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AUT - Aurora Oil and Gas

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What will we have in store today for AUT. Turnbull 2 drilling away, Turnbull 3 being prepped for rig. Morgan frac and easily frac??

Certainly plenty of buyers and limited sellers. All looks good for 80c soon. 30 day morgan might be the impetus unless they surprise us and come out with Morgan IP's.

Whats your take on the two hilcorp applications called Pilgrim Lake for gonzalles. Riggs heading there before turnbul 4 or Ipenema perhaps.
 
AUT had over$8.8M in cash last time i checked after they exercised the directors oppies.

They should be good to get through the current drilling program without dilution in my opinion. This is only opinion.

MD says they have deliberately structured the farmin to avouid any further dilution prior to cash flowing sufficintly to sustain fiurther drilling operations.

At 10%, 25% and 40% interst well costs would be around $600K, $1.5M & $2.4M depending which acerage was drilled post free carried wells.
Any accelleration in the AMI at a mere $600K per well could easily be met.

Kennedy and Weston will soon be flowing cash, I estimate around June. Morgan in August to october and Easily October to Novemebr, assuming flows are in line with expectations.

So technically we could handle an extra well in Longhorn and and several extra wells in the AMI in 2010 without any need in my opinion for dilution.

15 Wells planned for 2011, but we need to see where prior to knowing what capital is required. If they are all in the aMI it should easily be met. Too many in Longhorn or Ipenema would be an issue.
 
condog said:
AUT had over$8.8M in cash last time i checked after they exercised the directors oppies.

They should be good to get through the current drilling program without dilution in my opinion. This is only opinion.

MD says they have deliberately structured the farmin to avouid any further dilution prior to cash flowing sufficintly to sustain fiurther drilling operations.

At 10%, 25% and 40% interst well costs would be around $600K, $1.5M & $2.4M depending which acerage was drilled post free carried wells.
Any accelleration in the AMI at a mere $600K per well could easily be met.

Kennedy and Weston will soon be flowing cash, I estimate around June. Morgan in August to october and Easily October to Novemebr, assuming flows are in line with expectations.

So technically we could handle an extra well in Longhorn and and several extra wells in the AMI in 2010 without any need in my opinion for dilution.

15 Wells planned for 2011, but we need to see where prior to knowing what capital is required. If they are all in the aMI it should easily be met. Too many in Longhorn or Ipenema would be an issue.
Click to expand...

It all depends on the drilling schedule in early 2010 and results from the free carried wells soon to come online.

Personally I wouldn't be averse as a shareholder to a little dilution to grease the wheels of the program in 2010 but if it can be done as you have inferred condog on revenues well all the better.

Reading a few posts from some pretty disgruntled ADI holders who were not offered a buy into the cap raising and have seen some heavy dilution for a measly 5.5 million in the bank makes me hope if a raising is done it will be in the latter part of the year when some more value has been added by further derisking of our acreages.

Quarterly made for pretty good reading and the cash position looks strong enough for the next quarter or two until some revenues start to flow through so we'll have to sit tight and see how it plays out I guess.

http://www.auroraoag.com.au/docs/2010/AUT20100430.pdf
 
Slipperz said:
It all depends on the drilling schedule in early 2010 and results from the free carried wells soon to come online.

Personally I wouldn't be averse as a shareholder to a little dilution to grease the wheels of the program in 2010 but if it can be done as you have inferred condog on revenues well all the better.

Reading a few posts from some pretty disgruntled ADI holders who were not offered a buy into the cap raising and have seen some heavy dilution for a measly 5.5 million in the bank makes me hope if a raising is done it will be in the latter part of the year when some more value has been added by further derisking of our acreages.

