AUT - Aurora Oil and Gas

[Assasin]

Well then you will love this morning's announcement, 22% increase in production since last month.
Difficult to find a reason to sell this one at this stage.

 

[HEA815]

Not alot being posted on this thread anymore. Obviously the world and AUT have gone sour over the past weeks. I've got little news or analysis to add but am interested if anyone is still following, or if Condog has surfaced?

 

[PinguPingu]

I think Aurora is still chugging along as usual but the global economic situation, especially a weaker oil price seems to be hitting Aurora and other energy stocks.

 

[Assasin]

Hi guys,
Please read company announcements of recent times and I'm sure you will be impressed. AUT has been value adding in a huge way in the past few months and has a huge next 6 months in front of it. Marathon plan to even expand the drilling program and this years drilling target is well on schedule.
IMO, at current levels, AUT represents great value for the next 12 months providing the world economy doesn't fall over.
To keep up day to day, unfortunately for ASF members, HC has the bulk of the experience posting. Wish we could get it back here.
Cheers

 

[estseon]

I posted this on HC:

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MRO is pulling in additional rigs and Hilcorp is currently ahead of schedule (for drilling to hold by production). We've seen the HiWay fracc experiment and it is questionable whether the pairings held more acreage than single wells. So, it is quite possible that some experimentation will take place.

There is also the mystery of Esse Smith B, which is clearly in Excelsior (see AUT (good oil conference) presentation slide 17) but is producing at Sugarloaf rates. It is very close to Esse Smith A (we've not seen figures for that). We can't rule out that it is an experimental well in a shallower part of the pay interval. This is just speculation. What is not speculation is the 30 day result reported or that it is an Excelsior well.

Chapman Schroeder, which must extend into other Hilcorp acreage, is comparable to Esse Smith B and Sugarloaf wells also. Between them are the two Henke wells, which were totally unexceptional.

So have Esse Smith B and Chapman Schroeder been drilled in a shallower part of the interval? If they have, and the results can be replicated over the whole Excelsior acreage, we could see an upgrade in the valuation of that acreage.

Re holding of shallower parts of the pay interval by drilling the lower part of the interval: MRO has made reference to the Buda and to the Edwards (Aug 30, slide 18) - upside potential, other stacked pay zones. Just as the Austin chalk overlays the EFS, so the Buda underlays it and the Edwards is deeper. Any thoughts?
**********************************************************************

There has been conjecture that MRO will be less communicative than was/is Hilcorp. That does not make logical sense as MRO is a listed company embarking on a venture that it has paid a lot of money for and which seems to have been related to its recent hiving off of downstream business. It has trumpeted the value of the investment in the "sweet spot" and it will be under pressure to deliver. Hilcorp is a private company.

The main risk at the moment seems to be the Eurozone. The solution would appear to be for the Eurozone states to form a fiscal unity (1 step closer to forming a federation) but nobody seems to have questioned whether or not the national governments have the powers to do that. It would be a significant ceding of sovereignty and many of the national governments may have to go to their electorates to obtain the powers to do that. Even supposing that they are granted the powers, it will take months.

So, I think that we are in for a turbulent time and the general market concerns will cloud the progress being achieved in Texas.

 

[alexc2005]

Poor AUT, has definitely copped a hiding over the past few weeks.

AUT used to be the share that was keeping my portfolio alive with all this market downturn, now its down there with the rest.

Announcement out today with an impressive drilling schedule for the next 12months.

Hopefully see a turn in the price to follow suit.

Got to be a bargain at the $2.20 price it's trading at today.

 

[mattyhammer]

Good day today! Up 11%.

 

[bennywizard]

Lots of positives for AUT
Oil price stabilizing
AUD under parity
Continued good drilling results and flows
Reserves upgrade
Ramp up of drilling planned for next year
Euroz valuation upped to $5.22
Funding in place for drilling for entire 2012
Reduced risk of dilution as we should not need to raise capital, unless there is a grate acquisition opportunity

All this should provide some resilience against potential world disasters or failing economies, even if oil drops to uneconomic levels, it will bounce back and AUT has the
the ability to weather storms in 2012 if needed.

 

[alexc2005]

Managed to sell out of this on monday @ 2.95.

Having only put in a sell for 2.90 i was very happy with this (although, seems a shame when i could have sold at 3.60 ).

Anyway, i plan to re-enter when there is a clear indication of direction in the stock.

Had to lock in some profits for myself.

First ever closed trade yay.

 

[Sdajii]

Managed to sell out of this on monday @ 2.95.

Having only put in a sell for 2.90 i was very happy with this (although, seems a shame when i could have sold at 3.60 ).

Anyway, i plan to re-enter when there is a clear indication of direction in the stock.

