ADI - Adelphi Energy

[lemontree]

Perhaps the presentation from AUT had something to do with the raised awareness and therefore increased sp. I can only assume the sp for AUT will continue on an uptrend for a while.

In relation to ADI, i think people MAY be selling out of ADI and reinvesting into AUT for the short term gains. Might also have something to do with AUT having the 3 turnbull wells.

After fraccing of the 2 new wells, ADI should see a rise in sp. (assuming the results are positive). Of course all this is my own speculation.

 

[WRONG'UN]

I agree, Lemontree, the presentation would have been a catalyst.
It's worth noting that yesterday's volume in AUT was more than 10 times the volume in ADI, and it was also the highest for many months. In contrast, the ADI volume was still quite low. So, while there may have been some rotation out of ADI into AUT, the numbers indicate that the move in AUT was primarily driven by new buyers. That's a good sign for the other JV partners, at some stage.

 

[condog]

With due respect - smell the cheese. its so obvious what is happening and why. Dont bury your heads.

SO far AUt is not even on par in terms of $sp/boe reserves or production, let alone the value of whats currently happening. Expect to see a monumental gap occur.

ADI is fantastic imo, but dont expect to see it track AUT in the short term. Even beyond that surely AUt will have too much cash flow and too much devlopment happening outside the AMI for ADI to track it.

Id simply be comparing ADI and EKA from this point on.

 

[Agentm]

With due respect - smell the cheese. its so obvious what is happening and why. Dont bury your heads.

SO far AUt is not even on par in terms of $sp/boe reserves or production, let alone the value of whats currently happening. Expect to see a monumental gap occur.

ADI is fantastic imo, but dont expect to see it track AUT in the short term. Even beyond that surely AUt will have too much cash flow and too much devlopment happening outside the AMI for ADI to track it.

Id simply be comparing ADI and EKA from this point on.

a decoupling of aut from the other jvp members is very much expected as there has to be, at some stage, a consideration given for adi towards their acreages

we also will see reserves based on the 23,000 acres come into play as the AMI wells of easley, morgan and rancho grande are fracced. all wells are totally free carried to the jvp partners and i would expect the recent assessment by hartleys to come into play, they see .45 as a short term price target. i expect that one to arrive shortly myself..


ADELPHI ENERGY LTD

What happened?

Adelphi Energy has reported sustained average 30 day flow rates from its
first two wells at its Sugarloaf project onshore USA. The Kennedy #1H well
has averaged 11.7 million cubic feet of gas equivalent per day* (“mmcfe/d”)
and the Weston #1H well has recorded average 30 day production of
11.4mmcfe/d. These results have been achieved without the benefit of
installation of production tubing, which has been indicated in nearby wells to
result in a decrease in initial decline.

The Company has also reported that it now has three additional wells in the
process of being drilled or fracture stimulated.

ADI is free carried through the current work program.
What does it mean?

At these rates, we estimate that each well is making US$50k-US$65k in
revenue per day, with combined revenue from both wells grossing estimated
US$3-4m in the first 30 days. We calculate that the average gas /
condensate production per well is 3.75 million cubic feet of gas per day with
615 barrels of condensate per day (flow rates will decline significantly in the
first year). With well costs estimated at US$6-8m, payback should be
achieved within 5-8 months.

It is still early days; however, each piece of new information received to date
has increased the potential of the play and estimated ultimate recovery per
well is now likely to be significantly greater than 5 billion cubic feet of gas
equivalent. To give an indication of potential value, there could be over 200
well locations on the Sugarloaf acreage, resulting in over 1 trillion cubic feet
of gas equivalent. We estimate that Adelphi’s share of this at current spot
prices (US$80 oil, US$4 gas) is worth ~150cps (using US$2 per mcfe
calculated net present value and 10% working interest post farmout).
At US$100 oil, the valuation potential increases to over 200cps.
Strong newsflow is expected over the next 2-3 months as the additional 3
wells are completed, fracture stimulated and flow tested. Now that the
technical risk has been decreased due to a substantial number of successful
wells being drilled in the play, we view these wells as very low risk (90%
chance of success).

Hartleys Initial View

We recently upgraded ADI to a Buy based on the initial flow rates received
from its first two wells and consistent information from wells in the
surrounding acreage. This new information has increased our confidence in
the potential of the resource and we re-iterate our Buy recommendation and
short term price target of 45cps.

