AOE - Arrow Energy

[chris1983]

A post taken from hotcopper. Looks to be the reason for the rise today.

"AGL CEO Paul Anthony said he wants to increase AGL's gas equity from its current 840PJ to 3000-4000PJ (from today's Australian Financial Review).

AGL approached Exxon and BHP to buy into the Gippsland Basin and got the cold shoulder - they dont want to sell.

So AGL's options are very much reduced. AGL is being linked to a possible bid for Arrow Energy or a merger with Santos - the latter not being possible unless the SA Government lifts the 15% shareholder cap plus can expect Santos to make defensive acquisitions to keep itself as a standalone entity.

There is a race for gas going on. Expect some of the CSG small guys are going to be snapped up very soon."

 

[Col Lector]

Gidday Chris, I'm in PES rather than AOE. But the Origin announcement mentioned may be even more significant for AOE.....
Origin Energy has just announced a 630MW gas-fired Darling Downs power station (near Braemar, west of Dalby) with pipeline adjacent the WalloonCoal Measures. Could be positive for future PES's 100% southern tenement ATP852P (near Spring gully). See Origin's ann 12/6/07

Doubt this the reason for PES current trading halt however

 

[gunditrader]

I would have thought QGC would be in the front running to benefit from any gas sales to Origin due to the 40% holding Origin have in a number of QGC fields being drilled and developed at the moment. Should come on for production at a similar time to this powerstation.

I would think the same for the AGL reserves as well due to their holding in QGC. However these two factors a positive for the whole CSG industry at the moment. Very undervalued compared to other conventional energy sectors. Especially AOE

 

[Col Lector]

you seem indisputedly certain Smurf...do you see any future for pes/& aoe falloon csg? maybe just vent it??

 

[nizar]

A post taken from hotcopper. Looks to be the reason for the rise today.

"AGL CEO Paul Anthony said he wants to increase AGL's gas equity from its current 840PJ to 3000-4000PJ (from today's Australian Financial Review).

AGL approached Exxon and BHP to buy into the Gippsland Basin and got the cold shoulder - they dont want to sell.

So AGL's options are very much reduced. AGL is being linked to a possible bid for Arrow Energy or a merger with Santos - the latter not being possible unless the SA Government lifts the 15% shareholder cap plus can expect Santos to make defensive acquisitions to keep itself as a standalone entity.

There is a race for gas going on. Expect some of the CSG small guys are going to be snapped up very soon."

Chris.
CSG guys to be snapped up soon -- Maybe MPO?

Credit Suisse notes from Tuesday [Taken from a post at SS]
Climate Change
More than just politics
■ Climate change has become a ‘hot topic’. According to the Australian Greenhouse Office, 93% of the population are aware of climate change and 86% of Australians believe that action should be taken to reduce emissions.
■ The evidence to date strongly suggests to us that the climate change is caused by increased concentration of greenhouse gasses (CO2 being the main one) resulting from human activity, mainly burning of fossil fuels and deforestation.
■ The world can do one or more of the following three things: change the way we generate energy (supply side), change the way we use energy (demand side) and adapt to climate change. All of these things have costs associated with them and it is up to each country to choose their own way to tackle the problem, based on their own cost analysis.
■ The Australian Government has decided to head down the emission targeting and carbon trading path. The cost of such a scheme to Australia will depend on emission targets; the lower the target, the higher the cost.
■ An emission target schedule has not yet been set, but we do expect that the price of energy will rise and we should start thinking about companies affected by these upcoming changes.
■ The value of companies producing most energy per unit of carbon should rise, depending on the price of carbon, in our view. Some examples of affected companies in the energy industry: gas (AGK, ORG, MPO, QGC, AOE), nuclear (PDN, ERA), wind (BBW), biofuel (ARW, NFL, ABJ) and solar.
■ We note the same impact on companies that produce energy-saving technologies such as low(er) emission cars, engines, electric motors, generators, carbon filters, LED lights, gallium, insulation products. There are very few listed plays on this theme in Australia, but there are plenty globally. Some Australian examples are CSR, BLG, CFU and SLX.
■ The cost will likely be borne mainly by households and to a lesser degree businesses. As the price of energy rises over time, energy-intensive users will be hit the hardest. At $20/ton of CO2, we estimate the cost to Australia will be around A$6bn or about 0.6% of GDP per annum.
■ This may also have some impact on inflation in the medium term, in our view. According to RBA’s model, if energy prices rise by 10% per annum over the next five years, the headline inflation would rise by 0.5%. Would believe that there would be some pass through to core CPI and potential implication on rates.