Had to lock in some profits for myself.

First ever closed trade yay.

Well done

I sold almost half of mine at $2.79 when the big jitters started recently, expecting things to get a lot worse, planning to then buy and ride it back up. I watched the market tumble and AUT specifically went down to $2.15 or so, I felt pretty clever. I watched in surprise as AUT climbed back up to $2.65, missed the buying opportunity, figured it would drop back down, sold about half of what I had left, then watched it flirt with $3. Oops! Other than buying back in when it got low the plan worked really well!

At least I've made a good profit along the way. I think my average buy is around 80c. I have less optimism about Europe than the majority of the market seems to, so I'm not entirely uncomfortable sitting with a fair bit of cash at the moment. Great time to sell AUT (and most things) in my opinion. The rally of optimism seems to have run its course, and even if the news in Europe is as good as we can realistically expect, it seems to have mostly been factored in already, so the upside isn't that great. If the painful reality hits, which I see as more likely, the downside is far more extreme. Doesn't seem like a good situation of risk vs. reward to me at the moment.

 

[trader8888]

Well done

I sold almost half of mine at $2.79 when the big jitters started recently, expecting things to get a lot worse, planning to then buy and ride it back up. I watched the market tumble and AUT specifically went down to $2.15 or so, I felt pretty clever. I watched in surprise as AUT climbed back up to $2.65, missed the buying opportunity, figured it would drop back down, sold about half of what I had left, then watched it flirt with $3. Oops! Other than buying back in when it got low the plan worked really well!

At least I've made a good profit along the way. I think my average buy is around 80c. I have less optimism about Europe than the majority of the market seems to, so I'm not entirely uncomfortable sitting with a fair bit of cash at the moment. Great time to sell AUT (and most things) in my opinion. The rally of optimism seems to have run its course, and even if the news in Europe is as good as we can realistically expect, it seems to have mostly been factored in already, so the upside isn't that great. If the painful reality hits, which I see as more likely, the downside is far more extreme. Doesn't seem like a good situation of risk vs. reward to me at the moment.

sdaji

"Great time to sell AUT (and most things) in my opinion" i am exactly the opposite of you, ive been buying up big recently especially TXN and AUT and made a motza in the last few weeks, as some of the data i could see coming out of the US about a month ago did'nt at all point to a recession and then just yesterday we see US GDP come in at 2.5% which is still pretty slow but no where near a recssion, and china GDP at %9 odd a couple of weeks back. While major economies are still growing and going gangbusters in china's case, oil supply will be tight and prices will likely remain high. I work in an industry that gives you a good indication on how the economy is (in AUS), and we are flat out at the moment and have been for 6 months now. 3 tanks of diesel a week good thing im not buying.

AUT is the fastest growing stock listed on the XEJ with regards to Q on Q revenue and production growth.

 

[Sdajii]

I don't claim to be any sort of expert and I could be entirely wrong, but what I see is a situation where everyone was panicking about Greece/Euroland, then suddenly everyone believing all is fine (?? ??? ??) and a rally ensuing. Sure, that may continue for a short while. Sure, some things might look great, and I think AUT's fundamental situation would have it looking super pretty in a happy economic background, and in the short term things might seem great, but the attempts to keep Europe collapsing really seem pretty feeble, and in the medium term I can't see anything but big trouble. It looks to me like the band aid solutions are just going to delay the inevitable (and this is hardly a view I hold alone, in fact, the above probably sounds pretty heavily cliche).

You may be right, I may be wrong, and I'm not confident enough to have completely sold out - I've hedged my bets and still hold a bit, including a fair chunk (at least by my standards) of AUT.

If the Euroland house of cards does collapse (and surely no one could possibly say that is guaranteed not to happen), it won't be pretty, and assuming the whole world doesn't collapse into absolute chaos, that will be a great time to buy back in. I hope you're right and Europe either manages to pull it off or that any flow on trouble is minimal. I think that's a bit optimistic, but would be glad to be proven wrong

 

[PinguPingu]

Anyone know why AUT's surged past $3.00 in the last week or two? Frustrated now I sold out at there ($3) but you can never tell what's going to happen macro especially. It seriously still feels like there's something looming just around the corner but so far we're holding steady..

 

[trader8888]

Anyone know why AUT's surged past $3.00 in the last week or two? Frustrated now I sold out at there ($3) but you can never tell what's going to happen macro especially. It seriously still feels like there's something looming just around the corner but so far we're holding steady..

I think the biggest factor is AUT catching up to fair value, its been so cheap and still is. Also strength in WTI is helping alot. Impressive drilling sceduale next year.

