ADI - Adelphi Energy

[jancha]

I just had a thought. 5.5 mill is barely enough to cover expenses for just one well. What are their plans for this money ? One more rig ? Maybe two ? Etc. ?

Thoughts and comments ? In the oilfiled 5 mill is not that much money. I hope it was worth it.

Didn't they say in their presentation that they were funding 10% of the future drill costs?
How does that equate to one or two wells?

 

[Ramblin Round]

Didn't they say in their presentation that they were funding 10% of the future drill costs?
How does that equate to one or two wells?

I know. That's exactly what I'm trying to figure out. Did somebody miss a zero on that 5.5 ? 50.5 million yes. 5.5 million to fund 10% of all future production will need to be explained in a manner in which I can understand it. I must be too dumb to know how 5 million will fund 10% of future prodution when it's $100,000 on average per day to operate a rig.

 

[estseon]

General News:

"The US administration has banned oil drilling in new areas of the US coast while the cause of the oil spill off Louisiana is investigated."

Don't know if offshore in the Gulf of Mexico ranks as competition but it can't be bad for us.

Ramblin:

ADI used an estimated well cost of $7m in its presentation released yesterday. In view of the speed with which they drilled Rancho, your $100k/day would account for little over a third of that cost estimate. Sure, they have other costs and then the fracture stimulation but $7m looks like it is more than comfortable.

ADI's share of that cost is $700k. Present cash (less about $3m for Yemen) would cover 8 wells. Payout is 4 - 6 months per the presentation. So, if they drill with just 2 rigs, the development of S/L should be covered by that capital and and by sales cash - those 2 rigs have to complete the farm-out obligations on Longhorn and on Ipanema before they can return to S/L.

Kennedy and Weston should be paid out soon and Morgan should be paid out by the end of October at the latest using their payout estimates etc. Then Easley and Rancho should be paid out by the end of November on the basis of their fraccing schedule..

What the capital might not service is the 2011 ramp up in operations. How many rigs??? We cannot possibly guess at this stage.

 

[Ramblin Round]

The offshore play affects the economics of oil and gas but from an investor perspective it is an entirely different arena with entirely different players and expenses, etc.

Of notable discussion however is that Hilcorp was (is) primarily an offshore production company to begin with. If anything they've just found their onshore project's motivation. lol.......

 

[WRONG'UN]

Mention has been made of the NYSE listed stocks with Eagle Ford interests.
The weekly relative strength chart, Conoco Phillips / Dow Jones is attached. COP has been outperforming the DOW for several weeks, and the relative strength has now reached resistance at the level of the May 2009 swing high. If it can clear the resistance I'm thinking long COP, short DOW - it might be good insurance if the DOW decides to pack a sad.

 

[Ramblin Round]

Yes. JP Morgan has been hot on the investment side along with Wells Fargo and many other heavy hitters. Pioneer PXD has been on par with COP this past week even through the rig mess offshore with BP.

I'm out of play money and can't do anything but sit back and watch the stocks go up but yes I've noticed too. Maybe Wall Street will take a bite out on every player in Eagle Ford and we'll really see some action stateside.

 

[philly]

What's going on? On the back of positive news the SP for ADI goes down albeit on low volumes whilst AUT and EKA are both up on higher volumes. The news is the same the effect is opposite.

 

[jancha]

What's going on? On the back of positive news the SP for ADI goes down albeit on low volumes whilst AUT and EKA are both up on higher volumes. The news is the same the effect is opposite.

Maybe holders of ADI jumping ship after capital raising went to sophisticated investors.
Agentm with your posting regarding EKA falling short of the capital raising & ADI not taking the chance of that happening & not offering to the public is BS.
Wouldn't AWE have taken up any slack if there was a short fall?
I think AUT is starting to look more attractive & slowly over time will change over.
Cant believe you'd be happy with ADI's capital raising unless you were one of the sophisticated investors.

