ADI - Adelphi Energy

[davepan]

Hi guys,

Things have been very quiet in here over the past few weeks because of the lack of information released to the market.

I am currently considering whether to increase my holdings based on the recent weakness in ADI/EKA/EKAO.

Based on the recent report released by Hartleys does anyone have a view on whether the chance of success of either the primary/secondary has changed?

Or is it still too early to predict and we are all speculating and should wait on the results of the wireline results?

I am no oil/gas expert so and advice would be greatly appreciated.


Considering the recent performance of EKA/EKAO, there is a clear buying opportunity with the potential upside from Sugarloaf.

 

[Agentm]

the austin chalks are a definate, there is no doubt at all in my mind the well is successful. $2+ and multiple (double figure) wells to expand and develop the field..

Due to the highest levels of secrecy and the most delicate ways in which the JVP's have announced their finds you can see the market is totally blindsided by the implications of the reporting and the reality of the size of the finds.

You have to understand that texas crude first and formost pulls the strings, the JVP's are merely small fry in the equation. THE WELL SHOULD HAVE BEEN A CLOSED WELL.

It is only due to the laws governing the ASX that the JVP's here in australia are forced to announce, and tactically and very strategically they have managed to announce all significant finds of commercial significance only! All other finds which "could be commercial" or more to the point, "could be remotely distinguished as possibly uncommercial", have deliberately and specifically left out of all reports. So you have to understand the significance of the very subdued and very scant reorting on all the finds so far, they are by and large well worth being held in very very high regard and not to underestimated in any way shape or form!!

So for those not close to the source, or those unfamiliar with this practice, most people are simply unable to evaluate the significance of the sugarloaf prospect.

I know that if matters had have been played the way the texas crude boys wanted, then no information at all would be known today in any form and in any forum. and only after flow testing would there have been a small announcement of a find. no fanfare and no flag waving, and that would be to protect their own interests, the protection of their ability to closely guard information and sign new acerage, and to not prohibit extending and broadening current acerage and leases. What chance does texas crude have of signing any land owners on any prospects on the hosston sands anywhere in texas, as today the information that has been leaked so far would stop dead their being any advantage in getting good deals for the operators looking at the sands!

I wount be selling any shares in ADI, today tomorrow nor next week.. I am 100% certain of the success of the secondaries in the well. I not only believe the secondary have mmet the highest expectations that were estimated, I believe the rumours and figures distributed last year are accurate and have been unable to find any reason to doubt their integrity.

My conviction on the primary is that the information has been kept so tight and secretive since the end of drilling that i am in no way doubting the primary is exactly as expected, and the figures are at a minimum the P50 estimates for the primary. I totally believe the flow testing after fracing will yield flows far in excess of the minimum rquirement of commercial viabilty for the primary. Its deep, its very very hot and the expertise of the guys that are about to do the flow test will get texas crude the results they have been almost certain was always there!

I think the SL well is difficult for the average investor to understand, and many dont have the patience to wait a few weeks and get the real figures, i see many short term traders are opting out and selling down the stock, which is fine by me as they must have made some gains, but the real gains of 500% are about to arrive in the near term.

good luck to anyone who is on the stock and good luck to those who are bailing on the short high.. everyone has different agenda in investing, for me as a longtermer i see only great days ahead.

all in MHO and DYOR

 

[Dums]

Agent M
You certainly have courage in your conviction !!!!
Have you a deeper level of access to information, or a professional insight.
I certainly hope you are correct as I have 'skin in the game' so to speak.
What to you would be (i) a satisfactory result, and (ii) a great result... in terms of mmcfgpd and bopd for the initial well.
As what about reservoir size and future completion?
Noting that the folk are talking about fracing, and there is an inherent risk of contamination/poor completion and/or tightness, what level of risk do you associate with this throughout the depths of the well ... are they only fracing the primary?
Do ADI have common terms for all depths of the well? I understand EME's terms may be 'slightly' different for various depths/and or primary/secondary .. can you throw any light on this ... it concerns me somewhat ...
Sorry about the 'more questions than answers' .. I guess it's a sign of where we all are !!!
Good luck folks - I'm off to bed ... spent too long doing research tonight .. missus doesn't love me .. only a cold ars e to look forward to !!!
Cheers Dums

 

[Broadside]

ADI has rights to all depths over the entire SL prospect, some of the other partners have different terms...Eureka has rights to all depths on this well but only shallow rights elsewhere on about 1/3 of the prospect...at least this is my understanding.

 

[sam76]

Good luck folks - I'm off to bed ... spent too long doing research tonight .. missus doesn't love me .. only a cold ars e to look forward to !!!
Cheers Dums

LOL

 

[wallave]

Agentm,
Great post, This thread missed you over Christmas.

