rigs, then imho watch out for hilcorp.. they are deadly serious about the play and are drilling away

sure the aussie investors disbelieve the sugarkane potential. thats very evident by the lack of interest in the share.. but that by no means suggests that the sugarkane is being treated any less seriously by the main parties investing in it, hilcorp and tcei appear to be going ahead, drilling easley as we speak.. would that happen if there was nothing there to drill after???

lol

if you follow how intense the landmen are in the region it would be evident to anyone that theres a lot at stake here..

i will tell you three that are interested

conocophillips
TCEI/Hilcorp
ME...

happy to wait.. what ever else happens is not a concern to me, its purely a case of time before the results will speak for themselves.

condog · 29 January 2010

Ramblin Round said:
My understanding is that not all Eagle Ford fracs are successful the first time. Some produce and some don't. And then some multi-stage fracs produce like no well they've ever seen before. If Eagle Ford is such a hit and miss game then it seems that there is no choice but to keep poking holes in the Earth. It all sounds good to me.

Drill baby drill !

I tend to agree

Theres a good post on the HC forum which i quoted in the AUT thread....

Its only an opinion, but well worth a read....

condog · 29 January 2010

Agent I wholeheartedly agree - once again thanks for your tireless efforts in providing fantastic info on the Sugarkane prospects....

Im in backing them till theres a LOT more news one way or the other....Im ignoring this negative noise about the place for the moment... and focusing on the true potential and whats actually happeing over there rather then the negativle little ...#!@#$%#@ are saying in Aus...

Bigukraine · 29 January 2010

Agentm said:
Bigukraine said:

pretty easy stuff really

on hc there are suggestions from a long term aut holder that there is progression at morgan, and indicating there is a chance of a spud in the near term..

if hilcorp are drilling with 2 rigs, then imho watch out for hilcorp.. they are deadly serious about the play and are drilling away

sure the aussie investors disbelieve the sugarkane potential. thats very evident by the lack of interest in the share.. but that by no means suggests that the sugarkane is being treated any less seriously by the main parties investing in it, hilcorp and tcei appear to be going ahead, drilling easley as we speak.. would that happen if there was nothing there to drill after???

lol

if you follow how intense the landmen are in the region it would be evident to anyone that theres a lot at stake here..

i will tell you three that are interested

conocophillips
TCEI/Hilcorp
ME...

happy to wait.. what ever else happens is not a concern to me, its purely a case of time before the results will speak for themselves.

Click to expand...

Agentm thankyou for your insight and as allways informative and will be waiting for the results on easley 1h over the coming weeks .

Ramblin Round · 29 January 2010

Theres a good post on the HC forum which i quoted in the AUT thread....

Please share some links to other discussion forums. I am hungry for all the info I can get regarding Sugarloaf and Eagle Ford.

mir · 29 January 2010

agentm have you any info from your end to support / not support my post on morgan starting in the next few weeks?also I've been told hilcorp are in a different league to tcei, a lot more fire power.

Agentm · 30 January 2010

on the ground theres plenty to support it. so i cant find anything there that discounts it as a possibility

condog · 30 January 2010

From AUT quarterly report

Following the recent farmin to Aurora’s Sugarkane assets by Hilcorp Energy (“Hilcorp”), this reporting period has seen an acceleration of operations under the associated work program.
Regional Eagle Ford shale activity has continued to increase with new entrants, further positive
results and a level of interest that puts the play amongst the most sought after of the US shales.

But then they dont stipulate what....to my knowledge we have not seen any accellerations to date...so perhaps they are referring to an accelleration of Morgan

Also very encouraging, but i think the non-doubters already knew this:

The Eagle Ford Shale trend is now one of the pre-eminent unconventional gas resources onshore in the
USA. Major US and international companies have made announcements of significant acreage acquisitions and drilling activity surrounding Aurora’s acreage. Initial results continue to support the premise that the
Eagle Ford shale is one of the most economic within the USA. Within the trend and based on publically available initial production rates, three of the best results,on a gas equivalent basis, are from wells drilled
within or on the boundary of the Sugarkane field.

Production from the Sugarkane Field has been fairly consistent across all of the recently producing wells. Gas being produced is very rich with 1,250 British Thermal Units per cubic feet of gas (“BTU/scf”) and a very high condensate ratio of 100 – 300 barrels per million cubic feet of gas (“bbls/mmscf”).

Petrohawk has provided the most public information to date. Based on their presentation dated 12th Jan 2010, they have drilled 27 wells and have 16 operated wells on production with an average initial rate of 7.8
mmcf/d and 143 bpd condensate (8.7 mmcfe/d or 10.0 mmcfe/d using a 6:1 calorific conversion or 15:1 ratio based on current relative fiscal conversion for condensate). They have continued to acquire land on trend towards the Sugarkane field in a venture with Swift Energy.

