AUT - Aurora Oil and Gas

[mir]

stefan_invester
here is the answer to your question
euroz latest report


Aurora Oil & Gas Ltd (AUT $0.75) Buy


· Price Target: $1.18

· Reason For Update: Capital Raising

· What we know:

AUT’s $35m placement has closed heavily over-subscribed.

Significant demand, lead to an up-scaled two tranche placement (up from $24.75m), issuing 46.67m ordinary shares at $0.75/sh.

The company will look to raise up to a further $6m via issue of 8m shares at $0.75/sh through SPP.

Funds will be applied to the recently revised forward drilling programme - designed to secure existing leaseholds under production - as well further incremental lease acquisition and general working capital.

The increased funding provides additional capacity in the event that continued drilling success further accelerates the programme.

The company has advised that an additional 6 wells will be drilled in CY’10, within the Sugarloaf AMI (AUT – 10%), plus potential for a second well at Ipanema AMI (AUT – 30%). Drilling will commence in July with the re-drill and completion of Kowalik-1 (Sugarloaf).

Similarly, the programme for CY11 has increased from 15 to 25 wells and will focus ostensibly upon the Longhorn AMI (AUT – 25%) with 17 wells planned, whilst 4 are to be drilled at Ipanema and Sugarloaf.

The operator, Hilcorp, have agreed to a JV with KKR & Co to develop Hilcorp’s Eagleford Shale assets. KKR will tip in $400m for a 40% stake; this highlights the increasing focus being provided to the Eagle Ford.

For the full report please see the attached document.

 

[philly]

The operator, Hilcorp, have agreed to a JV with KKR & Co to develop Hilcorp’s Eagleford Shale assets. KKR will tip in $400m for a 40% stake; this highlights the increasing focus being provided to the Eagle Ford.

mir I agree that the JV between HILCORP & KKR & CO should give the SP a kick along as more investors realise the potential of the Eagleford.

The US news report [14/6/10] I saw had this interesting disclosure:
In addition to the development program, the Company [HILCORP] will actively look for opportunities to increase its acreage position in the Eagle Ford through leasing, joint ventures and acquisitions.

What does this mean for the JVP? Could the new JV make a bid for the Aussie JVP's? More interesting times ahead. I hold AUT & ADI

 

[Slipperz]

40 million plus 12 or so in the bank plus revenues from completed wells maybe as early as September ?

Looks like AUT is going to pursue an agressive drilling campaign.

Could lead to a rerating in coming months.

I will looking for any sign of weakness to reenter

 

[Agentm]

40 million plus 12 or so in the bank plus revenues from completed wells maybe as early as September ?

Looks like AUT is going to pursue an agressive drilling campaign.

Could lead to a rerating in coming months.

I will looking for any sign of weakness to reenter

40 mill plus 12 in the bank???

what are you talking about???

some serious miscalculation going on here

aut is not pursuing any aggressive drilling campaign.. if one was about to happen then i think the evidence on the ground would be pretty obvious. i would be hearing some interesting stories from the local and i am not hearing anything like that right now..

imho it is preparing for some short term commitments..

i cant see any evidence of hilcorp being in any position to undertake any aggressive drilling campaign.. i see evidence of hilcorp filling in the missing acreages, and drilling to hold leases atm thats all..

that will keep this jvp very busy atm

 

[Slipperz]

40 mill plus 12 in the bank???

what are you talking about???

some serious miscalculation going on here

aut is not pursuing any aggressive drilling campaign.. if one was about to happen then i think the evidence on the ground would be pretty obvious. i would be hearing some interesting stories from the local and i am not hearing anything like that right now..

imho it is preparing for some short term commitments..

i cant see any evidence of hilcorp being in any position to undertake any aggressive drilling campaign.. i see evidence of hilcorp filling in the missing acreages, and drilling to hold leases atm thats all..

that will keep this jvp very busy atm

Actually my bad it was 6.5 million in the bank last quarter and 41 million from the cr. Plus revenues when Hillcorp have finally recouped their drilling expenses.

At 5 million per well including monies from the jv partners that's quite a bit of drilling no?

Oh and buying more acreages and general operating expenses as per the nr re the cr.

Better get that ear closer to the ground Agentm...the rigs are on their way!

 

[stefan_invester]

hey
just got a quick question,
the trading halt for AUT lasted about 7 normal days..
on the last day of trading before the halt volumes were very low
only 381,999 and once the halt was removed on friday,
there was a huge jump in volume that day, and the sp rallied
from a low of 0.77, with a volume of 2,576,217.

so i am just wondering if anyone knows if this is a sign of things to come?
or whatever else anyone thinks this could mean.

thanks,
Stefan

 

[Slipperz]

hey
just got a quick question,
the trading halt for AUT lasted about 7 normal days..
on the last day of trading before the halt volumes were very low
only 381,999 and once the halt was removed on friday,
there was a huge jump in volume that day, and the sp rallied
from a low of 0.77, with a volume of 2,576,217.

so i am just wondering if anyone knows if this is a sign of things to come?
or whatever else anyone thinks this could mean.

thanks,
Stefan

Depth on the sell side is pretty light atm, could augur well for a strong start to the week.

