ADI - Adelphi Energy
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Folks
ADI released good news. Share price jumped but not so much aligning with the good news .
I reviewed Hartley's report again.
ADI SP has now exceeded the target price and valuation Hartley predicted (which appeared to be ambitiouns on 1 Feb and ADI has exceeded that).
Reading the thread postings it appear that we are hoping the SP could be much hihger.
Under the circumstances what the experts say ? I understand one can not predict price which is not allowed in ASF code of conduct. But could some inference charting be provided?
Attaced the Hartley Report for those who always asked for it.
Happy Investing
ADI released good news. Share price jumped but not so much aligning with the good news .
I reviewed Hartley's report again.
ADI SP has now exceeded the target price and valuation Hartley predicted (which appeared to be ambitiouns on 1 Feb and ADI has exceeded that).
Reading the thread postings it appear that we are hoping the SP could be much hihger.
Under the circumstances what the experts say ? I understand one can not predict price which is not allowed in ASF code of conduct. But could some inference charting be provided?
Attaced the Hartley Report for those who always asked for it.
Happy Investing
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hey miner
there is zero negative in the announcement
the weston well is flowing to sales. and to see a chalks well flowing is very positive..
i am sure the flow rates will come through as announced by the jvp.
easley drilling away nicely in the lateral
there is zero negative in the announcement
the weston well is flowing to sales. and to see a chalks well flowing is very positive..
i am sure the flow rates will come through as announced by the jvp.
easley drilling away nicely in the lateral
They didn't say very much but they did say "which was in line with expectations". It could mean anything from 'comparable to the other wells drilled' to 'it fits well with our model of the geology of this field'. Or it could mean that this is all that the operator will let us say about it at the present.
estseon, I'm not picking on you, just using your quote cause it was handy.
IMO and the price action today supported my thinking, was that todays announcement was the get set,
They cant hold back the Ip's, the info will be passed on.
If I'm wrong then , well I'm wrong.
DYOR
No probs.
The production gas and condensate is flowing to sales - they said that in the news release.
Some time back, EME failed to disclose production on Block A. Details have to be returned to RRC and access to the details is unrestricted. I had to write to the Company's brokers and point out that they were creating a disorderly market. Anyone knowing how to access the information on the public website would have an information advantage.
The same will apply to Kennedy, Weston, Easley and any other well drilled. From the moment that it starts producing, it is just a matter of time until the information becomes accessible. That is, assuming that the operator does not default on its obligations.
Management who leave their shareholders to search out important performance information from public records win no acclaim from such. The information will have to be released, it is just a question of when.
The production gas and condensate is flowing to sales - they said that in the news release.
Some time back, EME failed to disclose production on Block A. Details have to be returned to RRC and access to the details is unrestricted. I had to write to the Company's brokers and point out that they were creating a disorderly market. Anyone knowing how to access the information on the public website would have an information advantage.
The same will apply to Kennedy, Weston, Easley and any other well drilled. From the moment that it starts producing, it is just a matter of time until the information becomes accessible. That is, assuming that the operator does not default on its obligations.
Management who leave their shareholders to search out important performance information from public records win no acclaim from such. The information will have to be released, it is just a question of when.
Esteon
Thats my understaning, they are required by both TRCC and ASIc to release information in timely and full disclosure, which allows them to not publish till stabilised, but once stabilised, rules require in both continents full disclosure and reporting.
Its a dangerous game with both TRCC and the toothless tiger ASIC to hold back...
Time will tell, but investors tapping on their door for full disclosure will prompt pretty quick and full disclosure....
Thats my understaning, they are required by both TRCC and ASIc to release information in timely and full disclosure, which allows them to not publish till stabilised, but once stabilised, rules require in both continents full disclosure and reporting.
Its a dangerous game with both TRCC and the toothless tiger ASIC to hold back...
Time will tell, but investors tapping on their door for full disclosure will prompt pretty quick and full disclosure....
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This flow of information (or limited lack therof) is to be expected and somewhat predictible at this point in the game. Now that things are heating up for the Eagleford play, folks are clamming up as if it will help negotiate acreages and joint ventures/rig leasing/etc. So many companies are trying to get in right now it's not even funny.
Actually it is pretty funny........ that all this time some guys in Australia started talking about it on a forum back in 2006 and nobody believed them. :thankyou:
Actually it is pretty funny........ that all this time some guys in Australia started talking about it on a forum back in 2006 and nobody believed them. :thankyou:
I don't get it.
Rhetorical question.
Try to keep it a secret from whom?
The oil companies and the service companies will know what's happening.
The stock analysts in the US O&G sector know what's happening.
The landowners must know what's happening.
TRRC knows what's happening.
Judging by the reporting on some of the flaring, the man on the moon knows what is happening.