"I totally believe the flow testing after fracing will yield flows far in excess of the minimum rquirement of commercial viabilty for the primary"

What is the timeframe that you expect the flow testing results would be released which will in turn put a rocket under the shareprice.
I've been holding both ADI and EKAO since October and plan to see this through.
Your knowledge and confidence in this stock is very comforting to a fellow holder.
Appreciate your comments.
Cheers

 

[nioka]

If they are ignoring ADI look at how the AUT shares are being treated in that way. I am now selling half my ADI shares and buying AUT, almost a 2 for 1 exchange.

Last week 1 ADI share bought 1.8 AUT shares. Today it gets only 1.5. Glad I got in last week. It may be time to change back again. The way the relationship keeps changing it offers a way to increase the number of ADI held without the risk of being caught out with an announcement re sugarloaf when you are not holding. I have done this 3 times now with good results.

 

[Caliente]

hi nioka, looks like you're well versed in the nature of the SL well. thought I'd ask u a quick q.

which of the following three do you feel offers the best value exposure to Sugarloaf?

1. ADI
2. AUT
3. EKA

Cheers
-Cali

 

[conman]

1. ADI----good choice as there are other projects which have good 'insurance potential'

2. EKA----Best to be in if SL is a cows guts (full of methane) with good porousity as the potential upside is the greatest only problem is that this is also the riskiest -> no insurance wells (except for turkey but this looks to be dead and buried)

3. AUT--- Not to much upside potential unless we have hit 3Trillion which (I think due to my readings of the reports) is not the case.


So its up to u but I think that at EKA's current (cheap) prices if u want a punt (with big rewards) go here. But if u want to be a little more conservative go ADI... or of coarse you could hedge ur bets and go halves in the two!!!

Good luck. (get in soon as the annon. will be before the end of the month i suspect)

Conman

 

[Caliente]

Thanks conman! While we're talking petroleum, what do you think about Baraka's Heron-1 well? So far its been completely dry all the way to 3550m!

However, the company says the aptian stage where they expect the oil is 3600m-3800m. My petroleum geology is essentially non-existent.

Is it good or bad that its been dry in the drill-up to this stage?

I hear things about seal rock etc etc

 

[nioka]

hi nioka, looks like you're well versed in the nature of the SL well. thought I'd ask u a quick q.

which of the following three do you feel offers the best value exposure to Sugarloaf?

1. ADI
2. AUT
3. EKA

Cheers
-Cali

ADI without a doubt. If sugarloaf is great then they all have value but ADI will have the best value. ADI has the management and the potential to overcome a sugarloaf fizzer (heaven forbid).I have traded back to ADI although only partly.

 

[nioka]

1. ADI----good choice as there are other projects which have good 'insurance potential'


3. AUT--- Not to much upside potential unless we have hit 3Trillion which (I think due to my readings of the reports) is not the case.




Conman

AUT does have some other "eggs" in the incubator and I hold AUT because of them. AUT is undervalued in my opinion. Actually I hold more AUT than ADI.

 

[Agentm]

the jump from adi to eka looks good so far Nioka. i expect adi to maintain a lead over aut, and i cant see any logic in eka going over aut's sp. keep the sp in close view, remember the cashflow is needed to develop these finds.. some have considerably more than others thus far.. ARQ has also expended their options so a another multi million dollar cash injection has also happened very quietly!

Nokia watch out for NT, they may announce things, they stopped and did a wireline without announcing any shows, and once they commence drilling they will be closer to the zones, i hope your timing is good.

ADI is definately the best pick of the 3 in my view.. they have short term upside in NT and in answer to wallave, the flow testing will take no more than 2 weeks i have heard, and from what i have heard i expect news on that very very shortly.

ADI has a habit of placing news in their quarterlies also, so expect some nice things in there also..

ADI has some great longer term prospects, yemen has a lot more to offer than appearances may portray, and i am very excited on the other prosects in the pipeline, indonesia and north africa.. there isnt much that can be said about the 3d stuff in the gulf of mexico other than the obvious.. there is plenty of oil and gas there!!

I am super confident on the secondaries in SL, i believe both the magnitude and importance of the find is beyond what anyone can understand. The reasons for my continuing to purchase the share in the past month or more is soley on the reasoning that the return on the secondaries carry more than $2 to the sp. i see little downside. I have heard a rumour real early on in the piece that one director of one of the JVP's was so happy with the secondaries they were happy to stop drilling and go ahead on the chalks right there and then..!! i didnt hear it direct but remember reading about it on a UK forum from one of the more reliable posters there!

