AUT - Aurora Oil and Gas

[trader8888]

The sales going through that are holding the sp down are pretty small volumes, and there has been a long absence of operational updates. Im not concerned at all.

60 wells in 2011 will drive value. I do however want to see some cash entering the balance sheet from those earlier wells.

Condog, check the 2011 financial report, results for the six months ended 31 December 2010

- Revenue for the Period was US$1.2 million, including revenue from production net of royalties from post farm out wells that began production during the months of November and December 2010.

 

[condog]

I noticed our little cousin EKA made a nice little acqusition , substantially increasing thier net acres in the EFS.

The thing that makes me more comfortable with AUT, is that even though its priced with a premium built in, its managed to acquire its acerage right in the known and tested sweet spot.

This location that EKA have just acquired, whilst it may or may not be in the condensate window its much higher risk then Excellsior, simply due to its locationwhich hasnt been as extensively drilled as that surrounding excellsior. Mind you they got it at a bargain basement price.

 

[Sharejon]

I hold more AUT than EKA, but in terms of value at the moment EKA takes the cake.

I agree that AUT is fantastic for the sheer safety of it, although if you consider these facts, eka looks great:

EKA's market cap is currently 80 million, with 1500 sugarloaf acres

AUT's market cap is 1.15 billion, with 15,600 sugarloaf/longhorn/ipanema/excelsior acres.

Even when you don't include the Fayette County or the newly acquired 3,975 acre land holding, it is easy to see the value in EKA, even when compared to AUT.

With things in the Fayette kicking along in the next couple of months + any new information of wells in the Burleson and Washington Counties................. put it this way, there is alot of money which could be made in Eureka, alot!

EKA's new acreage might have EUR's of 250,000 boep/d per well, compared to 500,000 in the sweeter regions, but it could still be an unbelievably economically beneficial opportunity, none-the-less.

 

[Sharejon]

As a heads up I'm not for one moment implying 250,000 EUR's could be achieved on eka's new acreage, but if it did that'd be a very good scenario.

Back to AUT, this up and coming production update seems to be well and truly overdue. The sugarloaf production update is overdue, let alone the update on what's happening in the other AMI's!

I'm expecting it to be jam-packed with production figures, it should be great (mind you it's taken a while).

 

[BrightGreenGlow]

With the updates not coming through as usual what would be the reasoning? Waiting for a development? Bad results maybe?

 

[estseon]

I hold more AUT than EKA, but in terms of value at the moment EKA takes the cake.

I agree that AUT is fantastic for the sheer safety of it, although if you consider these facts, eka looks great:

EKA's market cap is currently 80 million, with 1500 sugarloaf acres

AUT's market cap is 1.15 billion, with 15,600 sugarloaf/longhorn/ipanema/excelsior acres.

Even when you don't include the Fayette County or the newly acquired 3,975 acre land holding, it is easy to see the value in EKA, even when compared to AUT.

With things in the Fayette kicking along in the next couple of months + any new information of wells in the Burleson and Washington Counties................. put it this way, there is alot of money which could be made in Eureka, alot!

EKA's new acreage might have EUR's of 250,000 boep/d per well, compared to 500,000 in the sweeter regions, but it could still be an unbelievably economically beneficial opportunity, none-the-less.

What is so attractive about AUT is its transparency. We know what we have and we now have a feel for the operator's ability. It might be more boring but, if they continue to pile on the value, I'm all for a bit of stress-free appreciation of my capital.

EKA might do very well out of its other acquisitions and so the upside in terms of multiples might be greater. But it will take some time to convince the market. There's certainly a case for investing in something a bit more exciting but I don't feel that the two can be compared because the new acquisitions may prove to be a drag on the price until success starts to be reported. That is happening in the UK with Empyrean, which is currently traded at a little more than 1/3rd of NPV10/share for the 3p Sugarloaf reserves. Success in at least one of its other projects might release some of the damper on the Sugarloaf reserves value.