If initial results from the next three wells (expected over the next 2-3 months) continue to be strong, there is substantial room in our valuation for further large upgrades in price target and valuation, as indicated by our unrisked valuation of 188cps.

what i noticed over the last few days was the reclassification of the conocophillips bordovsky well to a sugarkane gas well. and all the dewiit county wells are also named as sugarkane.. i think that will become a significant factor in the future myself as hilcorp and conoco expand into the play.. for those not aware of the implications of a gas field compared to an oil field like eog are facing in the north then i suggest you dyor..



hartleys maintains the project is 90% derisked.. and imho they are spot on.

the small daily turnover in adi is hardly a concern to me, imho those buying atm are picking up great value as the jvp i expect will have a significant re rating to the hartleys .45 very shortly.,,, as soon as the jvp announce the frac has started and the results come through is when i expect those targets to be met. if it doesnt i know where my spare cash is going!

 

[lemontree]

Time Price Volume Value Condition
10:21:01 AM 0.275 56,201 15,455.28
10:21:01 AM 0.275 12,223 3,361.33
10:21:01 AM 0.275 20,000 5,500.00
10:21:01 AM 0.275 11,576 3,183.40

one person bought up 100k shares, readying for the future haha

 

[WRONG'UN]

Now it just needs the 325,000 share iceberg from 27.5 - 29c to melt - like the 361,000 share iceberg on AUT yesterday.

 

[rock86]

With due respect - smell the cheese. its so obvious what is happening and why. Dont bury your heads.

SO far AUt is not even on par in terms of $sp/boe reserves or production, let alone the value of whats currently happening. Expect to see a monumental gap occur.

ADI is fantastic imo, but dont expect to see it track AUT in the short term. Even beyond that surely AUt will have too much cash flow and too much devlopment happening outside the AMI for ADI to track it.

Id simply be comparing ADI and EKA from this point on.

Condog I'm pretty sure we all know that AUT is going to create a gap from the other JVP's with Longhorn and Ipenama being drilled, however I do think with the recent marketing and promotion that AUT has been doing is the reason we are seeing an increasing number of trades over the past few days not there additional acreage (which has been known for some time now). Maybe the other JVP's can take a leaf out AUT's book and start promoting and marketing themselves as AUT is presently doing, good on the AUT BOD.

 

[cicak_kupang]

Condog I'm pretty sure we all know that AUT is going to create a gap from the other JVP's with Longhorn and Ipenama being drilled, however I do think with the recent marketing and promotion that AUT has been doing is the reason we are seeing an increasing number of trades over the past few days not there additional acreage (which has been known for some time now). Maybe the other JVP's can take a leaf out AUT's book and start promoting and marketing themselves as AUT is presently doing, good on the AUT BOD.

Yep agree there. This has been on goat for a while. While its great to have a company thats not rampng itself and playing its cards close to its chest with very smooth and calculated announcements, there is nothing wrong with a bit of self promotion. i know, fine line between self promotion and ramping. under promotion can be just as worthless as self ramping.....

 

[Agentm]

[/B][/COLOR]

Yep agree there. This has been on goat for a while. While its great to have a company thats not rampng itself and playing its cards close to its chest with very smooth and calculated announcements, there is nothing wrong with a bit of self promotion. i know, fine line between self promotion and ramping. under promotion can be just as worthless as self ramping.....

imho the recent promotion i have seen on the eagleford have left some with egg on their faces

an ip is nothing, adi has released the 60 day flow rates on the two short laterals of kennedy and weston.

all are extremely impressive

imho once the flow rates of the next wells are disclosed, expect some serious promotion..

if you pin it all on an ip and it turns out to be a fizzer, then where are going to go, and where is your reputation?

adi and aut are doing it right

right now is the perfect time to accumulate

all imho and dyor

 

[Sharejon]

What do you think is the reasoning behind the the fact that there are currently 540,000 shares in the purchase collumn and 1.2 million in the sell collumn?

I noticed Wrong'Un state that maybe it was a case of investors 'trading' their stocks from ADI into AUT. Any other opinions?

Thanks,
S

 

[WRONG'UN]

Actually it was Lemontree who suggested possible rotation out of ADI into AUT. I noted that on the basis of the trading volumes in the two stocks, rotation would have had only a minor effect on AUT's sp - there was a lot more new buying.
The relativity between ADI and AUT (and EKA for that matter) is an interesting subject. While there are the fundamental considerations that have been well described already, there is also a technical aspect. The attached PairTradeFinder charts (see separate thread for PairTradeFinder details) show a definite cyclical pattern in the relativity between ADI and AUT - at the moment it could be argued that ADI is on the verge of reasserting itself against AUT.
There is, of course, no guarrantee that the historical pattern will repeat, so I'm not sure if this helps or not - but there it is.