Or maybe someone wants out on Monday morning?

We'll have to wait and see.....

 

[Agentm]

Actually my bad it was 6.5 million in the bank last quarter and 41 million from the cr. Plus revenues when Hillcorp have finally recouped their drilling expenses.

At 5 million per well including monies from the jv partners that's quite a bit of drilling no?

Oh and buying more acreages and general operating expenses as per the nr re the cr.

Better get that ear closer to the ground Agentm...the rigs are on their way!

lol

when they arrive i will let you know..

atm no sign of them

when you look at aut needing to drill maybe 3 -4 wells in sequence, and then 4 completions all at once!! and if many rigs arrive then the numbers needed to fund this is staggering.. aut has enough to cope with just one rig and leasing requirements..

hey
just got a quick question,
the trading halt for AUT lasted about 7 normal days..
on the last day of trading before the halt volumes were very low
only 381,999 and once the halt was removed on friday,
there was a huge jump in volume that day, and the sp rallied
from a low of 0.77, with a volume of 2,576,217.

so i am just wondering if anyone knows if this is a sign of things to come?
or whatever else anyone thinks this could mean.

thanks,
Stefan

stefan, the share is as you say, pretty oversold.. plenty of aut holders more than happy to exit, about 1.5% in one day

but will the dilution of 54 mill shares impact on the sp in the near term?

180 mill shares on the register..

imho its a heavy cap raising dilution, and you have to weigh it into the equation.. whatever market rationale that is valuing the share at 10% above the cap raising valuation post a huge dilution of 54 mill shares (30% dilution) on top of your 180 mill shares on issue is not known to me atm.. but thats the markets for you hey!!

sitting this one out and waiting to see were this levels out to..

so far you would have to say its pretty spectacular for the cap raising shareholders and those buying more shares in SSP as they can sell into this and fund their new shares easily.. pretty amazing imho.. and good luck to all holders..

 

[mir]

i posted this on HC, i heard there was over $100m demand for the cap raising. i was a sub underwriter for the SPP & was scaled back heaps, I'm pretty sure if all share holders take up the offer ,you will only get $3000 to $4000 worth of shares . the turnbull 1 result due early next week there should be a lot of support .

 

[estseon]

"...over $100m demand for the cap raising..."

Are these investors (persons holding for a period) or professional underwriters?

Just wondered how loose the shares might be.

The revised offer from AWE for ADI (if and when) should help. It will release funds for reinvestment by those wishing to see this project further developed. I suspect that the bid is currently blocking things up. We could see $20m+ chasing shares once the blockage is removed....depending on how much will need to be set aside for tax. Can't guess the split between EKA & AUT - depends on relative prices, I expect.

 

[mir]

estseon
"Are these investors (persons holding for a period) or professional underwriters?"
placement to institutional & sophisticated investors as per announcement.
i believe the presentations were very well received so i hope they are long term holders.

 

[stefan_invester]

not alot of price action happening on AUT over the past 2 days,
im wondering if anyone has any information?

or if anyone knows when any result announcements are
due out, which may help boost the sp a bit

cheerss

 

[AngusSmart]

not alot of price action happening on AUT over the past 2 days,
im wondering if anyone has any information?

or if anyone knows when any result announcements are
due out, which may help boost the sp a bit

cheerss

a 40% dilution and a cr @ 75c dew out. i wouldnt expect much at all for a few weeks. however Turnbull 1H results should be out soon.

 

[Sharejon]

Although I'm not expecting massive gains from a positive turnbull announcement (due to the dilution and cap raising), if good news came out regarding the turnbull wells I'd be expecting to see some sort of positive movement.

 

[AngusSmart]

Although I'm not expecting massive gains from a positive turnbull announcement (due to the dilution and cap raising), if good news came out regarding the turnbull wells I'd be expecting to see some sort of positive movement.

Seems to have kept us above 80c.. and news is out now on turnbull 1 and 2..


