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AED - AED Oil

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Bell Potter gave a buy on this share today, they did admit it was speculative but thought it had been oversold. They thought it may be worth as high as $9.82 once problems had been sorted out.
 
What the heck is going on with this share? I am in Europe - woke up this morning expecting to see the SP at around $4.50 or worse and rubbing the sleep from my eyes I see we are up 6%. It would seem that AED has been oversold despite doom and gloom predictions. My guess is that institutions started getting back into this today fearful of being left behind as the SP regains its strength.

I was about to place my last sell order but will hang in here for a little longer. For me the big question is "Is AED a one trick pony or not?".
 
What a ride, the haemorrhaging appears to have been stemmed for the moment. I have never seen a share in my portfolio that far in the red, recover back into positive territory by the arvo. Obviously the smart money thinks that the stock is in oversold territory. I have attached the 2 broker upgrades and comments courtesy of the FN Arena database today


Cheers


BT


Broker Date Rating Recommendation Target Price % to Reach Target

UBS 22-Nov-07 1 Buy $9.82 58.6%

The broker revised downwards FY07 December quarter production forecast to 14,000 barrels of oil per day (bopd) from 20,000 bopd after the company confirmed oil production at Puffin Main will be below expectations during commissioning. Other reasons are ongoing topside issues and riskier outlook for reserves at Puffin SW resulting in a cut in its target price to $9.82 from $10.19. At the same time, the broker has maintained the buy rating because it believes the stock looks very cheap and has potential for increases to production once fully commissioned. However, it has stressed the speculative nature of the shares.

Deutsche Bank 22-Nov-07 1 Buy $12.15 96.3%

Target $12.15 (was $13.35). The company has announced some production is being deferred due to technical issues, the broker noting it has not been lost but will impact on sentiment in the short-term. It sees the stock as oversold at current levels so it retains its Buy rating.
 
And you wonder why those that sold may regret their decision one of the most important part of the announcement that went unnoticed $9Mcost per month now even if they only produce 20000boopd do the sums at 160m shares on issue and see what dividends/capital returns could be on offer

cheers laurie
 

Indeed I think we're all looking at the bad side, and I bet its just what the Institutions want us to think.

I still think that the only things that will endanger the SP are 3 factors:

1. Continued technical issues with excessive water, decreasing production;
2. Down grade of reserves and bullish over estimations of recoverability;
3. The continuation of the CEO wearing golf hats to AGMs; Hahahaaaa
 
Is there a total loss of interest in discussing the stock now or has everyone been concentrated on elections?!

It would seem we are in limbo with the SP until we receive some further good (or bad) news. Do we have any indication when we can expect any more news?
 
wow. This stock has gone from +$11, to $5 today in a couple of weeks. Does anyone think this one is worth buying now?
 
More bad - though expected - news for AED today.

The suspension of the Puffin-10 well.
SP has taken another battering. Down 60c since the ANN.
 
AED is not looking good now. SW is looking in doubt, abandoned the well which originally had 40 million barrels estimates.

Will there be more bad news for these guys? It seems the bad news does not actually stop!

Disc: No longer hold AED, I sold up closer to $10 when problems first emerged.
 
Is this now oversold? My amateur valuation is as follows.

Say worst case (famous last words) production remains at current levels at10,000 bopd. Margin of AU$40 per barrel (is this conservative?) works out to $145 mill per annum. 117million shares on issue so $1.23 EPS or at SP $4.50P/E of 3.7!!

not sure what "verified" reserves they have (anyone know?) but at 10,000 bopd thats only 3.6 million a year so if they have 40 million in reserves seems cheap to me.

Also if they have abandoned Puffin 10 are they spending any of their capital on anything else?

I admit i got little idea about valuing these things so comments from those with more experience appreciated. It's now on my watchlist.
 
OMG

AED is now the biggest stuff up in investing I have ever made!
I cant believe how badly this company has gone in the last few weeks.
I feel sorry for anyone who followed their brokers reccomendation acouple of weeks back to "buy"!

Guess this company will go to the back drawer for me now. Might take it off my watchlist too to prevent anymore mild depression or heart murmurs..lol.
 

Thats assuming there is no more downgrades and their reserves valuations hold up. I dont think the market believes much that is coming from mgt now.
 
Will drop out of the ASX 200 no doubt!!!!!!!!!!!

Terrible day and past two weeks for all shareholders.