 

[JOHAUD]

Interesting-

no wonder they all want to be there,

http://www.dailywealth.com/1330/The-Most-Important-U-S-Oil-Discovery-in-40-Years

 

[jancha]

Interesting-

no wonder they all want to be there,

http://www.dailywealth.com/1330/The-Most-Important-U-S-Oil-Discovery-in-40-Years

If this is the biggest oil find in forty years why hasn't the likes of ADI AUT or EKA at their current sp been gobbled up by Hillcorp or any other major player?
ADI in particular seems to be losing popularity & the sp reflecks it.
If this were a serious play the sp would have more volume & the sp would be heading north.
Apart from AUT with it's presentation yesterday there hasn't been any real volume with these companies.
For this so called biggest oil find in forty years Blah Blah Blah there is bugger all interest on it other than on this forum.

 

[condog]

You can accuse me of what ever you want after this post but i tell it honestly how i see it.

1. invest to make money.
2. move your money to where you see the greatest gain.


ADI will not come close to AUt and imo you are extremely niavie to hold unless required to do so due to a tax position or other that deminishes normal market forces.

AUT has the AMI benefits.

The slalable assett value of the extraordinarily valuable acerage

The extra free carried wells in a better area and higher percentage interests.

ALl this will establish a clear gap in the very short term. But then the extra cash flow, acerage will allow AUt to drill its acerage and take interest in other wells at a much more accellerated rate the ADI or EKA.

As such i see an accelleration now followed by multiples of that accelration as the cash flow allows further drilling.

As a rough guid if at the end of the free carried program ADI has 3 wells cash flow they may be able to drill 1 well per 2 months using cash flow. In comparrison AUt will have 10 wells some at much higher interest.
Thus they can drill at 3 times the rate using cash flow to fund.

Hence after 12 months ADI might at best have an extra 6 wells using existing capital, where as AU will have possibly 18 wells.

In the following 12 month period they will have cash flow from 28 wells compared to ADI' possible 9 wells. Get the picture its case of not only acerage, but leverage and accelerated cash flow.

do as you wish but please be open eyed. ADI is fantastic, but your kidding yourslef if you think it can stay anywhere near the pace of AUt.

Id be more then happy to see people in here in 2 years time saying i stayed in ADI to diversify my risk,. But id be horrified if they stayed in hoping to get the same return on equity.

 

[jetblack]

Your accelerated multiple well work is pretty basic and I think the majority of ADI investors understand what the investment in Eagleford is about. I dont think the investors are kidding themselves, its not the impression I get.

What I believe is an important factor is the management of each of the jvp's acerages. What about the multiples of dollars needed to fund each well, surely AUT will need more multiples of cash than what your skewed example outlines.

But as yet we dont know what are the real consist figures will be, nor do we know what any future well will produce, I understand the derisking of the venture.

Its still speculative, but im in no hurry.

 

[condog]

jet theres no skew about it.

If AUt have 10 wells of post hilcorp cashflow and ADI have three which do you think will be able to fund more drilling.

In the second year if AUT have significantly more wells, possibly 3-4 times as many, which do you think will have more cash fklow for the following year.

Its not rocket science. If you chose to ignore or disagree with what i regard as this fact thats absolutely 100% fine, but dont say you where not warned or whinge that ADI is not keeping up with AUt, which has been the case lately.

Just do yourself a favour and go into it with eyes wide open.

I have , in recent months sold SEA, ADI, AZZ and EKA plus a few others and put all funds into AUt, not because i have any allegiance with AUt over the others, but because i did enough research and have enough experience to know whats happening. Its a game of multiple and leverage. AUT has it all, with the derisked capacity the Eagleford now provides.


Do as you will, but please know whats happening its so blatently obvious.

 

[tomcat]

jet theres no skew about it.

If AUt have 10 wells of post hilcorp cashflow and ADI have three which do you think will be able to fund more drilling.

In the second year if AUT have significantly more wells, possibly 3-4 times as many, which do you think will have more cash fklow for the following year.