 

[trader8888]

I have gone through the recent quarterly and have taken the production data from wells with the longest time of production and have calculated the total BOE the well has produced, i have also calculated the total revenue earnt from that given well. I have excluded excelsior as the data is very early. One thing i should add, is that AUT are very transparent with their production numbers, alot of energy companys could learn from this.

Key Parameters -
Gas conversion ratio - 6:1
Oil Price - $85 a bbl

(Days) - Total number of days the well has produced

(%) - represents the percentage paid off on a well cost of $7.5 million.

AMI -

Sugarloaf -

WELL........TOTAL (BOE).....DAYS.....REVENUE($M's)....(%)

Weston......311,844.........581......$26.5............353
Kennedy.....170,190.........587......$14.45...........192
Easley......183,030.........496......$15.55...........207
Morgan......315,549.........452......$26.82...........357
Rancho......316,330.........440......$26.88...........358
May.........164,507.........315......$13.98...........186
Luna........179,988.........314......$15.29...........203
Kowalik.....166,825.........291......$14.18...........189
Urruita.....171,411.........279......$14.56...........194
Direct A....115,140.........239......$9.78............130
Hollman.....131,511.........205......$11.17...........148
Beauring....82,843..........172......$7.04............94
Jordan......62,896..........92.......$5.34............71

Average days on production - 343
Average % well payout - 206 %

Average well brakes even in 206 days or 6.7 months

Longhorn -

WELL........TOTAL (BOE).....DAYS.....REVENUE($M's)....(%)

T/bull 1H...149,463.........471......$12.70...........169
T/bull 2H...112,401.........299......$9.55............127
T/bull 3H...235,826.........380......$20.04...........267
T/bull 4H...252,616.........277......$21.47...........286
Sienkiewscz.205,440.........245......$17.46...........232
Yosko.......116,414.........159......$9.89............131
Barboza.....130,839.........164......$11.12...........148
Carter S....120,631.........149......$10.25...........136

Average days on production - 268
Average % well payout - 187 %

Average well brakes even in 187 days or 6.14 months

Ipenma -

WELL........TOTAL (BOE).....DAYS.....REVENUE($M's)....(%)

Patino......194,740.........333......$16.55...........220
Franke......117,790.........281......$10.01...........133
Foster......88,279..........180......$7.50............100

Average days on production - 264
Average % well payout - 151 %

Average well pays out in 151 days or 4.9 months.


These economics look very good to me, with well payback's very low. Its no wonder companys all over the world are scambling to get themsleves some prime EFS acerage and at any cost, so it would seem.

Also some very good points have come out of the conference call -

- Marathon looking to exploit all drilling techniques including HI-Way fracs.

- More horizontals to be drilled in the chalk to maximise drainage, a view also held by marathon.

- Shallower drilling in the EFS to take place after HBP drilling is complete.

- Pilot programmes to be started once HBP drilling is finished testing either 40,50 or 60 acre spaccings. This activity has already started on the trend, Rosetta Resources is just one company currently trialing.



This should'nt be taken as investment advice.

 

[poverty]

As you'd know Trader there are also people claiming AUT are selling their oil at a premium price as LLS. If true it would be a massive re-evaluation of their revenues.

 

[bennywizard]

Anyone know why AUT's surged past $3.00 in the last week or two? Frustrated now I sold out at there ($3) but you can never tell what's going to happen macro especially. It seriously still feels like there's something looming just around the corner but so far we're holding steady..

I agree with trader, but also add the price of oil which has recovered nicely currently $95 Barrel and the AUD being back to just over parity.
If oil stays at these levels or climbs and the AUD doesn't climb too high I am confident of $4 by end 2010. I could be very wrong but that's my feeling.
Macro factors are the only thing that I see getting in the way, and unfortunately its too hard to predict those.

 

[alexc2005]

I had intended to get back in at 2.76 after selling out at 2.95 but missed my chance because I was preoccupied.

Hopefully it drops back down again soon, if so I will jump aboard and ride the wave!

If not, there are plenty of stocks ready to surge

 

[Starcraftmazter]

If oil stays at these levels or climbs and the AUD doesn't climb too high I am confident of $4 by end 2010. I could be very wrong but that's my feeling.

I presume you meant 2011? That is quite a big call to make, given the current situation in Europe.

 

[Assasin]

I agree with trader, but also add the price of oil which has recovered nicely currently $95 Barrel and the AUD being back to just over parity.
If oil stays at these levels or climbs and the AUD doesn't climb too high I am confident of $4 by end 2010. I could be very wrong but that's my feeling.
Macro factors are the only thing that I see getting in the way, and unfortunately its too hard to predict those.

Yes you would be very wrong there Benny as I think you mean 2011.

As I said on HC, that is huge input Trader, thanks. I see you are only running with the 2 stocks now, is that right?