Recent announcements have been made relating to nearby Eagle Ford Shale wells which are located just outside the Sugarkane Field. Pioneer released the results of the Sinor #5 well in Live Oak County which is some 18 miles southwest of the Sugarloaf #1 well. Initial rates of 8.3 mmscf/d of gas and 500 bpd of condensate from a 2,600 ft horizontal section have been reported. Pioneer have also reported the results of the Robert Crawley Gas Unit #1 well, which is a few miles to the southeast of Sinor #5 at 17 mmscf/d IP (dry gas). ConocoPhillips provided the results of their Bordovsky #1H well as having initial production of 4 mmscf/d of gas and 1500 bpd of condensate. This well is 18 miles to the northeast of the Sugarloaf #1 well and has exhibited a high condensate ratio which is comparable to that observed in Sugarloaf AMI production to date.

hmmm??

Whats your thoughts on that, given they reckon they have a year worth of data projections...see quote below from start of same report

Production was suspended during the quarter from Kennedy #1H and Kowalik #1H in preparation for the fracture stimulation program, but there is now approximately one year of production data from each well.

Are they saying they have 1 year of data from Kennedy and Kowalik and its "comparable" to

ConocoPhillips provided the results of their Bordovsky #1H well as having initial production of 4 mmscf/d of gas and 1500 bpd of condensate

Or am i just reading stuff into this... id like to know your thoughts..

Cause if they are then, this is a massive massive positive for the AMI....

These three IMO are now so rediculously undervalued its not funny....they are holding acerage with JV agreements inplace, have advanced teams on site in the most sought after onshore filed in the enitre USA..... Guys marke my words...but DYOR and seek advice.....IMO this thing is set to blow....

rock86 · 30 January 2010

condog said:
From AUT quarterly report

But then they dont stipulate what....to my knowledge we have not seen any accellerations to date...so perhaps they are referring to an accelleration of Morgan

Also very encouraging, but i think the non-doubters already knew this:

hmmm??

Whats your thoughts on that, given they reckon they have a year worth of data projections...see quote below from start of same report

Are they saying they have 1 year of data from Kennedy and Kowalik and its "comparable" to

Or am i just reading stuff into this... id like to know your thoughts..

Cause if they are then, this is a massive massive positive for the AMI....

These three IMO are now so rediculously undervalued its not funny....they are holding acerage with JV agreements inplace, have advanced teams on site in the most sought after onshore filed in the enitre USA..... Guys marke my words...but DYOR and seek advice.....IMO this thing is set to blow....

I totally agree with you, however it's been set to blow for the last 2 months now. All we need now is some luck to fully complete a frac. C'mon Weston

Agentm · 30 January 2010

condog, from zip a few months back to potentially 2 rigs working full speed any time now, acceleration it is..

2 wells fracced, one about to imho

next tcei permit for the sugarkane

http://webapps.rrc.state.tx.us/DP/d...RANCHO+GRANDE+TRUST+168-1&univDocNo=485938586

the well is called RANCHO GRANDE TRUST 168-1

its 5753 feet in the lateral

i am not seeing any slowdown here,,

its absolute that the investors see nil value for the sugarkane to the jvp,, but imho they are totally underrated and have totally misunderstood what the liquids are in the play and what value that will bring..

plenty are selling their shares at very much a discounted price imho, and happy too.. but imho the upside is totally misunderstood..

patiently waiting for a change in direction for the jvp..

Agentm · 30 January 2010

perhaps read this from murphy they talk about their gaszone well in mcmullen, and then how they view the karnes county oil zone and their new well and also the play itself

many questions on the eagleford in the Q&A section

http://seekingalpha.com/article/185259-murphy-oil-corp-q4-2009-earnings-call-transcript

no one thinks this play is valid i know with the jvp, but imho its a seriously wrong view..

condog · 30 January 2010

Agent thats great find once again......its all stacking up perfectly - Easley and Kennedy finished?? and about to finish soon....

Two rigs on site and

Two wells set to go Morgan and Rancho.....

Agent whats your thought on the quote above about a years data in comparrison to Conoco 4mmcfs gas and 1500bopd condensate....is that your understanding.... are they saying Kennedy so far is comparrable????