Is there actually anybody in Texas (having any potential financial interest) who does not know what is happening?
If they delay reporting flow rates they are bound to create a disorderly market
Rhetorical question.
Try to keep it a secret from whom?
The oil companies and the service companies will know what's happening.
The stock analysts in the US O&G sector know what's happening.
The landowners must know what's happening.
TRRC knows what's happening.
Judging by the reporting on some of the flaring, the man on the moon knows what is happening.
Is there actually anybody in Texas (having any potential financial interest) who does not know what is happening?
If they delay reporting flow rates they are bound to create a disorderly market
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Yes you and I know that, but that's the way it goes around here. Sometimes I really do think it comes down to just trying to dumb down the landowners for cheap leases. Everyone "in the know" knows how well these shale plays are and has been going on successfully for years. All the companies know too so why BS each other.
The other thing to get excited about is not only have we got more wells commencing but they are bigger. Keenedy only got 8 of its 14 stages flowing, Easily is 4000ft with 14 stages, but Ranch Grande is from memory 5700ft+ in the horizontal with around 20 stages... so thats presumably up around 40% bigger , with all other factors beeing equal..., but hopefully around double the output of kennedy.
Now i might be getting a bit too excited here and ahead of myself, but in the bakken they have most horizntals doing 26 stages now and some attempting 32 stage fracs.... hopefully in the near future ours will be pushing 7000ft using similar engeneering and with each well we will be seeing double to tripple the Kennedy flows, for a not too dis-similar expense and time line. Im not sure on the limitations from one shale to the other, but it was less then 12 months ago they where excited about 5- stage fracs in the bakken.
Its a bit simplistic and makes it all sound a bit easy, but im very excited by the near term prospects. And with hilcorp on board one can only imagine our fracs will get a lot bigger a lot faster then most.
With a climbing well count , growing flow rates and compounded by increaseing productivity from each new well.....you can work the rest out.
Now i might be getting a bit too excited here and ahead of myself, but in the bakken they have most horizntals doing 26 stages now and some attempting 32 stage fracs.... hopefully in the near future ours will be pushing 7000ft using similar engeneering and with each well we will be seeing double to tripple the Kennedy flows, for a not too dis-similar expense and time line. Im not sure on the limitations from one shale to the other, but it was less then 12 months ago they where excited about 5- stage fracs in the bakken.
Its a bit simplistic and makes it all sound a bit easy, but im very excited by the near term prospects. And with hilcorp on board one can only imagine our fracs will get a lot bigger a lot faster then most.
With a climbing well count , growing flow rates and compounded by increaseing productivity from each new well.....you can work the rest out.
The different lengths for the new wells might be so that Hilcorp can compare (at their own cost) the relative costs and benefits of the longer completions.
Looking back at the reporting of Kennedy, They started it flowing at 01.00 on Thursday (US CT) and had an initial production rate at 07.00 on the Saturday.
Weston was reported at ASX open last night. So maybe they started flowing it Thursday morning, as before (17.00 US CT = 10.00 Aus time the following day). This means that an announcement on Monday is possible.
They might have reported Friday open because they had said 14 days from 4th February.
All conjecture - we'll find out Monday. Have a good weekend.
Looking back at the reporting of Kennedy, They started it flowing at 01.00 on Thursday (US CT) and had an initial production rate at 07.00 on the Saturday.
Weston was reported at ASX open last night. So maybe they started flowing it Thursday morning, as before (17.00 US CT = 10.00 Aus time the following day). This means that an announcement on Monday is possible.
They might have reported Friday open because they had said 14 days from 4th February.
All conjecture - we'll find out Monday. Have a good weekend.
I know its only speculation till monday, but both the empyrian and asx JVP's announcments stated Weston was in line with expectations.
The only clear expectations Im aware of come from the ADI investor presentation from late 2009. Which indicated The hayensville shale had averages of 18mmcfgpd equivelents....Thats $3-5M p.a. for AUT and $1.5M - $2.5M p.a. for EKa and ADI...
It appears some of the calcs in that presentation where made on that average...so if thats the expectation they where in line with then...we can expect a great result hopefully on monday.
The other was what eosteon presnented a few posts ago "Speculation- because ADI previously stated (28 Jan) that we could expect to extrapolate flows from Kennedy results, they might be bound to issue a caution if they would expect materially less from Weston. That could mean 1,400bpd + 6mmcfgpd. " Still around the same figures, slightly higher.... at $4-6M for AUt and 2-4M for ADI, AEK
All in all seems to indicate all JVP's rediculously undervalued based on anticipated and possible near term results. Not a lot of value has been placed on any future earnings. Withsome other asx Eagleford explorers running at 17+ PE....we may see a major re-rating upon bankability very soon.