Quarterly made for pretty good reading and the cash position looks strong enough for the next quarter or two until some revenues start to flow through so we'll have to sit tight and see how it plays out I guess.

http://www.auroraoag.com.au/docs/2010/AUT20100430.pdf
Click to expand...


my view is that condog is very much excited by the play but equally is guessing, and i am not at all convinced the position aut are in is good enough for the near term.. going by his numbers, which i dont entirely agree with, thats scary enough, and i see far more costs than just what condog is discussing, this is a greenfield play.. whats facing the jvp is very much a huge commitment in capital, i dont think the aut position is that good, but its early days. you can run lean on what you have and gamble, or be ready for whats about to happen.. if your not preparing for the future then you must be preparing to exit early..

my view is that an opportunity exists for a cap raising atm that may be of considerable benefit.. aut equally have an opportunity to do as adi have, and right now would be a good time to give institutional investors a great envelope of opportunity and could also gain aut strong support. later imho would be a harder product to sell... and if there is a second wave of stock market weakness or corrections, the high risk reward opportunists may not be as available.. imho strike whilst the iron is hot, cover your position early and be in the right shape for the next 12 months early.. later on you may be facing a whole lot of different circumstances. aut would need a heck of a lot more than what they have to get by in the near term imho

hilcorp can potentially, and imho, will have to hit these leases real hard. and very quickly. and i dont think it will be with a single rig. my view is that hilcorp would return and make a very big investment in development of the play and i cant seeing them doing that in 2 years from now.. i see all jvp partners gearing up for something, and aut have yet to act.. i think adi with 10% have more cash in hand than aut right now, which may just be enough for the near term.... and adi is also seriously looking at selling yemen, so more capital to come with any good fortune.. 10% of this play would easily need 20 times what adi have in reserve atm.. the costs of developing a play like this given the leasing constraints is grossly misunderstood and underestimated by just about all i know of,, and in the case of whats happening to another eagleford player in mcmullen, i think its beyond belief how precarious things are with that type % of lease holding, leaving them vulnerable to the wolves imho..

you need substantial capital for a play like this.. staggering numbers really.. be careful in how you calculate the future capital requirements of your investments imho.. holding more % can be very much a disability if your not extremely cashed up.. extremely careful and cautious and conservative..

i can see some huge potential in all the jvp partners, i have invested a small holding in aut on the belief its got a little way to run, and it has so far.. and i do think they have considerable future potential, but equally there is a risk factor you have to consider, and if i see aut making the right noises i may invest a lot more capital their way.. until then i will look at what develops and there are many things i can see that could eventuate in the very near term that imho may have significant impacts on the jvp partners..

cash is king still you cant sit on your hands any more in this sugarkane play..


all imho and dyor
 
" Originally Posted by condog View Post
AUT had over$8.8M in cash last time i checked after they exercised the directors oppies.

They should be good to get through the current drilling program without dilution in my opinion. This is only opinion."
=========================================================

I agree, condog. What's all the moaning and crying about "dilution" all about?

ADI issued 22m shares at 25c to increase cash to AUD 9.5m. If I remember correctly, small holders could have bought in the market at 26/27 cents in the days prior to suspension.

I didn't. To borrow an expression from OGG, I have been 'maxed out' since last October when I doubled up following the farm out.

AUT had AUD 6.5m at 31 March

Exercise of Directors' options in April:

About 1.4m @ 19 cents = AUD 275k
About 3.3m @ 24 cents = AUD 800k
About 1.0m @ 29 cents = AUD 290k
About 1.8m @ 30 cents = AUD 550k

So, about AUD 8.4m cash in hand unless I've missed something.

So, cash holdings for development of S/L are comparable but development of Longhorn (25% WI) and Ipanema (30% WI) will still need further capital.

The AUD 1.9m raised was dilutive. Fewer shares were issued and the dilution was less than for ADI. But the discount was greater - that is the nature of directors' incentive options.

There is no getting away from dilution until cash from production attributable to the JVPs builds up to the point that it can service new development.

I have holdings in both companies. I've been following S/L for over 4 years. I look at what was achieved before the beginning of 2010 and I look at what has been achieved since.

Hope value has been diluted. Real value has been generated. The cash is destined to create more real value.

What's the issue?
 
Agent ............ straight from Jon Stewart himself. If as you say its 2 years from now AUT will have substantially more cash then ADI and EKA, with interest in 10 wells worth of cash flow, some at higher interest, so roughly about 15:3 the cash flow of ADI and EKA. So if in 12 months ADI has accumulated $10 million, AUt should technically have accumulated approx $50m in cash.

$6.5M prior to oppies. $2.4M from oppies exercise. No OPEX or CAPEX going forward other then admin. Cash flow will produce prior to any drilling costs.