 

[Agentm]

jancha.. keep it civil please..

my posts are all imho and dyor.. i dont need your personal abuse thanks

 

[1968BELBAY]

adi seems to be full of bs to me how can aut and eka move up and adi move down not happy i will hold only cause im in to deep........

 

[jancha]

jancha.. keep it civil please..

my posts are all imho and dyor.. i dont need your personal abuse thanks

Dont mean to be abusing you Agentm but surely you dont believe that had ADI gone public they would have fallen short?
Would you not have preferred the option of buying in at 25c as yourself being a long term holder?
You seem to praise the management on the decisions they make but i dont see anything positive for the sp or in particular the confidence in long term holders as myself out of this.
Who are they looking after by keeping this capital raising to just sophisticated holders?
Who will company management be looking after in the future?

 

[barney]

Maybe holders of ADI jumping ship after capital raising went to sophisticated investors.
Agentm with your posting regarding EKA falling short of the capital raising & ADI not taking the chance of that happening & not offering to the public is BS.
Wouldn't AWE have taken up any slack if there was a short fall?
I think AUT is starting to look more attractive & slowly over time will change over.
Cant believe you'd be happy with ADI's capital raising unless you were one of the sophisticated investors.

Not directed at you jancha so please don't take offence, but there seems a lot of unwarranted angst against the ADI capital raise .....

I wonder how many of the "un" sophistocated punters would have actually parted with their cash at 25 cps considering EKA was undersubscibed, and the market in general looks a little toppy .....

ADI management have secured the cash required without having to go through unecessary uncertainty ....... maybe AWE would have taken up the slack as you say, but that is an assumption we can't be sure of considering the sugarkane is only a small portion of their interests

My opinion for what its worth ..... EKA up until today was the undervalued partner ..... AUT at its current sp has a lot of short term upside already factored in relative to the other partners imo, and considering the sp of ADI today, I think it is now entering the under valued zone ...

Today looked like a few punters switching camps from ADI to either of the other JVP's ...... The market runs on sentiment, and when those "trading" AUT see the momentum start to drop, they will switch back or sell in an instant ......

Sour grapes directed at ADI management imo is nothing more than an admission of lack of forsight from any traders who have had ample opportunity to switch from one JVP to another if they wanted .... I was tempted to swap some ADI when AUT was 23 cents but I didn't ..... Am I happy about that? No ! ...... am I winging about it? Absolutely not ! ... It was my decision !!

ADI management have done a pretty responsible job from the outset imo ..... I have the current sp's of the JVP's as slightly out of balance in ADI's favour ... time will tell. Cheers.

 

[Hatchy]

ADI not taking the chance of that happening & not offering to the public is BS.
Wouldn't AWE have taken up any slack if there was a short fall?
.

They might have fallen short if they had gone public. You're no doubt aware that each day they're on thin volumes. You probably also know that this means that there's either little trading in the stock due to the average investors holding the stock long term or it's due to institutions having a good number of shares and choosing to hold on.
Either way there's good reason to go to institutions to get the money. I've been in ADI for some time and have passed up raisings because i'd rather have other options with the money. You're probably the same with adi or others.
Institutions can buy large amounts of new shares and it means that only a small number need to be approached. This is far less messy, happens quicker and I suspect costs a shade less than going through with a full SPP.
ADI have got the money, they've set themselves up going forward and i'm happy with that.

As far as AWE picking up the slack of any SPP - do you really think that ADI board wants to give AWE a greater share in the company (at a 15% discount) when they kicked ADI out of their offices?
I think ADI is grateful that AWE has the cash to maintain their level of investment, but I doubt they're best buddies just yet.

Barney - Agree fully.

 

[sam76]

The whole thing could have been sorted with everyone happy if management had offer a 1:20 (or whatever the correct ratio would be) to existing shareholders with the remainder being taken up by institutions.

Everyone wins.