From a speculative funnymentalist view all three JVP's would in my amatuer opinion, be less then 50% of thier calculated value if Weston is in the range discussed. If Easily then comes online on the back of it with better figures again....then it could possibly add that much again at a minimum....
So sp based on postive very good weston - i speculate IMO (DYOR) ADI 46c +, AUT 80c +, EKA 25c+
Based on very good Easely and Weston i speculate IMO (DYOR) ADI 69c +, AUT 1.20c +, EKA 39c+
The above rough calcs are amatuer opinion only. DYOR and seek expert advice. This is extremely high risk. Currency and volatile commodity prices may massively alter results.
Depending on the reason AZZ is halted at present may have our 3 JVP's as the shining starts of the Eagleford on the ASX.
Disc - i own AUT, DYOR
The only clear expectations Im aware of come from the ADI investor presentation from late 2009. Which indicated The hayensville shale had averages of 18mmcfgpd equivelents....Thats $3-5M p.a. for AUT and $1.5M - $2.5M p.a. for EKa and ADI...
It appears some of the calcs in that presentation where made on that average...so if thats the expectation they where in line with then...we can expect a great result hopefully on monday.
The other was what eosteon presnented a few posts ago "Speculation- because ADI previously stated (28 Jan) that we could expect to extrapolate flows from Kennedy results, they might be bound to issue a caution if they would expect materially less from Weston. That could mean 1,400bpd + 6mmcfgpd. " Still around the same figures, slightly higher.... at $4-6M for AUt and 2-4M for ADI, AEK
All in all seems to indicate all JVP's rediculously undervalued based on anticipated and possible near term results. Not a lot of value has been placed on any future earnings. Withsome other asx Eagleford explorers running at 17+ PE....we may see a major re-rating upon bankability very soon.
From a speculative funnymentalist view all three JVP's would in my amatuer opinion, be less then 50% of thier calculated value if Weston is in the range discussed. If Easily then comes online on the back of it with better figures again....then it could possibly add that much again at a minimum....
So sp based on postive very good weston - i speculate IMO (DYOR) ADI 46c +, AUT 80c +, EKA 25c+
Based on very good Easely and Weston i speculate IMO (DYOR) ADI 69c +, AUT 1.20c +, EKA 39c+
The above rough calcs are amatuer opinion only. DYOR and seek expert advice. This is extremely high risk. Currency and volatile commodity prices may massively alter results.
Depending on the reason AZZ is halted at present may have our 3 JVP's as the shining starts of the Eagleford on the ASX.
Disc - i own AUT, DYOR
Further to the above, and to Agentm's post #4714 of 18 Feb, I have attempted to assess the "oil aspect".
The attached sheet comprises three sections:
1. To check that I am reading ADI's Slide 15 correctly.
2. To determine the oil and gas prices that ADI have used in arriving at an gas/oil conversion factor of 10,000 cubic feet of gas = 1 barrel of oil.
3. To determine the effect of the current gas and oil prices on the 130BCFe deterministic estimate, and on the 5.5 BCFe recovery per well, which is affected in the same ratio.
There are some obvious conclusions, but the main one is that the high liquid content of the product, along with a disproportionately increased oil price, increases the 130 BCFe deterministic estimate by 39% to 181 BCFe, and the 5.5 BCFe recovery per well to 7.6 BCFe. This will fluctuate, of course, but that's how it seems at the moment.
The above takes no account of the other value adding enhancements described by Agentm.
Feedback welcomed.
The attached sheet comprises three sections:
1. To check that I am reading ADI's Slide 15 correctly.
2. To determine the oil and gas prices that ADI have used in arriving at an gas/oil conversion factor of 10,000 cubic feet of gas = 1 barrel of oil.
3. To determine the effect of the current gas and oil prices on the 130BCFe deterministic estimate, and on the 5.5 BCFe recovery per well, which is affected in the same ratio.
There are some obvious conclusions, but the main one is that the high liquid content of the product, along with a disproportionately increased oil price, increases the 130 BCFe deterministic estimate by 39% to 181 BCFe, and the 5.5 BCFe recovery per well to 7.6 BCFe. This will fluctuate, of course, but that's how it seems at the moment.
The above takes no account of the other value adding enhancements described by Agentm.
Feedback welcomed.
Attachments
wrong'un
The oil/gas conversion is generally done on the basis of BTUs and we don't know that but, for this type of calculation, 5,700 cfg = 1 bbl might give a closer answer.
These are long life wells, which means that the recoverable reserves need to be heavily discounted for time. That can be done by applying a much lower price. Maybe $15 - $20 for the condensate (suggestions?) and 10% of that for the gas (suggestions?).