The primary needs fracing, just about all wells in the US are fraced, so the technolgy, expertise and understanding of exactly what to do is, in my view, in the hands of experts. I dont believe that texas crude would allow any ordinary fracing program to be done here, this is a new field and the experienced specialised crews and equipment needed here will be well sourced. I cant, and nor can anyone predict the flow rates from an unfraced well, but but the primary has been considerably downgraded in estimates by the JVP's to cap off the possibility of massive fluctuations in the sp on speculation during the drill. 1.5 TCF is not unreasonable on the well, and from my understanding of it, the 1.5 tcf figure is the smallest the reserve can be for commercial flow, the JVP's downsized the reserves by 50% (to 800bcf) to keep the sp real and be very very conservative. my gut feeling is 1.5 tcf is what they are gunning for minimum.. thats entirely speculative and all IMHO..

if i had to punt on the well and guess, my money is in the area of multiple 100's bcf on the secondary.. and 1.5 tcf on the sands..

You must understand the primary is wildcat, the secondaries were known plays and all contained shows and finds.. real good shows and finds. As a wildcat, you can get away with a bit, you cant go proclaiming a discovery (like GDN) and then hope when the flow tests come in that your right. These guys dont play that game, ADI wouldnt allow it no matter what the others would want!! So it remains a wildcat well and no announcement of a discovery until after the flow testing. The numbers they had to decide to invest in flow testing had to be good, real good. There is absolutely no guessing here, If certian factors were in the equation to disallow a successful fracing and flow testing program, then it was to be called off. Permiability, porosity and all the perameters for a decision to flow test had to be met. This well was very very expensive, but there is no wild guessing and flagrant disregard foe shareholders money here, if the sl primary was dead then they were not going to flog a dead horse, they saw the numbers from the wirelines and they must have been impressed!!


i hold as always.. good luck to all.. and remember all IMHO and DYOR on this share, its getting close to crunch time, and in the US they dont have australia day holidays!! things can happen and if you ask around you may find out that a lot of JVP guys are in the USA, if you catch my drift!!

 

[Caliente]

Hi, thanks for the guidance. I've just acquired a holding in ADI prior to the long weekend.

Lets see how it pans out.

Cheers
-Cali

 

[Dums]

Agent M
Many thanks as ever for your thoughts - much appreciated.
Folks,
I had planned to increase my stake in EME today, 'unfortunately' the price spiked .. don't know why .. (but I couldn't resist buying even at the higher price) .. could be people expecting Margarita news (as results from 1st shallow well is overdue), or news re: Sugarloaf preparing for testing, could just be the market makers having some sport!
Anyhow, with 1 hour left to go to the end of trading, EME stand at 47p sell, 50p buy .. with a days gain of 12.14%. Most of the volumes being Private Investor size .. don't think the institutions are wading in just yet. 2 million shares traded so that's about a 6% turn-over ... certainly something cooking!
Let me know who things go down-under, if the driver for our rise is Sugarloaf, you may see so good gains yourself
Good luck folks

 

[fflintoff]

Folks,
I had planned to increase my stake in EME today, 'unfortunately' the price spiked .. don't know why .. (but I couldn't resist buying even at the higher price) .. could be people expecting Margarita news (as results from 1st shallow well is overdue), or news re: Sugarloaf preparing for testing, could just be the market makers having some sport!
Anyhow, with 1 hour left to go to the end of trading, EME stand at 47p sell, 50p buy .. with a days gain of 12.14%. Most of the volumes being Private Investor size .. don't think the institutions are wading in just yet. 2 million shares traded so that's about a 6% turn-over ... certainly something cooking!
Let me know who things go down-under, if the driver for our rise is Sugarloaf, you may see so good gains yourself
Good luck folks
----------------------

Is her ar se still cool?

 

[blues]

If you have a look at EKA's Quarterly Report released yesterday it says that "The well participants have approved the operator's proposed test program which is anticipated to start within two weeks."

The fun is about to begin.

Cheers.

 

[Dums]

Is her ar se still cool?[/QUOTE]

Oh no ... running hot ... that's why I married the gal !!!
Dums

 

[Agentm]

time to see how many will sell the stock down on monday..


my feeling is that now the program is fully approved by texas crude and the JVP's, the well is only a matter of weeks away from being announced as a new discovery..

i cant imagine the SP will be hammered down now, EKA's quarterly is interesting but slightly inaccurate.. i cant see them risking the primary if flows are coming in commercial as expected in the primary. I dont believe they will flow test any other zones and risk the very expensive well..

we are now in the most exciting phase of the JVP's history!!

things are happening in texas on many fronts, and in many ways..

good luck all..

 

[fflintoff]

AgentM,
The EKA report refers to testing the primary only which is correct. The context of the shallower zones in the report is within the primary only. The JV have no plans to test the Austin at the moment, if at all.
P.S. I note that EME in England got their placing away today. Deeply discounted but EME is now fully funded for the Sugarloaf campaign.