Its not rocket science. If you chose to ignore or disagree with what i regard as this fact thats absolutely 100% fine, but dont say you where not warned or whinge that ADI is not keeping up with AUt, which has been the case lately.

Just do yourself a favour and go into it with eyes wide open.

I have , in recent months sold SEA, ADI, AZZ and EKA plus a few others and put all funds into AUt, not because i have any allegiance with AUt over the others, but because i did enough research and have enough experience to know whats happening. Its a game of multiple and leverage. AUT has it all, with the derisked capacity the Eagleford now provides.


Do as you will, but please know whats happening its so blatently obvious.

Not quite so obvious Condog,

No one knows what the forward plan is for hilcorp or how these fracced wells will produce.

They may pay back Hilcorp in 2-3 months or it may be longer...so AUT may be waiting longer for cashflow. Remember AUT only get paid once Hilcorp have re-couped their driling and fraccing costs.

Ever here the story about the small players being drilled out, with AUT's added percentage for their additional acreage comes additional risk associated with their ability in keeping up with capital requirements...no one really knows what Hilcorps forward plan is. Hilcorp will not wait for AUT to raise money if they decide to go nuts!! Look at how quickly they are smashing the wells at the moment. Who is to say how fast they accelerate their drilling program. The presentation from AUT provides a nice little schedule for forward drilling but none of the JVP I talk to can give me any indication of what the real forward plan for Hilcorp is.

I wouldnt be so confident in telling people what is blantently obvious when it is far from so....AUT may have more blue sky based on their acreage but be careful...as you say go in with your eyes wide open...LOL

 

[rock86]

Not quite so obvious Condog,

No one knows what the forward plan is for hilcorp or how these fracced wells will produce.

They may pay back Hilcorp in 2-3 months or it may be longer...so AUT may be waiting longer for cashflow. Remember AUT only get paid once Hilcorp have re-couped their driling and fraccing costs.

Ever here the story about the small players being drilled out, with AUT's added percentage for their additional acreage comes additional risk associated with their ability in keeping up with capital requirements...no one really knows what Hilcorps forward plan is. Hilcorp will not wait for AUT to raise money if they decide to go nuts!! Look at how quickly they are smashing the wells at the moment. Who is to say how fast they accelerate their drilling program. The presentation from AUT provides a nice little schedule for forward drilling but none of the JVP I talk to can give me any indication of what the real forward plan for Hilcorp is.

I wouldnt be so confident in telling people what is blantently obvious when it is far from so....AUT may have more blue sky based on their acreage but be careful...as you say go in with your eyes wide open...LOL

Here here tomcat Condog, I'm pretty sure nobody here has been whinging about AUT gaining and putting a gap on ADI, because we all know this is going to happen. As for the fact about the extra cah flow from additional wells and a higher interest, we again all know this and will see AUT distance itself again.

However where I think most people are dissapointed is the fact of how good we know this play is and that ADI has been lacking interest from investors as seen by the sliding share price and little volume.

And your views on AUT and it's extra acreage, even with this extra cash flow AUT is going to have to come up with larger capital for new wells (with more of an interest) fast, and at the rate Hilcorp is drilling there cash flow from the free carried wells (and the'r cash at bank) probably won't see them through the drilling problem without a cap. raise IMO. That's with my eyes open

 

[jetblack]

con, you might find that I dont whinge about what I invest in. Its great that you can swap and change your holdings in various companys.

You got this razzle n dazzle thing going on like a sideshow vendor. Tomcat shares the same opinion on your simplistic well acceleration.

Look into how the jvp's are going to manage the acerage, I know thats foremost with ADI management and they would concur that AUT will need a huge deal of cash to go forward/manage their lease and more than likely their portion of wells to be drilled.
This is no sledge on AUT management just my opinion.

The presentation from AUT certainly got the desired result.

As for the do yourself a favour with the eyes wide open, yeaah right,,,lol.

 

[Sdajii]

But id be horrified if they stayed in hoping to get the same return on equity.

So you expect ADI to go up dramatically, and AUT even more dramatically... and you'd be horrified if in two years people made a great profit with ADI because they could have made a better profit with AUT?

I don't have a crystal ball and don't know what will actually happen (though I suspect in two years anyone who invested in either will be happy). You may be right, you may be wrong, but either way, apparently you horrify easily! I wish I was good enough for the most horrific outcome to be a great profit which is less than it could have been

Good luck to all ADI, AUT and EKA holders