I suggest you contact him via email, hes a very proactive communicator. They actually have $8.5M+ cash, which is ample given the imminent cash flow and percentage working interests.

The only development that can outpace AUT capital at present is on Longhorn and Ipenema. The aMI will be limited by EKA and ADI capital. Which when you take other things into account is far more scarce then AUT's. Yemen???

At the end of the day what a wonderful problem to have, so many productive drilling opportunities that you cant do them fast enough.
 
estseon said:
"What's the issue?
Click to expand...

The issue is simply that loyal shareholders are not given a bite of the cherry.

With EKA it was a prorata issue and I maintained my shareholding by taking up the issue. With ADI one shareholder AWE was given the opportunity of maintaining its percentage holding. Other shareholders were not. The discounted shares were given to a third party who will sell these shares at a profit almost immediately.

If AUT do raise more capital I would hope they follow the lead of little brother and give me a chance to maintain my percentage holding.
 
nioka said:
The issue is simply that loyal shareholders are not given a bite of the cherry.

With EKA it was a prorata issue and I maintained my shareholding by taking up the issue. With ADI one shareholder AWE was given the opportunity of maintaining its percentage holding. Other shareholders were not. The discounted shares were given to a third party who will sell these shares at a profit almost immediately.

If AUT do raise more capital I would hope they follow the lead of little brother and give me a chance to maintain my percentage holding.
Click to expand...

fat chance nokia imo they are to greedy for that , what happens to the ami if one or more parties can't contribute cash.......interesting ......
 
My thoughts exactly. What I predict will happen is that when we reach post-farmout status and the percentages are paid up by Hilcorp, after a year or so those who ARE profitable will purchase the debts and carry for the ones that ARE NOT profitable. With the Aussies in one big circle down here I doubt any single company in the play is in a position to roll up shop and leave town this far into the game. Now it's like throwing darts and hope it lands on a winner. I'm trying to forsee the strategy myself but my bulb has not lit yet.
 
Ramblin Round said:
My thoughts exactly. What I predict will happen is that when we reach post-farmout status and the percentages are paid up by Hilcorp, after a year or so those who ARE profitable will purchase the debts and carry for the ones that ARE NOT profitable. With the Aussies in one big circle down here I doubt any single company in the play is in a position to roll up shop and leave town this far into the game. Now it's like throwing darts and hope it lands on a winner. I'm trying to forsee the strategy myself but my bulb has not lit yet.
Click to expand...

ramblin, this has been my fear but not wanting to state it for obvious reasons...... thats why i hate tis "dart" game at the min.:eek:
 
Id rather be invested in a company that has so many viable well opportunities it cant drill fast enough , then any other company on the market at present.

This is a storm in a tea cup fokes. Your suffering winners remoarse. Moving up maslows hierachy of needs in respect to your stock. Now you know its good , your looking for something else to worry about, because you like worrying. lol

EKA is cahed up, ADI is cashed up and AUt is cashed up with 8.5M. Cash will be forthcoming. Its all good. Hillcorp will be the issue they have $300m burning a hole in thier pocket. But i did note on TRCC they are drilling two wells of thier own in gonzales. That will burn $12M of thier cash.
 
nioka said:
The issue is simply that loyal shareholders are not given a bite of the cherry.

With EKA it was a prorata issue and I maintained my shareholding by taking up the issue. With ADI one shareholder AWE was given the opportunity of maintaining its percentage holding. Other shareholders were not. The discounted shares were given to a third party who will sell these shares at a profit almost immediately.

If AUT do raise more capital I would hope they follow the lead of little brother and give me a chance to maintain my percentage holding.
Click to expand...

nioka

i thought i read somewhere on the eka thread on hc that you had dumped out the majority of your shares in adi and went to eka??? and if eka did a pro rata to existing shareholders, why were they not interested in institutional support long term? i thought the eka share raising was under-subscribed, with bell potter taking up the slack??

from eka a few weeks back

"Valid acceptances from 346 shareholders were received in respect of 15,467,955 shares representing a take-up of approximately 70%. The underwritten shortfall of 6,574,357 shares will now be placed by Bell Potter as underwriter of the Entitlements Issue."

