AUT - Aurora Oil and Gas

IPANEMA AND LONGHORN AMI PRODUCTION & OPERATIONS UPDATE
Aurora Oil & Gas Limited (“Aurora”) is pleased to provide the following update on operations and production at the Ipanema and Longhorn Areas of Mutual Interest (“AMI”) within the Eagle Ford Shale Sugarkane Gas & Condensate Field, Texas.
Longhorn AMI (AUT 31.9% Working Interest)
Turnbull #4H (25% WI+)
The Turnbull #4H well has now been producing for 30 days and the following production rates have been achieved.
Total Gas Production (mmscf)
Total Condensate Production (bbls)
Average Daily Equivalent Gas Rate (mmscfe/d)*
Average Daily Equivalent Oil Rate (boe/d)*
Turnbull #4H
69
30,168
14.93
1,244
*The equivalent rates have been calculated to reflect value using a 12:1 conversion ratio for condensate and a 25% uplift on gas equivalent volumes due to the high calorific value of the produced gas.
This well continues to be produced with a limited choke setting. Aurora will provide the market with a further update once data from the first 60 days of production is available.
Sienkiewicz #1H (25% WI+)
The fracture stimulation of the Sienkiewicz #1H is complete with 19 stages having been pumped and this well is presently cleaning up to sales.
Yosko #1H (31.9% WI)
The Yosko #1H well drilled and cased with a total depth of 17,366 ft. This well will be fracture stimulated in due course.
Barboza #1H (32.9% WI)
The Barboza #1H well has spudded and this well is presently at a depth of 4,057ft having run and cemented surface casing. This well straddles the Longhorn and Ipanema AMIs and as a result Aurora holds a blended working interest of 32.9%, this figure is subject to final confirmation by the Operator.
Ipanema AMI (AUT 36.4% Working Interest)
Franke #1H (30% WI+)
The Franke #1H well has now been on production for 30 days and the following production rates have been achieved in that time. This well has a relatively short horizontal section with a total depth of only 15,184ft. The well is being produced with a minimal choke setting and the data below is the average production over the first 30 days.
Total Gas Production (mmscf)
Total Condensate Production (bbls)
Average Daily Equivalent Gas Rate (mmscfe/d)*
Average Daily Equivalent Oil Rate (boe/d)*
Franke #1H
54
14,879
8.20
683
*The equivalent rates have been calculated to reflect value using a 12:1 conversion ratio for condensate and a 25% uplift on gas equivalent volumes due to the high calorific value of the produced gas.
Aurora will provide the market with a further update once data from the first 60 days of production is available.
Foster Unit (WI – 36.4%)
The Foster #1H well, situated in the Ipanema AMI, is presently at a depth of 15,432 ft and is drilling horizontally within the Eagle Ford shale.

Just digging back through some earlier reports and those declines for Franke and T4 are very impressive.

To my knowledge we didnt get a true raw IP, but our earliest IP reported was 1260 and 690. With tiny declines to 1244 and 683.

Those declines are staggeringly good. Be interesting to see what the 60 and 90 days are, but thats impressive.

Unfortunately this sort of news though makes AUT a massive TO Target. Why? Because who else can you buy out whos getting such rediculously good flow rates and declines time after time, with soooo much growth potential still available and not priced in and with an operator in place achieving such a fantastic success rate.

Condog i take it that this announcment is a great resuly for AUT?

Well it did hit $3 at one point this morning!

GMP Securities AUT 12-month target price $3.85, reported on 25/01/2011

http://www.auroraoag.com.au/IRM/Company/ShowPage.aspx?CPID=1469&EID=32398156&PageName=GMP Securities

Magic Man said:

Condog i take it that this announcment is a great resuly for AUT?

Click to expand...

One great flow, and one ok flow. so all in all a good announcement and many more to come!

new euroz out today also but same price $3.60, see you there in about 3-5 weeks

4 rigs now also with a further 2 dew apparently in the coming few months.

Closed today at $3

Courtesy of a friend on here GMP have started issueing a BUY on AUT with a target of $3.85

Initiating Coverage: Significant Upside In Low
Risk Eagle Ford Development

We are initiating coverage this morning on Aurora Oil and Gas Ltd with a BUY
recommendation and $3.85 target price. We are providing an overview of our
investment thesis with this comment and are also publishing a more detailed report
later today.

High leverage to oil prices with 80% of the firm?s projected revenues
being generated by oil, condensate and NGL?s.

Well positioned financially with ~$90 million in cash to fund an active
2011 capital program.