Agentm · 31 January 2010

This well is 18 miles to the northeast of the Sugarloaf #1 well and has exhibited a high condensate ratio which is comparable to that observed in Sugarloaf AMI production to date.

i assume this is what your discussing?

the eagleford and the chalks are both active in the adi acreages, and whats staggering them is the 250 - 390 bopd per 1mmcfpd flow

kennedy has already indicated in the mini frac what ratio of condensate it will deliver..

where petrohawk are in mcmullen and lasalle the oil ratio is very low, so its primarily gas with low condensate, 50- 100 bopd per 1mmcfpd some times a little more... so any wells there are close to wire on economics, you need high yielding condensate in the play to make a good return, with the giant petrohawk on a very handy hedging deal still in 2010 with the gas, the economics make the play over there somewhat attractive, but you have to consider that there are small cap explorers on the asx right in that zone, particularily in mcmullen and lasalle.. and when your investing there you need to be certain that when your comparing the returns that petrohawk get and the returns that others get, the hedging aspect is a significant factor in the economics of exploration if your in high gas yielding eagleford territory..

Petrohawk Energy will spend $1.45 billion in capital expenditures in 2010. The company will devote $900 million to development activities in the Haynesville Shale and $350 million in the Eagle Ford Shale.

Although the company finds the Eagle Ford Shale as attractive as the Hayesville Shale in terms of economics, the company needs to drill less to hold its acreage in the Eagle Ford Shale because the lease sizes are larger.

Hedging
Investors concerned about the macro situation in natural gas in 2010 should take some comfort in Petrohawk Energy's hedge position. The company has 61% of its anticipated 2010 natural gas production hedged through a series of collars and swaps at a floor price of $5.93 and a ceiling of $9.21.

also from petrohawk website

During the second quarter, Petrohawk gained $2.34 per Mcf from hedging, bringing realized natural gas prices to $5.62 per Mcf. The Company also gained $2.92 per barrel from its hedging program during the quarter, bringing realized oil prices to $56.64 per barrel. Before the effect of hedges, Petrohawk realized 94% of NYMEX for its natural gas production and 90% of NYMEX for oil

condog, do you follow my point here? in this play your economic modelling needs to be spot on, the well costs are a very important aspect.. the gas ratio needs to be in a very comfortable zone and the condensate needs to be way high.. and that region where adi are is being recognised by many as the best territory there is..

now adi have a play that is chalks and eagleford combined.. conoco has demonstrated in one well, bordovsky, with a small production run and an ip of 1500 bopd off 4mmcfpd flow that there is a lot of potential in the rock and also you have to consider the type of completion they undertook is vastly different to the completion methods the adi jvp are undertaking..

this in the adi annual report

Petrohawk holds over 150,000 acres in the Eagle
Ford play which is located ~60km to the southwest of
and on trend to the Sugarloaf area. The Eagle Ford
shale in their area is 250 feet thick, overpressured,
highly calcareous, organic, relatively porous (~10%),
and sits stratigraphically beneath the Austin Chalk. It
is effectively a mature source rock. From direct rock
property measurements, Petrohawk has measured its
gas in place at 180 – 210 BCF per 640 acres (i.e. per
square mile).

The above rock property characteristics are very similar
to the Eagle Ford shale in the Sugarloaf AMI with two
important exceptions.

1. Gas richness at up to 300 barrels of condensate per
mmscf of gas is much higher at Sugarloaf; and

2. the play at Sugarloaf which forms part of the
Sugarkane (Cretaceous) Field comprises both the
Eagle Ford shale and the Austin Chalk.

sam76 · 31 January 2010

So what you're really saying is theirs is fantastic but ours is sooooooooooo much better!

lol

Agentm · 31 January 2010

no

its about the economics..

what you pay for leases, what the ratio of gas is, and whether you have capital to go further.

being undercapitalised and having 28 mill debt is one thing, having cash in the bank and the ability to fund forward well program is another..

imho hilcorp is demonstrating they have the initiative and the funds to hit the region hard.. i think a 10 well program they announced is just the tip of the iceberg, you have to appreciate the leases and the forward plan and i think there is no way 10 wells in 2010 is going to come close to meeting the demands of the acreages.. my data tells me different to whats being announced..

imho the barest minimum is what i needed to be demonstrated immediately for me to stay in the share,, and i am waiting for the demonstration of that,, all my research tells me its a possibility.. i am hanging in this one as i think the upside is not there in the share and the partnership with hilcorp was missed entirely by the market.. they have no clue whats on their minds..

i might add if the kennedy is what i think it will be..

oh, and did i mention conoco said they are pleased with all progress in the eagleford?

adi is a dead set standout bargain.. those selling imho have little understanding nor patience,, great for those accumulating

all imho and dyor

jancha · 31 January 2010

adi is a dead set standout bargain.. those selling imho have little understanding nor patience,, great for those accumulating
all imho and dyor

With the market jitters atm i feel that ADI could be picked up at much lower sp. Definately long term. That also could be part of the reason why they haven't been heading north.

mir · 31 January 2010

agentm what are your thoughts regarding kennedy? it should be flowing back frac fluids by now ,I'm hoping for about 400 to 500 bpd & 2 to 3 mmscf/d ip now with only 8 of the fracs complete .do you think that I'm being to optimistic?

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