AUT - Aurora Oil and Gas

[condog]

Longhorn is hsaping up as a magic result for AUT. So far both are only IP's but they are very good figures on "highly restricted chokes"

Turnbull 1
893bbls/d condensate and 12 mmscfe/d on a highly restricted choke is a very good result so far.


Turnbull 2
526bbls/d condensate and 7.71 mmscfe/d on a highly restricted choke is a very good result so far. awaiting an update on T3 and reserves upgrade.

Given 65% of AUT interest lay in Longhorn with a post farmout interest of 25% these are absolutely fantastic results in my opinion.

AUT has 25800 gross acres in longhorn which is 6450 net acres. Longhorn is earmarked as oil and thus requires 320 acre spacing. 20 net wells to AUT to cover the leasing with most to be done in 2011, according to Hartleys.

At these sorts of rates with those liquids ratios and current prices these are very economic imo.

 

[nunthewiser]

mmmmm. and the sellers are controlling the action yet again i see even on "apparently" good news.... still early in the session for today so will continue to monitor the action for any change.

Buyer depth looking mighty shaky also with gaps all over the place at present.

Be intresting to see how much stock may get dumped when the new stock is released to market.

I wonder if the cap raising will be fully subscribed or if there will be a shortfall in these uncertain times.

Still no entry signals or reasons to enter for ME as yet but will continue to monitor and post my thoughts as they arise.

 

[Kremmen]

There could be/would be very serious consequences if ground water supplies were irrevocably contaminated. At one level it could spell financial disaster for the companies doing the drilling and of course create some havoc with communities relying on underground water. Think about irrigation or underground streams flowing into reservoirs.

That's one of the great things about the AUT area. There's bugger-all there. If the water gets contaminated in the middle of nowhere, who gives a damn? Companies can buy off the locals with bottled water and a pile of cash and it's still petty cash to the drillers and everyone's happy. I'd be worried in some of the areas in other states which are too close to areas with higher population densities and/or other industries.

 

[condog]

That's one of the great things about the AUT area. There's bugger-all there. If the water gets contaminated in the middle of nowhere, who gives a damn? Companies can buy off the locals with bottled water and a pile of cash and it's still petty cash to the drillers and everyone's happy. I'd be worried in some of the areas in other states which are too close to areas with higher population densities and/or other industries.

Its early days for the entire technology, but yes its encouraging to have AUT acerage located where it is.

mmmmm. and the sellers are controlling the action yet again i see even on "apparently" good news.... still early in the session for today so will continue to monitor the action for any change.

Buyer depth looking mighty shaky also with gaps all over the place at present..

Not sure what your looking at for depth, its been pretty much like this all day.

right now its green, so im not sure how you arrive at that conclusion, although for me and plenty of others i really dont care wh controls it today or tommorrow, we are looking at the underlying value beeing further established by terrific announcments like todays.

I wonder if the cap raising will be fully subscribed or if there will be a shortfall in these uncertain times.

The CR was way over subscribed, i think you mean the SPP. Rumour has it its way over subscribed as well, although i dont know how or where they found that out, or if it has any semblence of truth.

In my opinion todays announcment is another derisking of the entire project. It confirms the quality of the entire acerage. AUT now have 8 from 8 exxtremely encouraging well locations, all with high liquids content.

Sure as a very short term trader, Nun and a few others may see no entry signs and thats fine, but looking at it from a longer term investment based on fundamentals, this de-risks the play further and in particular the very substantial and higher interest Longhorn acerage, leaving only questions about Ipenema.

another substantial move towards a reserves upgrade. Im guessing Ipenema willl allow the calculation for reserves upgrade in around 3-4 weesk from now.

 

[happytown]

...

The CR was way over subscribed, i think you mean the SPP. Rumour has it its way over subscribed as well, although i dont know how or where they found that out, or if it has any semblence of truth.

...

feel free to acquaint yourself with the forum position on the posting of unverified/unattributed rumours on asf, no matter how they may be couched

Posting unverified rumours on ASF is simply not on.

If you are not prepared to identify your source or confirm a rumour with the company involved then please do not post it on the forums. Just for the record, anonymous forum chatter and unidentified 'friends' or 'associates' do not qualify as a legitimate source.

Some rumours, of course, do turn out to be accurate but many are simply made up and used to ramp stocks up or down. It is this aspect that troubles me and is the reason I do not want them posted here at ASF.

further

Perhaps the word 'unverified' was a poor choice.

What I mean, is that if people are going to post a rumour on ASF, it has to be attributable to someone and they have to be able to demonstrate that with a link or a reference to a published source.

