AUT - Aurora Oil and Gas

[geelongfan]

AUT took a swift kick in the gonads today (5.7% drop).. most jr explorers and some mid tiers took a hit also today

 

[donteatme]

Yesterday was a spectacular day for AUT, I can't find anything that would warrant such an increase. The close today is still a little bit higher than the close on Tuesday, so I still see it as progress

 

[geelongfan]

indeed. i guess we will all know where we sit after the announcements in a few weeks

 

[BrightGreenGlow]

Yesterday was a spectacular day for AUT, I can't find anything that would warrant such an increase. The close today is still a little bit higher than the close on Tuesday, so I still see it as progress

Greedy buyer will always attract nervous sellers. I see it from a week by week development. Today was expected... if it didn't happen it would have been very unusual.

 

[Sdajii]

Condog (or anyone else): I'd also like to know exactly what is meant by the close well 'communicating'. Does this mean the wells were noticeably affected in some practical way, or is it just some subsonic testing equipment or something which shows a reading? Or something totally different?

I really hope we get a finer well spacing, it would really increase our reserves dramatically. 80 to 60 acres would be the equivalent of increasing our total acreage by 33%, wouldn't it? With no extra land expenses? 40 acre spacing would increase our effective land by 100%? Unlikely, I know.

Maybe we got a kick in the nuts today, but that's okay, we earned a cup yesterday. Today's kick knocked the cup off though, so if we get kicked in the nuts again tomorrow it's actually going to hurt! :

I we get a nice reserves upgrade and finer well spacing, gee, it's going to be nice to holding! Not that it isn't already!

 

[majorca]

Sdajii,
I was undertsanding it as cross contamination ie either the fracturing ? from fluids? or it affects the pressure? I dont really know so that was why I was asking the heir apparent or possibly the horses head in this instance? some of us don't know as much so generally are busy reading and following links posted. Being an ex Adi investor though and the only thing I have ever got right in that respect was topping up on them at 4.8c you would think something would have worn off but no it appear pure fluke. I would be interested in a slow answer I am going to take a while to absorb it!

 

[condog]

Communication between wells means the fracs, create spaces in the geology that allow the pressures in one well to affect the pressures in anither well.

IF you can imageine it like two bottles of coke shaken up. ideally you take the cap of one and get it to flow oil/condensate for years. You take the lid of the other and get it to do the same.

But when communication occurs its like having a hose running between the two bottles. So when you cap the second one youve already lost pressure as when you fracced the pressure was lost to the other well.

It can effecteively reduce the EUR( estimated ultimate recovery) per well. Especially int he case of wells containing fluids, as we rely on high pressures to lift the fluids to the surface.

hope that helps

 

[mir]

this may help with the well spacing debate & well 'communicating' issue, for what it's worth i was told yesterday (by people that know) they believe the well spacing will end up much tighter than 40 acres per well (possibly 20 to 30 acres) & are talking multiples of our reserves, also due to the reduced declines. so i don't see the 'communicating' being a problem .

 

[condog]

this may help with the well spacing debate & well 'communicating' issue, for what it's worth i was told yesterday (by people that know) they believe the well spacing will end up much tighter than 40 acres per well (possibly 20 to 30 acres) & are talking multiples of our reserves, also due to the reduced declines. so i don't see the 'communicating' being a problem .

There is no doubt thats possible, but till they try it, imo we really dont know. The geology of every single well will be different and whilst some areas might allow 20 acre spacing others might be 40 or 50. They really wont know imo till they trial it. I think most think 40 acres is possible, but imo in some areas that will be fine in others it could be an issue. Its unlikely 50-60 will cause any problems imo. But thats speculation.

 

[WRONG'UN]

Let's try to get another handle on this.
The horizontal legs of these wells are about 1 mile long, that's 1760 yards.
There are 4840 square yards in an acre.
So, for wells at 80 acre spacings, the distance between the horizontal legs must be 80 x 4840 / 1760 = 220 yards.
This means that for adjacent wells to "communicate", the influence zones of the fracking will have to extend 110 yards out from each well. And at 40 acre spacings, the zones would have to extend 55 yards out. Is this likely? Well, as already stated, we won't know until somebody tries it, and every well is different anyway. At about $7m per well, I'd say they won't be trying it until they are raking in the money from the 80 acre wells.