Expected to list on the Toronto Stock Exchange in February 2011

Low risk development with significant upside potential. AUT currently
has production and is developing a known field.

AUT is the only ?pure play? smaller cap producer in the ?sweet spot?,
giving investors significant leverage to the upside potential.

We estimate that the Company has the inventory to grow its net share
of production to 29,000 boe/d by 2017.

Very good upside potential beyond the current reserve report bookings.

We are initiating coverage of AUT Oil and Gas Ltd (ASX-AUT) with a
BUY recommendation and a 12-month target price of A$3.85 which
implies a potential return of 40% from the recent share price.



BUY recommendation and A$3.85 target price

We are initiating coverage of Aurora Oil & Gas Ltd (AUT-ASX) with a BUY recommendation and a 12-
month target price of A$3.85 which implies a potential return of 40% from the recent share price. AUT
recently completed a US$120 million acquisition to increase its working interest in three AMI?s plus the
addition of interest in a fourth AMI in the Sugarkane Field in the heart of the what we believe is the
?over pressured? sweet spot within the Eagle Ford shale play in southeast Texas. Post the acquisition
AUT now has exposure to ~900 (192 net) low risk, high netback, locations within the condensate and oil
windows of the Eagle Ford play based on 80 acre spacing. Recent well results are proving to be better
than the type curves which supports our positive outlook on the field development plans over the next
few years and the subsequent upside we see in the valuation. On the basis of the Independent
Reserves Report by Netherland Sewell & Associates, AUT now has the inventory to grow its net share
of production to 29,000 boe/d by 2017. AUT is the only smaller cap ?pure play? producer in the ?sweet
spot?, giving investors significant leverage to the upside potential.

Then from another friend , issued by Euroz today.

Price Target: $3.60/sh
Reason For Update: Operations Update

What We Know: AUT has released updated production data from the Longhorn and Ipanama AMIs.
Turnbull-4H (Longhorn - 25% WI) production to 30-days totalled 30.1kbbls and 69mmscf on highly restricted choke.
The well has exhibited negligible decline from the reported initial 10-day average: 1260boe/d (10 day av.) to 1244boe/d (30 day av.)
Franke-1H (Ipanema - 30% WI) produced 14.9kbbls and 54mmscf over 30 days.
Decline rate from the 10day (683boepd) to 30 day (796boepd) average was 14%.
These results follow recent Sugarloaf AMI 30 day results from Urrutia-1H (19.4kbbls & 53mmscf) and Kowalik-1R (16.1kbbls & 50mmscf).
Urrutia and Kowalik exhibited 13% and 4% declines from the first 10 to 30 day averages.
Similarly, 60 day production results from Luna-1H (39.5kbbls & 120mmscf) and May-1H (32.7kbbls & 115mmscf) showed arrested declines from the 30 to 60 day averages.
Luna’s 60 (866boepd) to 30 day av. (931boepd) implied a 7% decline, whilst Kowalik (745boepd vs. 760boepd) showed a 2% decline.
Sienkiewicz-1H (Longhorn - 25% WI) and Direct Assets-1H (Sugarloaf – 10% WI) are cleaning up to sales.
Yosko-1H (Longhorn - 31.9% WI), Barboza-1H (32.9%), Foster Unit (Ipanema – 36.4%) and Gilley-1H (Sugarloaf – 10%) are undergoing drilling and completions.
Two new rigs have commenced in the field (4 total); we expect addition of at least a further two over the next few months.
60 wells are planned for the CY: ~30x Longhorn (AUT – 31.9%); ~20x Excelsior (9.1%); ~7x Sugarloaf (15.7%) and ~3x Ipanema (36.4%).
AUT will list on the TSX in Feb.
What We Think:AUT’s latest results continue to track ahead of our 15% risked Sugarkane Field ‘type-curve’: Continued strong results will warrant removal of our risk factor.
The low to negligible decline rates clearly benefit from the premium reservoir characteristics of AUT Sugarkane Field interests, noting that tubing head pressures remain exceptionally high.
Implied revenues at current spot prices continues to strengthen expectations of circa 6mnth pay-back at current commodity prices.
Additionally, strength of the production data bodes well for the revised reserves statement in the Mar Q.
With around 2.5x more wells on production at Dec 31 (vs Jun 30 for the July statement), we anticipate a 2P to be in the range of 25-35mmboe.
With the CY’11 drilling programme designed to hold a majority of AUT’s participating acreage, we foresee a majority of current 3P 84mmboe reserves shifting to 2P category in a year’s time.
Furthermore, tighter development well spacing (vertically and horizontally), continued out-performance vs. the Netherland&Sewell type-curve, and higher EURs encourages us to see significant upside to 3P reserves can be realized over the next few years.
Importantly, with over 70 wells on production by Dec 31, 1P reserves could exceed 40mmboe cum-Feb’12 reserves release.
This augers well for AUT to achieve net share production of +2.5kboe/d by mid-CY’11 and exit the CY at 5kboe/d.
A US$100/bbl oil price long-term from CY’12 provides for a $3.60/sh.
We highlight the leverage AUT offers to rising oil prices; applying US$120/bbl long-term underpins a $4.40/sh valuation.
Additionally, with commissioning of the new wet-gas pipeline, revenue streams will be boosted by LPG revenues.
Investment Case:
The latest operational results continue to build on the quality argument for AUT’s Sugarkane Field interests: Results continue to track ahead of our forecasts. The results build upon a highly accretive acquisition that will result in a 50% increase to AUT’s current acreage position in the field.
Forthcoming reserves statements in the Mar Q will consolidate the value potential on an EV:2P reserve basis. Beyond which growing production - +5000boep/d end CY’11 increasing to a peak of +20kboe/d by CY’17 – makes for a compelling investment proposition.
Buy with a valuation of $3.60/sh, noting significant upside that can crystallize from oil price momentum, incorporation of LPG revenues and continued production out-performance.