Personally, I would prefer that people stuck solely to verified information but I understand that is a little unrealistic.

the no unverified/unattributed rumour posting thread can be found at

https://www.aussiestockforums.com/forums/showthread.php?t=5917

 

[eopiela]

That's one of the great things about the AUT area. There's bugger-all there. If the water gets contaminated in the middle of nowhere, who gives a damn? Companies can buy off the locals with bottled water and a pile of cash and it's still petty cash to the drillers and everyone's happy. I'd be worried in some of the areas in other states which are too close to areas with higher population densities and/or other industries.

I "give a damn." I'm a landowner in the AUT acreage (e.g. both the surface and mineral interest for half of the Morgan well unit, a good deal of the Kowalik well unit, and almost all of the Rancho Grande well unit) in Karnes County, and you are mistaken if you think I can be bought off "with bottled water and a pile of cash." Moreover, I'm in a political position to really make the operator's life very difficult from a state regulatory perspective if they happen to negligently contaminate my groundwater. Just because the area is relatively more sparsely populated compared to the Barnett Shale and other areas, doesn't mean the operators are absolved from liability if they mess up, it just means there's less plaintiffs in the coming lawsuit sharing in the recovery. I will note that none of the leases in effect on the AUT acreage have limits on lessee liability for environmental damage, and new leases/renewals I draft for landowners in the Eagleford acreage have the following clause, "Lessee shall take all reasonable and necessary steps to protect Lessor’s wells from contamination, and/or loss of quality, or quantity of ground water under Lessor’s land due to Lessee’s operations." This creates a contractual liability for the operator to be responsible; you contaminate my groundwater, you lose your lease. Venue for any disputes under the leases are all in the local courts. Therefore, please refrain from smug comments like that quoted above. I'm happy a lot of people on here are about to make a lot of money on this play (as a landowner I hope to as well), and I appreciate the insight some of this discussion has given me about the play--however this is a serious issue; one which is just beginning to come to light in some of the other areas where shale fracturing has been employed, and deserves your research, because the door is rapidly closing on shoddy operators. I have some concerns regarding casing integrity after what happened on the initial Kowalik frac job that went awry, and you should too as an investor. Since Hilcorp moved in the operation has been much more professional, but that doesn't mean that investors should dismiss this as a concern--both the US Congress and the Environmental Protection Agency are seriously considering federal regulation (google Barnett Shale Hearing), and while Texas has refrained thus far, we can change that if necessary.

 

[Joe Blow]

I would just like to remind everyone of the rules when it comes to posting in stock threads:

• Do not post any rumours unless they have already appeared in the mainstream print or broadcast media. A reference must be supplied.
• If you make an assertion (e.g. post a price target or call a stock a "dog") you must also provide reasons to support your point of view.
• Never advise others to buy, sell or hold a particular stock. Present your analysis by all means, but leave the financial advice to licensed financial advisers.
• No personal attacks or insults. Stick to discussing the facts and analysis. Treat all other thread participants with respect at all times even if you disagree with them.
• Please report any post that contravenes the above guidelines.
• Relax. If you feel yourself getting annoyed by someone's posts and they're not in violation of the above rules, take a deep breath, step away from the PC and go outside and take a break! Keep it all in perspective.

 

[condog]

All this talk about AUT falling over is completely unfounded. LAcks any foundation and facts.

Its just had almost 20 days of consolidation while the market took a turn for the worse. Its withstood the selling inspired by an 8-10c discounted SPP.

Its up for the day, turned back up for the 5 days, up for the month and up for the 3, 6 and 12 months.

Its got 8 from 8 wells flowing this year with fantastic rates.

Its got an accellerated program and the cash to proceed with it.

Its got one of the best operators in the entire Eagleford.

Its got the two best wells in the enetire eagleford.

Its latest two wells on turnbull are flowing on highly restricted chokes above unrestricted rate by most its neighbours.

Theres been a lot of damage done is this thread this week that is completely and utterly unfounded.

Heres the graphs as proof.

Closed up 1.5c for the day

5 Day Graph has turned up on the back of a successful CR and most likely positive SPP result.


1month graph up


3 month graph up


1 year graph up


In the last month it has drilled and fracced 3 wells, in the next month its drilling and fraccing approx 2 wells and will recieve a reserve upgrade according to the Hartleys report of around 300%.

Every new well delivers a de-risking as it delivers another income source , a rise in NPV and justifies the investment on that well.

The facts and figures in support of this stock are amazing.

The period of consolidation we have just had is excellent, brining in a lot of new holders and traders at a much higher level.

