Nioka, regarding EME they are a new company only listing last year, they currently have 3 projects ongoing, Glantal in Germany which after initial 4 drills proved no commercial gas and was plugged and abandoned, potential was up to 6.3tcf of gas they are currently looking at other targets on the area but nothing stated as yet, that failure caused a fall in the SP from about 90p to at one point 30p, speculation on Eagle and Sugarloaf now has the price at 63.5p as at last night.
You know as much as I do about Sugarloaf so no point going into further detail but I am confident about buying Adelphi because of Sugarloaf, will come back to that in a moment. Regarding Eagle in California EME have a 38.5% stake in this field which had 34M barrels and flowed 533 barrels in 1986 from the original well, they know there is oil there and the partners seem determined to get it out, they started in Feb 06 drilling and they proved the field but could not get it to flow because of running sand, I am not technical but they had to acquire a work over rig which only arrived 3 weeks ago, they are now retrieving the perforation guns which failed to fire initially and will re enter with coiled tubing , perforate and hopefully will flow, basically they have had to clean out the hole from the previous crap and start the final phase again, they estimate 1000 barrels a day I would not be surprised to see 1500 to 2000 a day and this will be a company maker for EME. VPE of Australia are the operator and are not crisp like Texas Crude,they probably do not have the pulling power of Texas and hence the delays. EME share price hit 160p in March this year on Eagle and will go to 200p if it succeeds and then we have Sugarloaf and Glantal on top.
Agentm, sorry you felt you were not welcome on the iii board in UK, like anywhere there are some idiots, ignore them most of us serious investors in UK are ok and welcome yourselves and others opinion. I did not buy on Friday as I was too late when I rang for my broker to contact theirs in Aussie, I will buy Monday morning, I have a couple of points, you say Adelphi share price would only increase by 0.60c on lower levels but up to $6 Aus on Hosston, don't quite follow that on confirmation I would have thought it should go up significantly on commercial at lower levels, has Adelphi got rights at all levels.
I post below 2 analogies perhaps you or others could comment, I will only buy Adelphi or Eureka not both, thoughts, really interested in your valuation bearing in mind the commerciality initially at the lower levels, I know it is not certain yet but if it is 60c seems very low
market caps (undiluted)
Adelphi (20%interest) A$42m
Aurora (20% interest) A$62m
Eureka(12.5% interest) A$8m
x 0.40 for GBP mkt caps
for mine EKA is the best risk/reward play, could be a 30 or 40 bagger with 10-15% likelihood, that is a good bet. And with some downside insurance with very promising shallow targets.
Sage talks a good game but he should know that there is a 10-15% chance of success on the primary target. The market caps of the Australian players do not yet reflect this probability, nor the likelihood that the shallow secondary targets may already be economic. It would be awful to see him get burned shorting EME should there be a mere hint of hydrocarbons in the Sligo zone with Hosson to come. The real pressure is on the shorters because while probabilities favour them, the upside to Sugarloaf is enormous.
3250stewart,
Broker report ( May )gives highest leverage to ADI at 2599% & then EKA at 1347%.
Note permit area is described as below 2000m with upside of 4Tcf.
--------------------------------------------------------
Adelphi Energy Steps Up at SugarLoaf (ADI)
Adelphi has boosted its interest in the upcoming Sugarloaf exploration play to
20%, for which it will pay 25% of drilling costs. Sugarloaf is a deep gas play
targeting a mean 800Bcf of gas, with upside to 4Tcf at a depth below 5,200
metres in this 60-80km² prospect. Drilling is planned to commence in July, with
results known by early September.
Scout information from discoveries in the region indicates a possibility for gas and oil in shallow zones below 2,000m, extending into the Sugarloaf permit area, offering the potential for a secondary, shallow oil/gas play. With this information, Adelphi has gained 20% of both the shallow and deeper petroleum rights. This new shallow play,gives the Sugarloaf well multiple chances of success. If there is no deep gas, a small oil or gas accumulation would at least pay back the cost of a well.
Discovery of 800Bcf of gas and 10mmbbls of oil at Sugarloaf would be worth over $7 per share to Adelphi on a fully diluted basis. StockAnalysis ascribes a risk adjusted target valuation to the company of $1.23, based on its interests in Yemen, Sugarloaf and New Taiton, which is to be drilled later this year and where discovery of 40 bcf would be worth 45cps for Adelphi, leaving plenty of room for upward movement in share price, prior to spudding of the well, scheduled for July this year.
Of the three Australian partners in Sugarloaf, Adelphi offers the best leverage to success, with newcomer and Peter Allchurch vehicle, Eureka Mining making its first appearance on the US oil & gas scene.
Adelphi is recommended as a speculative buy with a short term target of 33 cents
and a medium term target price target of 55 cents
Sugarloaf Valuation Matrix
Company
Equity
WI
Current
Price cts
Discovery
Value cps
Leverage %
Risk adj
Value
cps
ADI 20.0% 27.5 715 2599% 89
AUT 20.0% 57.0 394 692% 49
EKA 12.5% 35.0 471 1347% 59
Target 800 Bcf
10 mmbbls
Value $ 3.6 A$/Mcf
$ 25.0 A$/bbl
Prob 12.5%
All IMHO, DYOR. Would like some responses before Monday to then make a decision on quantity of Adelphi or Eureka, at present favour Adelphi but happy to be convinced either way, thanks all