 

[chris1983]

Yeah MPO look good dude. Im just annoyed I didnt take my own advice and buy in when I saw the BHP guy take control of the company. That cost me some serious cash. I cant complain though..this year and last year has been good.

 

[gunditrader]

you seem indisputedly certain Smurf...do you see any future for pes/& aoe falloon csg? maybe just vent it??

Col

I think QGC are in the best position locally in southeast qld. For the follwoing reasons:
- They are conveniently associated with two of the biggest electricity generators. ORG & AGK
- They also have the lowest cost base on CSG producers through the highest flow rates and hence lesat wells per unit of gas production.

AOE/PES
The upside for AOE lies internationally. I think talk of an LNG exports from Mackay? is very positive for AOE and PES. At 55PJ per annum (i have no idea of Capex and operating costs for an LNG train however I think margins are extremely high) at a price of $3m per PJ this gives revenue in the order of $150m. There is however talk of potentially doubling this to 110PJ year, doubling revenue. This adds up to potentially 150PJ a year of gas sales including domestic sales with prices unlikely to go lower equates to around 450-500m revenue.

PES with gas fields in Tassie and the Basslink electricity line going in is also a positive. Potential gas sales to the mainland as well.

CSG on the whole.
- Low cost low life fields.
- Carbon benefits of gas???
- Potential price rises???
- Huge reserves.

I would appreciate any commentary on this. I am just an average investor, far from an expert.
Holding QGC, PES

 

[Col Lector]

Greetings Gunditrader...forgive my addressing you as Smurf...positive PES announcement today (congrats). It underlines that tenement 852 is seen as an important play. But also that the Tipton West project...(AOE & BPT in partnership and PES now holding Comet's royalty stream) is the focus of AOE's southern tenement production. This is targetted at the growing SE Qld/Brisbane mkt & is likely to be targetted for significant expansion given the players involved and expected economic growth in this region.

 

[chris1983]

Arrow just touched 2.97 and is 1 cent from its previous high of 2.98. There is a lot of resistance there to the 3 dollar mark so it will be interesting to see how it goes for the rest of the day. Its up on low volume atm. Would like to see an update on the Indian projects but in regards to SP arrow is performing well.

 

[chops_a_must]

Arrow just touched 2.97 and is 1 cent from its previous high of 2.98. There is a lot of resistance there to the 3 dollar mark so it will be interesting to see how it goes for the rest of the day. Its up on low volume atm. Would like to see an update on the Indian projects but in regards to SP arrow is performing well.

Chomp.

Nothing wrong with the volume now. Sellers are few and far between. Looks to be breaking out... again...

By the way, maybe one of the mods is Goblin, lol! As to why your posts have been deleted.

Don't really know why they were... I've never really had a problem with anything you've said... even though we've had some pretty in depth debates. And the forecasts you look to have said, appear no different to what I had already said.

Anyway, AOE looking good again. Breakout time IMO.

 

[chris1983]

Chomp.

Nothing wrong with the volume now. Sellers are few and far between. Looks to be breaking out... again...

By the way, maybe one of the mods is Goblin, lol! As to why your posts have been deleted.

Don't really know why they were... I've never really had a problem with anything you've said... even though we've had some pretty in depth debates. And the forecasts you look to have said, appear no different to what I had already said.

Anyway, AOE looking good again. Breakout time IMO.