Again key risks are political intervention in the fraccing process, the oil price and the risk of global markets.

 

[nunthewiser]

If one checks todays course of sales they will see todays close was made on minisicule volumes ( around 7k ) which bumped up the price and % . I for one pay no creedence to this action as it was obviously a manufactured close in my book but hey thats MY book and not to be confused with current holders outlook on this stock.

PERSONALLY i still see NOreason to enter yet as it neither has shown ANY strength to bust through or attempt to bust through previous resistance levels and maybe being currently propped up for sellers to have a low volume market in which to leak their stock into without causing any major hiccups ( easy to do if one knows how to play the depth shuffle and games).

However i could be wrong also and my targets given previously may not be reached , however based on MY observations of the action on this stock i have no reason to doubt my analysis as yet.

Its quite intresting watching the SELF PERCEIVED pump and dump sales throughout the day on this stock but maybe i might be reading it wrong

I still cannot find a reason to enter at current prices and thats my view until the supply stops feeding it at these levels

 

[nunthewiser]

Just using a chart previously supplied, i would like to point out the variations in trendlines available to others looking at other time frames.The dark blue line indicates the 1 year trend as the actual original chart producer drew up, i have merely extended that line to be up to date.

the yellow lines indicate previous support and resistance.

the light blue line indicates MAJOR resistance that as so far cannot be broken.

The red line indicates where i feel the true trend is ( please forgive it being bent at the beginning)



sorry if my chart is a little bit confusing but i will try and use my own one next time .

 

[estseon]

eopiela

I don't think that many take the matter lightly.

I was under the impression that TRRC enforced strict rules requiring casing to below the aquifers.

Kowalik (1) was drilled using under-pressured mud and slotted liner was used. The thought at the time, shared with CoP drilling on Live Oak (TCEI is a partner in that operation), was that the formation was sufficiently fractured to produce commercial flows without the need to fracture stimulate. The well initially flowed commercially from the bottom end of it but then it was given a chemical wash and it never quite recovered. Hilcorp tried to remove the slotted liner but, not surprisingly, was unable to drag it out. That well was not completed for fracture stimulation.

Kennedy had problems with part of its casing which meant that the re-stimulation could not be completed but that well had been fracture stimulated about 6 times before and one of the earlier attempts (not by Hilcorp) had to be aborted because of extraordinarily high pumping pressures. That was possibly when the casing was damaged.

I don't think that anybody has been cutting corners - it's just that it is a challenging formation and Hilcorp has made it look disarmingly simple to drill and to complete.

 

[Sean K]

the light blue line indicates MAJOR resistance that as so far cannot be broken.

I actually like the look of this set up and would take a stab at buying it within that triangle waiting for the beakout. Sell if it broke the lower line. I'd prefer to wait till it broke up, but it's in a clear uptrend, obviously.

 

[condog]

The 12 month graph is below with rationale attached as to some of the changes in patterns.



AUT until April 2010 has operated on very low volumes and been very tightly held. After Hilcorp took over they have set a crracking pace with multiple successful wells back to back at shorter and shorter times.

In addition the results from each well have basically got better and beetter, culminating in Rancho and Morgan the two best wells in the entire Eagleford Shale to date, then Turnbulls affirming the high quality liquids in the north west longhorn acerage which makes up 65% of the play for AUT and where they hold a 25% interest.

Applying some sort of rational and reasoning its easy to see why the trend changed.

Then at point D, the overall market took a major tumble on fears of a US tumble and possible GFC2. Even during that time AUT showed its strength.
Only dropping around 9%.

Speculation began about the need for a CR which eventuated at point E, closely followed by a 10c discounted SPP @ 75c.

Despite all this AUt has held its own. Now showing clear signs of sp growth returning. Undoubtably some recipients of Cr or SPP shares will chose to sell in the shorter term and there will be added selling pressure.

However there is no evidence to suggest the current sp is over valued.

When comparred to all the recent M & A activity in the Eagleford from the last 4 months AUT is significantly under valued at 84c.

On its charts it has had a long period of consolidation with massive volumes establishing a signiificant new resistance level around the 78-84c level.

Using a trendline that takes into account reasons rather then nothing but a simple one line with no rational, its actually under valued and sitting below the trendline.

AUT is up for the close, up for the last part of the week, up for the mont, up for the 3 months, up for the 6 months.

The alternative argument being put forward carries no evidence to suggest its true or warrented. The sellers are not in control of the day, the 5 days, the month, the 3 months, the 6 months or the 12 months. Sure they have been active as one would expect on the back of both a CR and SPP. The buyyers still have 150% more then the sellers.