I can't stand it, surely $3.00 is worth some of these.

:bananasmi:bananasmi:bananasmi:bananasmi:bananasmi:bananasmi:bananasmi


Normally Condog leads the charge but he's obviously been busy.
Enjoy everyone.

sorry guys all new to this...this euroz valuation where can it be found? do u have to be a member with euroz to access?

TIA

ibows1 said:

sorry guys all new to this...this euroz valuation where can it be found? do u have to be a member with euroz to access?

TIA

Click to expand...

Ring emmmm is best.

They wont give you free reports unless you gunna spend money with them some where though. Most of it winds up in here in a nice timely manner so i wouldnt stress.

Assasin said:

I can't stand it, surely $3.00 is worth some of these.

:bananasmi:bananasmi:bananasmi:bananasmi:bananasmi:bananasmi:bananasmi


Normally Condog leads the charge but he's obviously been busy.
Enjoy everyone.

Click to expand...

Yep its probably a bannanas day for sure. Glad to see you unveiling them.

Plenty to be excited about. When you consider the phenominal PE some other energy players are currently operating on its worth doing some sums on bigger PE's to see the potential.

condog said:

Yep its probably a bannanas day for sure. Glad to see you unveiling them.

Plenty to be excited about. When you consider the phenominal PE some other energy players are currently operating on its worth doing some sums on bigger PE's to see the potential.

Click to expand...

Condog, im doing some valuations and i just wanted to ask what PE ratio are you using and how did you work out the EPS, as we have'nt had any cash flow to work out an EPS as yet.

Stochastic 3 day SMA is sitting at around 90%, Twiggs Money Flow is strong, Volume rising, whats next?

I see a very small retrace to around $2.95 then another run to $3.25 by mid Feb. Or maybe we wont see a retrace at all??

Thats just what my amateur eyes see anyway

Looking forward to the next big ANN.

P.S. That $3.85 valuation seems pretty conservative.. I think we will be around that figure late July.

Trader i use a spread sheet where i have the flows and projected flows for each well. I multiply it out using the oil price *70%, i use 40% tax and royalties and then multiply it by a WI for each well. On the projected future wells i use an average flow and average working interest.

I use a 14PE. The sector average is 26.

See page 17 and 18 of this AUT thread for examples of my much earlier spreadsheets. Ive refined them a lot since then and imo i have them a lot more accurate now. When i look back no they look pretty rough to me.

condog said:

Trader i use a spread sheet where i have the flows and projected flows for each well. I multiply it out using the oil price *70%, i use 40% tax and royalties and then multiply it by a WI for each well. On the projected future wells i use an average flow and average working interest.

I use a 14PE. The sector average is 26.

See page 17 and 18 of this AUT thread for examples of my much earlier spreadsheets. Ive refined them a lot since then and imo i have them a lot more accurate now. When i look back no they look pretty rough to me.

Click to expand...

Cheers condog.

New Well application lodged. Turnbull 6H

If there's four rigs on site the pace of drilling is going to catch up with thise approved wells pretty quickly. Should start seeing more apps being lodged in the next two weeks.

Quarterly announcment out tommorrow. Should make for good reading.

Where do you find information about the applications condog?