perhaps adi didnt want the same scenario.. or am i thinking wrong here?? plenty of clowns whom are adi holders are absolutely going to town on ADI re the cap raising yet ignoring the lack of support eka got from their own shareholders just weeks ago.. imho institutional support that adi has just achieved is a brilliant move and well timed..

also, what loyalty are you referring to in regards to the adi share? if i understand it right i thought you were one of the highest volume traders on the adi and eka weekly turnover with most of your position in the later? do you expect loyalty points for all the shares you have traded in its entirety? you have made $4000 into $400000 according to your own posts on the forums by trading between the partners.. imho your way ahead of the game in a big way... which i absolutely admire you for btw..

also, where is it stated these investors will be selling their stock immediately? is it a guess or a fact you are aware of?

tia

condog.. what i am saying is that your not in a position to fully appreciate the costs needed to keep those extended acreages. if your not being topleased then your looking to have to raise way more than $1500 per acre to renew if a landowner wants to (so aut have some pretty big capital requirements JUST FOR LEASES unless they commence immediate drilling).. i know of ranch owners in our acreages who have been handed $600 per acre cheques already by enduring, thats theirs to keep and spend.. and a promise of $900 more in a few months time when their leases run out, so $1500 all up per acre.. enduring will lose the $600 if hilcorp dont drill their leases, or gain acreages from the AMI jvp bigtime if hilcorp let our acreages go.. topleasing only happens on the very sought after and profitable plays.. and topleasing is becoming a huge issue.. so dont think a whole bunch of wells wont be needed to be drilled in all regions in a very very short period of time.. whether the respective directors are calculating their future requirements and commitments correctly is up to the investor to decide, you have very much explained your position without much substance, and forgetting history entirely its very much a distinct possibility that wells are being drilled to keep leases, as is the case atm with the drilling in longhorn as your obviously not aware.

further you present a case of aut having the ability to finance all necessary future needs.. as you put it.. based on an email you claim you have..(keep that email for later condog, could be a lucrative one if you follow my drift)

you know, if i believed every official release the jvp put out since the project began, and in the case of aut i include that last cap raising at around .50 cents aut did, where 2 wells were promised for the extended acreages and those wells never eventuated..then i would not be as cynical of aut.. dont get me wrong, i am investing in aut, and i fully understand their position, but i see it way way different to you right now.. in this email you had, did you get a full business model to back it up, and a full explanation of the number of wells, which acreages they were in, leasing capital, pipeline capital requirements, and the timings? imho aut cannot raise capital unless their sp is well above .50 or those previous investors from a few years back would be absolutely livid in seeing further dilutions.. and the directors themselves are loving the cheap shares they are giving themselves..

condog, all directors will heavily promote their position to you, and anyone not doing it would be remiss,, but i listen to what they say and research everything i can to see how accurate they may be.. not many wouldnt be saying
'we're fine. alls sweet, looking good"


i look at your last post condog and really dont get your perspective you have on fellow investors here.. think your failing to see the picture here, as i am investing in aut, and i have done so for an outcome.. the 4 extended acreage wells.. i see significant upside.. but i expect a lot of changes and see a lot of possibilities and eventualities in the near and long term for all the respective jvp partners..
 
Agent obviously everything could change, but right now we have 10 free carried wells and virtually no costs for 2010. Leasing costs are minimal. I take your point about lease renewals.

To meet well spacing requirments AUT has 9690 net acres, which equates to 15 net well costs at 1 well per 640 acres to retain the leases.

15 Wells at a total of $6M each is $90M , but they dont all need to be done next year or the year after, some do some dont.

Based on our share of the 15 wells next year we will need to have approx $18.5M to meet our obligations depending on the priority order.

The following year we will need roughly $37M assuming costs remain the same, which is unlikely.

On my estimates we will collect $22.5M roughly next year, plus what we collect and retain this year.

Its all rough, hypothetical and i run multiple scenarios, but if condensate and gas remain around current levels, unless we have several dusters we can in my opinion easily meet capital requirments for the current drilling program.

In addition once you have two flowing wells at signiificant rates a debt facility becomes an easily affordable option and they would be crazy not to utilise one given the low interest rates and high ROI predicted.