EKA may overtake AUT but I don't think that it will mark time with it until it de-risks its other projects.

 

[AngusSmart]

With the updates not coming through as usual what would be the reasoning? Waiting for a development? Bad results maybe?

Wasnt it in one of the latest reports about not having as frequent updates?? or was i dreaming?

 

[TabJockey]

No offence to fundamental holders but AUT looks like a fantastic technical short trade candidate ATM.

 

[trader8888]

No offence to fundamental holders but AUT looks like a fantastic technical short trade candidate ATM.

Could'nt agree more, and untill they release the operations update it will keep on drifting down IMO.

 

[Magic Man]

Its going down because the volume is pathetic.. lets buy 1 stock of AUT or hang on lets buy 9 stock of AUT...TERRIBLE. JUST MY OPINION

 

[trader8888]

new well application - DEWBRE-JOHNSON UNIT

 

[skyQuake]

more bids hitting mkt than asks but asks continuously being refreshed today. Prob someone with a lot of stock to move

 

[estseon]

No offence to fundamental holders but AUT looks like a fantastic technical short trade candidate ATM.

They should be reporting the 1st qtr within the next 3 weeks or so and that will have detail of the first real cash to flow in from production. It is possible that the directors might give an indication of progress in converting 3p reserves to 2p by new drilling and production since 31/12.

For my part, I'd be quite happy for there to be a substantial short position out there in the market when that report is released.

 

[youngone]

Anyone else holding AUT? Why all the noise but SP is heading down?

 

[sparkie]

yeah ...one has to wonder

there hasnt been much going on in weeks

 

[trader8888]

Anyone else holding AUT? Why all the noise but SP is heading down?

Ive been holding since 40c youngone and am still holding. Its been more than a month since the last production update and i suspect a few are selling because its not exciting enough for them and the 12mt CGT tax break will be up for a lot of people so they may be selling a % of their portfolio. This should change come the operation updates and quarterly activity report.

 

[Magic Man]

Is anyone buying AUT today??

 

[trader8888]

Another 2 well applications -
- HOLLAND-BROWN UNIT
- HOLLAND-OPIELA UNIT

 

[dashwood]

looks like the mounties got their men up....let's hope they get things movin on both markets!

 

[Sharejon]

Here is what I posted on the EKA forum regarding the Sugarloaf, I'll change the values to suit AUT's interest.

We own 3700 acres net, out of the 24000 gross sugarloaf acres.

3700 acres / 80 acre spacings = a total of 46.25 wells for AUT over the duraction of the Sugarloaf. I'll use 80 acre spacings for these calcs but in the future 60 acre spacings will probably come into play, with the possibility of slightly even tighter spacings eventually.

Expenses first: This data comes from NSAI's assumptions for the December 2010 reserves report (located in AUT's investor presentation from March 8)

18.75 net wells * $6.75 million per well = $126.6 million we have to pay for capital expenses over the duration of the Sugarloaf.

We also pay $20,000 per well/month. Let's assume the well flows for 15 years (EOG investor reports show a possible flow of 20 years)

That's $3.6 million per well over this 15 year period.

In other words roughly $10.35 million per well, capital and operating expenses.

Revenue:

If we assume a possible 500K EUR, that's equivalent to $54 million (p.o. $108/barrel) revenue from this well.

54-10.35 = roughly $44 million per well of profit (before tax and royalties)

After royalties of 25%, this = $33 million

after corporate tax of 35%, this = $21.45 million

$21.45 million * 46.25 = $992 million


N.B. These rough calculations are using 80 acre wells spacings. The potential of 60 and possibly 40 acres could very well (60 acre well spacings probably will) come into play in the future. If 60 acre spacings eventuate, that $990 million could possible turn into something like $1.5 billion.

So although the growth would be steady over 10 years or so, share price growth of 5 times purely from the Sugarloaf is very much achievable, and this is using the current assumptions. An AUT broker report has said that AUT's reserves could increase by as much as 10 times with tighter well spacings and new fraccing technology.