 

[Sdajii]

Condog: I was sure that was the principle behind well spacing, but I wondered exactly what the 'communication' was. Was there a measurable drop in pressure/flow rats in the first well attributable to the second?

 

[condog]

Condog: I was sure that was the principle behind well spacing, but I wondered exactly what the 'communication' was. Was there a measurable drop in pressure/flow rats in the first well attributable to the second?

When they tapped that turnbull, they would have noted an immediate change in pressure and flows on the other well. Not ideal, as it not onlly reduces EUR's it makes it immensly harder to control well head pressure and thus also condensate to gas ratios.

Changing the choke on one effect the other, and the traditional choke change may have limited effect. Thye will learn how to manage it when its only on two wells, but you certainly dont want it happening accross the acerage.

Your calculations above on width of the fracs is helpful in the understanding, and by calculating frac fluids we can attain an average frac width, but that doesnt mean they wont communicate, as some frace will go out in multiple directions and be relatively narrow, while others may create long fissures in the surrounding rock. ie the Turnbull situation.

IMO we can probably presume well spacing of 50-60 will be easy, but 30 - 40 acre spacing may work in some areas and not others.

Two things are for sure, they wont want wells communicating, and they will want minimum well spacing. So we can imo reasonably hope for a 50% increase in reserves from well spacing and wish for a 100% increase. IMO it wont be effectual in this reserves statement, it will imo be in 12-36 months time. Right now thier focus will be on securing acerage, not reducing well spacing.

They cannot afford to do it now, as they need to use all available capital and time to secure the acerages we have.


So right now in our immediate short term we can look forward to:
1. A significant reserves upgrade
2. 4th Rig operating and accellerated news flow from new wells
3. TSX listing, and weve already seen how hungry some canadians will be for AUT

Then in medium term look forward to more acquisitions and thus upgrades in reserves of 10-30 odd %

In long term look forward to reduced well spacing and thus upgrades of 50% or more.

 

[Sdajii]

Thank you, Condog, that answers my question and then some.

Your wealth of knowledge and willingness to share it are appreciated, as always.

What are your thoughts on Wednesday's big buying? I haven't seen a change in substantial holding notification, could it have been a new or smaller player? I hope so!

 

[philly]

I was reading that TXS might be merging with LSE [London Stock Exchange]. if this goes through is AUT then likely to list on the LSE as well as TSX? If so this would give AUT a lot more exposure and would potentially be good for the SP. Any thoughts?

 

[Magic Man]

Well another deflating day after a promising start to the week.. Any one know any reasons why we took such a hit. The sellers seem to be holding firm and buyers are up.. if she goes below 2.80 might get a bit nervous.

 

[kyrondgm]

Well another deflating day after a promising start to the week.. Any one know any reasons why we took such a hit. The sellers seem to be holding firm and buyers are up.. if she goes below 2.80 might get a bit nervous.

reckon some investors might be thinking the run is over and taking profits...i even saw a stockbrokers report (cant remember who, hartleys?!) where they recommended to reduce AUT holdings. unfortunately after such a strong run, a couple bad days will get most people nervous! no way i am selling though, if this ship goes down then i am going with it!!! :

 

[donteatme]

My autosell got me out at $3.15 with a nice profit. Will be reentering again soon.

 

[condog]

Nothing to worry about lads, storm in a tea cup, its super healthy to have these pull backs, establishing resistance and ridding ourselves of nervous sellers as we go.

Sadji
Time before LAst time Harbour advisors bought big, they went about 6 days before showingf thier cards. Admitedly, the first five they probably where not classified as significant. So ??, i really dont know, but it was huge volume.

Plenty left in this thing lads so dont go fretting, and i wouldnt be out of it too long. Seen plenty of folks thinking they are ultra tricky trading a few cents here and there on this one. Most have been very regretful, they didnt just hold.

 

[Mister Mark]

Iv got lots already but took a punt and topped up on some today, see how it goes.

 

[donteatme]

My autosell triggered unintentionally, hope it can stay low for me to get back in. Wasn't really expecting a pullback, was hoping the buying would keep going.