Having said all that yes there are many, many uncertainties, but your prediction that i underestimate the expense is just as innacurate as your assumption you understand them better then I.

Right now with the current program it looks easily affordable. Thats not to say they wont change the schedule, bring it forward or capital raise.

Like all these time will tell. IT wasnt that long ago Agent you where indicating to me AUt was the wrong choice over ADI , you had serious concerns about the acerage and lease costs. I went ahead on my calcs and backed my research and got it very right indeed. In that time AUt has moved from low 20c range to 68c and back to 66c. ADi has gone from 17c to 38c back to 29c. Now even you have seen the value and joined the ranks as an AUT holder.

AUt still has to realise the value of its extra free caried wells and thier revenue streams, so has much more value still in it. Those extra revenue streams will then fuel faster growth then the other two AMI partners.

Anyway lets just all enjoy the ride. Its been good so far, looks even better in the near term.

Yep im up beat, but not niave.
 
Agentm said:
nioka

i thought i read somewhere on the eka thread on hc that you had dumped out the majority of your shares in adi and went to eka???
Click to expand...

You read wrong or I posted incorrectly. My investment account is still accumulating all three. You will see that by the slow increase in the number held. My trading account had sold its ADI for EKA and AUT but has started to trade back to ADI while maintaining my AUT. My main holding is with ADI and has always been that way. I consider myself a substantial long term loyal shareholder.I am peeved off by not being given the opportunity to take up the offer and maintain my percentage holding in the same manner that AWE was able to. One in should have been all in. Because of this I will be slowly switching to AUT as my main investment in the three.

For tax implications I trade and invest in two completely different named accounts.
 
Hi Nioka,

Would it be possible for you to please clarify the following statement for me:

"For tax implications I trade and invest in two completely different named accounts."

Does this mean 2 separate accounts with your broker (your name on both, but different account numbers)?

Basically, I would like to know more as I'm interested in doing a bit of trading aside from stocks I'm invested in.

Thanks.

luap77
 
Oh, and apologies to all for going off topic. I am asking because I haven't set up a structure that will enable me to distinguish these two activities for tax purposes, and that statement jumped out at me as a chance to seek clarification.
 
Most definitely when it comes to penny stocks, these are by far a good pick. I mean there has to be tons of them out there and how do you ever choose ? At least we all here are researching and making good decisions backed up with real information from the field that we can see. Sure beats hopes and promises from some wannabe widget solar company or some crap investment.

You guys want to hear something hilarious ? Here in the States they are running a media blitz describing the use of natural gas to be the Eureka movement. I just saw a commecial about it and had to do a double take. But it's stating as in "Eureka" you just thought of something good .......you know ? Now if that's not an opportunity for improvement for EUK I don't know what is. :D
 
Nioka

"I am peeved off by not being given the opportunity to take up the offer and maintain my percentage holding in the same manner that AWE was able to"

I struggle to understand the point, especially as ADI has been trading close to the issue price recently (26/27 cents). You are trading a proportion of your portfolio anyway so what is the importance of % holding?

Rights issues are relatively expensive and long-winded affairs. The management took advantage of quick alternative that minimised market uncertainty. The AWE holding most probably effectively blocks opportunistic predator attention. We want to realise the full and proper value on these shares not get taken out by some vulture feeding off our long-term commitment. Speaking also as an AUT holder, I don't want opportunist predator attention for that company either.

So, good luck with your trading of the price dislocations that seem to crop up. But I do think it time to bury the mode of capital raising used by ADI. EME did a second capital raising in April (a placement also) and only then started to make more specific comments about S/L. AUT has had the further cash from exercise of Directors' options. The new cash requirement seems to be a fairly recent event and seems to be focussed on S/L. AUT has already said that it will raise further capital for the ramped up activity programmed for 2011 which, presumably, will include Longhorn & Ipanema. Continued operations on S/L in 2010, for which it appears to have cash, will hopefully raise the share price in advance of that CR. It's looking quite smart for AUT.

By bringing forward development, they are reducing the discount in the NPV calculations anyway. That will provide some compensation for dilution through CRs. And BP has inadvertently handed everyone drilling onshore a big present.

Let's defer judgment for a few months and see what happens.

Sorry for talking ADI on this BB.
 

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