It wasn't Gobs It doesn't matter anyway. Arrow have finally broken the 3 dollar barrier as I said they could earlier..It was only a matter of time IMO. Lets see if they can hold the mark now. Some sellers have been coming in and taking profits. I also think it could be a breakout Chops..have to wait and see.

 

[SGB]

Things are still looking promising as it cruised through 3.00 without much resistance.
One thing that does come to mind through is the ease it broke 3.00 wiothout much volumn.
SGB

 

[chris1983]

Arrow is starting to run now also..this is a crazy day..Arrow is just continuing to trend up but it has touched another all time high. Looking real good. Volume is good too.

 

[chris1983]

Arrow closed down today. Some large trades went through on the close. There were some huge trades going through today. On the open 1,420,490 shares exchanged hands which is valued at $4,304,085. Then in the middle of the days trading another huge trade went through. This was a single trade for 758,386 shares at $3.03. Thats worth $2,297,910. Very interesting.

 

[chris1983]

Arrow closed down today. Some large trades went through on the close. There were some huge trades going through today. On the open 1,420,490 shares exchanged hands which is valued at $4,304,085. Then in the middle of the days trading another huge trade went through. This was a single trade for 758,386 shares at $3.03. Thats worth $2,297,910. Very interesting.

Hmm maybe something is up? SP is powering on decent volume now..touched another 52 week high at 3.17.

 

[SGB]

Plenty of attention being forwarded to Arrow this morning. Interesting to see what it finishes on this arvo , taking into consideration the early long ranges.

SGB

 

[chris1983]

I just looked at the trades that went through and there weren't many huge sellers in there if there were any at all. I own more shares than most of the trades that went through so atleast thats a good sign because I dont think any huge holders were selling down. Definately has dropped back off its highs but I think it might be good for it. There hasn't been any updates on international projects and I think a good announcement from this area will definately get her moving again.

 

[SGB]

I just looked at the trades that went through and there weren't many huge sellers in there if there were any at all. I own more shares than most of the trades that went through so atleast thats a good sign because I dont think any huge holders were selling down. Definately has dropped back off its highs but I think it might be good for it. There hasn't been any updates on international projects and I think a good announcement from this area will definately get her moving again.

Tend to agree Chris

Just browsed course of sales myself and there was only (1) 30000 and a couple of 20000,s. Apart from that it wasn't that big.
As a techy i would prefer to be over the Pysch 3.00 mark though.
cheers
SGB

 

[chris1983]

Tend to agree Chris

Just browsed course of sales myself and there was only (1) 30000 and a couple of 20000,s. Apart from that it wasn't that big.
As a techy i would prefer to be over the Pysch 3.00 mark though.
cheers
SGB

I doubled up on my holdings. Was buying yesterday and added to my holding yet again today. I'm looking for a bounce. Got in at 2.65 today and 2.76 yesterday. Hopefully its hit bottom? I think it was a good short term trade. Strong action and great support through out the day after hitting a low of 2.60. Closed on its high for the day. I'm expecting the action to continue tomorrow if we can get a decent days trading on the DOW overnight.

QGC now have a market cap greater than 2.2 billion and Arrow is currently at 1.57 billion. Big difference there now and at one stage only a couple of months ago Arrow had overtaken QGC in regards to their market capitalisation. I believe AOE has world class international projects that QGC don't have. I'm not bagging QGC I just think AOE has further to run. These two companies have always had very similar MC's but in recent times QGC has pulled away from Arrow. If Arrow were to get anywhere near the Market cap of QGC atm they would have a SP of around 4 dollars.

Good luck Arrow holders.

 

[jman2007]

Yep, agree with u Chris, Arrow has plenty of upside considering the International exposure it is generating. Probably some decent buying for the astute trader to be had over the last few days from the recent glut of profit-taking we have seen. I got in at $1.56 a few months back so obviously delighted with the run so far, I'm more thinking along the lines of it pausing for breath after the meteoric rise we have seen!

Definitely one to keep in your portfolio for the long-run.