Rambling
There's another thing about Hilcorp scrabbling for acreage that I don't really get. Between Sugarloaf and Longhorn they might drill (as discussed) 500 wells before they run out of land. That's years of drilling. In the meantime, if they are paying, say, $500/acre pa, that would be $50k per potential well site pa for potential future benefits. Enough land for 100 wells for drilling after S/L & Longhorn would cost them $5m pa, assuming that the landowners would be happy with just the rents for years and years.
The oil/gas conversion is generally done on the basis of BTUs and we don't know that but, for this type of calculation, 5,700 cfg = 1 bbl might give a closer answer.
These are long life wells, which means that the recoverable reserves need to be heavily discounted for time. That can be done by applying a much lower price. Maybe $15 - $20 for the condensate (suggestions?) and 10% of that for the gas (suggestions?).
Rambling
There's another thing about Hilcorp scrabbling for acreage that I don't really get. Between Sugarloaf and Longhorn they might drill (as discussed) 500 wells before they run out of land. That's years of drilling. In the meantime, if they are paying, say, $500/acre pa, that would be $50k per potential well site pa for potential future benefits. Enough land for 100 wells for drilling after S/L & Longhorn would cost them $5m pa, assuming that the landowners would be happy with just the rents for years and years.
Thats less then one good well to pay the enitre acerage leases per annum, so its no big shakes. While $5m p.a. seems a lot , with the given likely upside and well counts you speak of, its an absolute pitence to pay such rentals. Sure intially right now it seems a lot for AUT, ADI EKA, but in hilcorp terms its peanuts. And with the long term upside that it can secure its a upside downside gamble that makes very good economic sense. by 2011, this will seem so cheap it wasnt funny.
All opinion of course.
Hi Estseon
I assume that a gas/oil conversion rate of 5,700 cfg to 1 barrel of oil assumes that the BTU values of each are equivalent - that's fine, we are comparing heat with heat, and 1 barrel of oil has presumably the same number of BTUs as 5,700 cubic feet of gas. The conversion rate will be essentially fixed, subject to variations in the quality and makeup of the products.
But if we are comparing dollars values, and valuing a mixed resource, don't we need to convert using the prices? And because the ratio of gas price to oil price fluctuates, so should the gas/oil conversion rate? At current prices the dollar conversion rate is 15,962 cfg to 1 barrel of oil - ie. 1 barrel of oil is worth the same number of dollars as 15,962 cubic feet of gas.
When you talk about "heavily discounted for time", I assume you are referring to the discounted NPV of the future production. Of course this depends on the time profile of the production - I assume it will climb to a peak after x years, and then taper off. Without knowing what the shape of the curve is, we can't work out the NPV - but, very roughly, if the production each year is assumed to be equal, over a 10 year field life, and the discount rate is 10%, then the discount factor is about 0.61 = an oil price of about $48 using your discounted price approach. The figures for a 20 year production life are 0.42 and $34 respectively. My figures are slightly higher than your $15 - $20, but there they are, for comparison - you may possibly have better information to work on.
Sorry, I'm not involved in the energy sector, I'm a civil engineer - just questioning assumptions, as engineers do. Please tell me if I'm out of my depth, and I shall withdraw gracefully and enjoy the ride!
Cheers, Wrong'un
I assume that a gas/oil conversion rate of 5,700 cfg to 1 barrel of oil assumes that the BTU values of each are equivalent - that's fine, we are comparing heat with heat, and 1 barrel of oil has presumably the same number of BTUs as 5,700 cubic feet of gas. The conversion rate will be essentially fixed, subject to variations in the quality and makeup of the products.
But if we are comparing dollars values, and valuing a mixed resource, don't we need to convert using the prices? And because the ratio of gas price to oil price fluctuates, so should the gas/oil conversion rate? At current prices the dollar conversion rate is 15,962 cfg to 1 barrel of oil - ie. 1 barrel of oil is worth the same number of dollars as 15,962 cubic feet of gas.
When you talk about "heavily discounted for time", I assume you are referring to the discounted NPV of the future production. Of course this depends on the time profile of the production - I assume it will climb to a peak after x years, and then taper off. Without knowing what the shape of the curve is, we can't work out the NPV - but, very roughly, if the production each year is assumed to be equal, over a 10 year field life, and the discount rate is 10%, then the discount factor is about 0.61 = an oil price of about $48 using your discounted price approach. The figures for a 20 year production life are 0.42 and $34 respectively. My figures are slightly higher than your $15 - $20, but there they are, for comparison - you may possibly have better information to work on.
Sorry, I'm not involved in the energy sector, I'm a civil engineer - just questioning assumptions, as engineers do. Please tell me if I'm out of my depth, and I shall withdraw gracefully and enjoy the ride!
Cheers, Wrong'un
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Hey wrong un, looks impressive mate but i can't decipher is for nuts!!!!!
Do you have a $ value for your scenarios?
cheers big ears!