* this option would obviously work better with time on side

 

[mick z]

Dont mean to be abusing you Agentm but surely you dont believe that had ADI gone public they would have fallen short?
Would you not have preferred the option of buying in at 25c as yourself being a long term holder?
You seem to praise the management on the decisions they make but i dont see anything positive for the sp or in particular the confidence in long term holders as myself out of this.
Who are they looking after by keeping this capital raising to just sophisticated holders?
Who will company management be looking after in the future?

I'll give you the truth why they didn't come to its exiting holders

its because last time they came to us nobody supported adi....it was well under subscribe to, if it hadn't been for awe adi wouldn't have raise very much at all.
and its all because investors had no confidence in them with nothing happening for over twelve mths.

cheers

 

[estseon]

AUT SP is now 2.5 x ADI, which is looking quite toppy. You would have to assume that the average worth of their acreage is greater than the average worth of the S/L acreage to push that ratio much higher. That might well be, of course but another alternative is that we could see arbitrage traders switch from AUT to ADI.

Personally, I think that fundamentals are now near exhausted and the ADI CR is irrelevant. Besides which, AUT has signalled clearly that it will need to make a CR to develop Longhorn and Ipanema post Hilcorp's farm out drilling and it has had some dilution itself from option exercises.

I hold both shares.

 

[jancha]

I'll give you the truth why they didn't come to its exiting holders

its because last time they came to us nobody supported adi....it was well under subscribe to, if it hadn't been for awe adi wouldn't have raise very much at all.
and its all because investors had no confidence in them with nothing happening for over twelve mths.

cheers

How long ago was that?
There's a fair bit more confidence around with the success of results consistently flowing thru with ADI & surrounding companies.
Sam76 post is more along my way of thinking.
Whats stopping the large holders @ 25c off loading at 15% profit over next few months?
In turn that will keep the sp down imo.

 

[condog]

AUT SP is now 2.5 x ADI, which is looking quite toppy. You would have to assume that the average worth of their acreage is greater than the average worth of the S/L acreage to push that ratio much higher. That might well be, of course but another alternative is that we could see arbitrage traders switch from AUT to ADI.

Personally, I think that fundamentals are now near exhausted and the ADI CR is irrelevant. Besides which, AUT has signalled clearly that it will need to make a CR to develop Longhorn and Ipanema post Hilcorp's farm out drilling and it has had some dilution itself from option exercises.

I hold both shares.

Esteon they have not said a CR. Definitely not. AUt have said they think they have enough capital with a debt facility and various options. Jon Stewart is well aware of the shareholders feelings with regard to cap raisings and he has just witnessed the backlash against his JVP's first hand.

Theres ample capital to avoid a CR at present for the current program imo but DYOR.

ADI holders i dont hold, but i share your frustration with timing and price. A 1:20 offer would have been much better. Got to question managments loyalties on that one.

 

[Agentm]

adi seems to be full of bs to me how can aut and eka move up and adi move down not happy i will hold only cause im in to deep........

i am loving the sp movement, i hope it goes down heaps more.. i have a lot of orders waiting..

as far as i am concerned the more it shifts down the better and keep it coming..

adi was up on all the jvp members in a big way for months and there was non stop hankering by the usual suspects, management was lousy, adi this adi that.. lol.. but of course the eka and aut threads were not even having any critique given of their positions.. they are not doing anything bad what so ever..

cap raisings like what azz organised gave them significant support.. and imho adi territory is far superior to the azz region.. their 60 day results i posted have not indicated any spectacular at all

whos to say there is not a reason for cap raising, things like a forward well program or expansions?

imho its done for a reason and i am looking forward to the next months ahead

bring on the sp fall.. i am ready for it..

 

[mick z]

seems agentm has no confidence in ADI if he is waiting for the sp to drop.

quote- bring on the sp fall.. i am ready for it..

i think we should all sell now and wait for the drop. LOL