LONGHORN OPERATIONS UPDATE
By e-Lodgement
Aurora Oil & Gas Limited (“Aurora”) is pleased to provide the following update on operations at the Longhorn Area of Mutual Interest (“AMI”) within the Sugarkane Gas & Condensate Field, Texas.
Turnbull #1H
The Turnbull #1 well has been successfully fracture stimulated and has been unloading and produced to sales for 10 days. The location of the Turnbull #1 well is the closest well to date within the Sugarkane field to the known oil leg of the Eagle Ford Shale, which is being developed by other participants in the trend. As a result this well is expected to have a higher condensate ratio than that observed from the earlier Sugarkane wells. This higher condensate ratio and continued attempts to optimise the stimulation design has led to different unloading characteristics compared to previous wells, with more of the fracture fluids being recovered during the initial flow. As a result, the hydrocarbon production rates on the Turnbull #1 well have been steadily increasing as the well cleans up and the choke setting has been increased in small steps over a longer period than the other wells. We believe that it might be some time before a maximum initial rate can be determined with the well currently producing over 1,300 barrels of water (fracture fluids) per day. The maximum 24 hour rate observed to date on a restricted choke is:-
Gas Production Rate Condensate Production Rate
Average Daily Equivalent Gas Rate
(mmscfe/d)* 12.63
(bbls/d) Turnbull #1H 1.53 893
(mmscf/d)
* The equivalent gas 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.
In addition, the following comments should be considered:-
• The well is being produced on a restricted choke as part of an ongoing program to optimize the recovery and economics of the wells.
• This is an initial production rate that has been observed during clean up and as such is not yet indicative of a short or long term production profile.
• The well still has considerable fluid to recover from the fracture stimulation and is presently producing over 1,300 bwpd.
• The well is currently producing through the production casing. A production tubing string will be installed in due course.
Turnbull #2H
The fracture stimulation of the Turnbull #2 well has been carried out and the isolating plugs, set after the completion, have now been drilled out. This well will now be unloaded and produced to sales, an update will be provided once a stabilized production rate has been achieved.
Turnbull #3H
The Turnbull #3H well is presently drilling ahead on the horizontal section. There have been some operational difficulties encountered over the last week on this well due to the quantities of gas being produced from what is thought to be a natural fracture along the horizontal section of the wellbore, however these difficulties are being resolved, with drilling due to recommence shortly at a depth of approximately 13,000 ft.
Aurora is the only ASX participant in the Longhorn AMI and holds a 50% working interest reducing to 25% following the completion of the full Longhorn farmin workscope. Turnbull #3H is the third of three new wells required to be drilled and stimulated under the Hilcorp farmin arrangements at the Longhorn AMI.
Yours sincerely
AURORA OIL & GAS LIMITED

 

[Sharejon]

Yes I'm happy to see the SP advance despite the cap raising. It indicates the strength of AUT imo.

(Getting above that minimum post limit!)

 

[condog]

Im extremely happy with the timing and price of the CR

Agent 218M shares and CR of 41M + 8M roughly 50M shares = 22.3% dilution

yet CR adds ability to double well count within 12 months. Cant see a problem myself.

At 25 wells pre CR AUT would have had income of roughly $72M at end of 2011.

They will now have rev of approx $145M at end of 2011. Not bad for a company with current mcap post CR of approx 212M.

In terms of capital cost to drill, its not a huge issue, They now have not only more then enough capital to meet requirements, but also to acquire acerage. You must remmeber they are only paying thier working % of costs and they will have positive cash flow contributing to well costs in around 3 months time. So all drilling costs are somewhat supllemented from cash flow from that point forward.

All looking good. With 25% risk i have it at $2 with 25 wells and $4 with 50 wells at end of 2011.


The fact the CR is so heavily oversubscribed speaks volumes, given its small discount. The SPP will also be majorly over subscribed imo.

Once people have had thier fill and the overnight profit takers clear the decks we will see real value bgin to be established.

DYOR and seek expert advice.

 

[AngusSmart]

Im extremely happy with the timing and price of the CR

Agent 218M shares and CR of 41M + 8M roughly 50M shares = 22.3% dilution

yet CR adds ability to double well count within 12 months. Cant see a problem myself.

At 25 wells pre CR AUT would have had income of roughly $72M at end of 2011.

They will now have rev of approx $145M at end of 2011. Not bad for a company with current mcap post CR of approx 212M.

In terms of capital cost to drill, its not a huge issue, They now have not only more then enough capital to meet requirements, but also to acquire acerage. You must remmeber they are only paying thier working % of costs and they will have positive cash flow contributing to well costs in around 3 months time. So all drilling costs are somewhat supllemented from cash flow from that point forward.

All looking good. With 25% risk i have it at $2 with 25 wells and $4 with 50 wells at end of 2011.


The fact the CR is so heavily oversubscribed speaks volumes, given its small discount. The SPP will also be majorly over subscribed imo.

Once people have had thier fill and the overnight profit takers clear the decks we will see real value bgin to be established.

DYOR and seek expert advice.

So it wasnt a 40% dilution? sounds good, changes how much i was thinking of topping up on then.. On a more important topic How was Newzealand? whered you go boarding? been alot of action on Adi and aut since you were gone!

 

[Assasin]

Could someone please explain to a long time shareholder dummie, just how the CR works. Would like to take up as much of the offer as I can but unsure how?
Enjoy your commentry.

 

[estseon]

Assasin

The information can be read at first hand on the AUT website.

The placement of 30million shares has been executed and the new number of shares in issue is 253.58 million.

The "2nd tranche" (13.67million), in which holders at the record date (which was revised) can buy up to AUD 15,000 worth (20k at 75 cents), is subject to shareholders' approval - meeting to pass the resolution 26 July. The 2nd tranche is fully underwritten.

As I do not live in Australia or New Zealand, I won't have the opportunity to participate and so have taken little interest in the mechanics.

If you do qualify, you should receive notice of the EGM. If the resolution is passed, you should then receive documentation to enable to tender for your entitlement. But that won't be before the end of July so don't harass the postman before. You'll be given time to complete and despatch the tender.

This should broadly coincide with Kowalik (1st or 2nd week of August?). We should have seen all 3 Turnbulls and a new reserves appraisal. I doubt that the underwriters will pick up any shares.