AED $4.48 -$1.12 -20.00% high of $5.83 and low $4.47 2,563,012 shares $12,719,879 @ 28-Nov 16:10:56

Top 20 of Whole Market and AED is number 11 today of biggest falls
Rises: 420 Falls: 684 Steadies: 769 Nov 28, 2007 4:20:02 PM

11 - AED ▼ -20.00% .. -$1.120 .. $4.480 .. AED OIL LTD ▼
 
This dam share has caused me nothing but headaches.

I cant believe it fell so much in a short amount of time. In less than a month it's reduced to half its value.

I got no idea what is going to save them, but I hope something does.

They should just announce they've found iron ore in their wells or something.
 
I am going to dead. I dont know if there are more bad news ahead. Anyone has any idea about when the next announcement will come?
I am really worried this stock will go below the current price.
 
I thought I was being overly cautious when I sold out at exactly $10 -for once I did the right thing - It is a real shame that AED is gettting punished - it will still make a good yearly profit - the market has clearly over-reacted!
 
imajica said:
I thought I was being overly cautious when I sold out at exactly $10 -for once I did the right thing - It is a real shame that AED is gettting punished - it will still make a good yearly profit - the market has clearly over-reacted!
Click to expand...

Want to know imajica who got a better sell price than you? Look at the Appendix 3y that was posted earlier this month by David Dix.
Sold more than 56,000 shares at $11.29 now tell me he didn't know what was about to happen! I know it is only a small amount of his holding but it sure goes a long way to filling the belly between drinks!
 
kevien said:
I am going to dead. I dont know if there are more bad news ahead. Anyone has any idea about when the next announcement will come?
I am really worried this stock will go below the current price.
Click to expand...

I believe they said they would make weekly announcements for the SW, but with the development now on hold, then I would think the next news would be for the offtake closer to the end of this month, or next month sometime if their track record for 'keeping to schedules' are anything to go by.

Apart from that it looks like end of first quarter, half year next year that any good news (if any) will be released....

I personally think this is over-sold, and indeed I know a few brokers are 'suggesting' the same thing. Just when you think this can't get any worse........

Comments?!

As suggested by FED23, perhaps they should announce they've struck Iron Ore, or better still reserves of 100mill oz of GOLD...

I'm changing my Avatar or I might be spat on...
 
Got this from my stock broker.. which I should kill for taking his advice

The fact that they are trading at this price is inexplicable, and more highlights the fact that the market is extremely volatile (the most volatile in history), and nervous.

The company is producing oil at 10000 barrels a day, which is roughly $1million a day. This is unquestionable. That would be $365 million a year. For a company that is now worth $700 million.

Assuming no further exploration success anywhere else in the future, it would still be the cheapest oil stock on the market.



We got in contact with one of the director's today. And they have every intention of getting the current production well at Puffin NE up to 30000 barrels a day by late next year. This was what they orignally targetted, and would put annual revenue at close to $1 billion.


The people selling in the market are scared of the volatility, scared of the falling share price, and of the unknown.

The 3 major factors effecting the price are :


* general global market nervousness.
* delays in getting to 30000 barrels a day from this first well.
* Puffin SW where there was to be another production well commencing Q1 next year.


Puffin SW was previously thought to have another 40million barrels of recoverable oil. The market by selling it down to these prices is saying there isn't any there at all. That oil just doesn't disappear. They have said that it is 'geologically more complex then first thought'. The director said that they will produce from there, it is only a question of time and testing.

What we do know for sure is that 2 adjacent wells to Puffin SW, woodlea and puffin 9 have already proven 18 million barrels of oil. They will produce in time.

Its during these hard times which really test your conviction about your research. But let me say that UBS Warburg, the big investment bank has bought 5 million shares in the past 2 weeks. And UBS and Deutsche bank both maintain buy recommendations on the stock with $9.80 and $12.15 price targets on the stock. And they only reevaluated this last week.
 
Fed23 said:
The company is producing oil at 10000 barrels a day, which is roughly $1million a day. This is unquestionable. That would be $365 million a year. For a company that is now worth $700 million.
Click to expand...
It all depends at what oil price (or conversely flow rates) the field was modelled to be commercial to. Your first step would be to subtract the lease on Front Puffin (about $190k a day from memory). Then there is staff, other leased equipment, overheads, production taxes, depreciation/amortisation on capex related to the wells, NWE's royalty etc etc.

The next thing to consider is if they've already committed to additional FPSO's for other parts of the field that are now more doubtful and so on...
 
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