The week following the issue of the new shares will of course have more activity. But for those sitting on the sidelines hoping to pick up cheap shares, theres also the risk of the reserves upgrade which is due in July. My thoughts are they will wait for IP's on the Ipenema acerage, but if its scheduled in and booked inthey could doi it hust using the existing wells.

hartleys project a 300% upgrade from a figure that was calaculated on a 7% recovery basis to a figure of 22% recovery.

Similarly Hartleys says to expect regualr upgrades in thier price on the back of the amazing results coming out from hilcorp.

Already we have seen one more spectacular flow from Turnbull 2 since hartleys and Euroz released thier figures. Next week we are likely to get IP's on T3 and soon after Kowalick plus the Reserves upgrade.

I personally dont buy any of this doom and gloom being cast upon this stock. I think its good to question people but provide evidence and reasons, and whilst i find this debate frustrating it is healthy.

I have made a lot of money on the share market, I have never seen a stock with better immediate potential then AUT right now , but given that there are still risks associated with the drilling, fraccing, political, environemental, overall market and energy prices, so seek expert advice and DYOR.

I just hope the doom and gloom Nun is presenting doesnt cost people a lot of money, similarly the optimism i presnt. They are both only opinions. However i do feel my case is supproted by significantly more reasons and evidence. In my opinion the counter argument is reliant on one graph and one trendline, its not taking anything else into consideration. Despite counter arguing for over three pages we are yet to see any evidence from the doom and gllom side to see why he thinks his case is correct other then a few lines with no reasoning or evidence.

I have however sensed a significant softening in his stance, which has possibly been brought about by the three days of renewed buying pressure being applied to AUT.

Make your own decisions, seek expert advice, its your money. AUT is a bloody great stock in an incredible growth pahse, with a brilliant operator, in the hottest shale play in the world right now, with the best two wells in that play, possibly the best 4 if Turnbulls where allowed to flow unrestricted. Theres not much wrong with it when evidence and reasons are used.

I take absolutely no objection to Nun presenting his graphs for a completely different timeframe, but if he and others are going to come in here and make amazing claims such as AUt is about to fall out of the sky to 40c like they did a few days ago it needs to be backed up by evidence, not a simple trend line that has no consideration for the development that has occurred.

So far it has not had any evidence and is completely and catogorically misleading unfounded and untrue. Reckless in fact.

 

[nunthewiser]

I actually like the look of this set up and would take a stab at buying it within that triangle waiting for the beakout. Sell if it broke the lower line. I'd prefer to wait till it broke up, but it's in a clear uptrend, obviously.

cheers Kennas and tottally agree on the setup , i PERSONALLY find that entry at the top of this triangle is too much of a high risk to reward area as in the % loss on natural stopout points is of too high a nature.

i PERSONALLY am happy to wait and see if it breaks first.

 

[Slipperz]

cheers Kennas and tottally agree on the setup , i PERSONALLY find that entry at the top of this triangle is too much of a high risk to reward area as in the % loss on natural stopout points is of too high a nature.

i PERSONALLY am happy to wait and see if it breaks first.

Monday will be a keytest after the dow's breakdown yesterday.

Although from a technical perspective this week has ended on a positive note imho.

This week saw us move sideways from the strong 8 day uptrend, retrace a little and then two good indicators a doji followed by a green candle.

The trading range has now widened a little with resistance at 89 cents minor support at 82 cents and major support at 74 cents.

 

[nioka]

At the risk of sounding like a broken record I'll say again " Charts represent the past".To me, using charts is an effort to have hindsight and a crystal ball.

With AUT the past will be completely different to the future. Each movement on the chart can be explained by an event in the past, events that may or may not be repeated. The past is influenced by an operating partner that has been replaced with Hillcorp. The difference is a case of chalk and cheese. The recent past has been influenced by AWE and their opportunistic bid for ADI. They are now out of the way. The extra leases that AUT has that other partners have not had any interest in have only recently been drilled. So far this drilling appears successful but the charts are only just starting to be influenced by that drilling.

AUT is a stock that should be valued on fundamentals alone. The fundamentals are improving day by day and I see no reason why they will not continue to trend higher and higher. Personally I do not consider them a stock to trade but rather a stock in which to invest either short term or long term and that is how I have approached AUT.

 

[condog]

At the risk of sounding like a broken record I'll say again " Charts represent the past".To me, using charts is an effort to have hindsight and a crystal ball.

With AUT the past will be completely different to the future. Each movement on the chart can be explained by an event in the past, events that may or may not be repeated. The past is influenced by an operating partner that has been replaced with Hillcorp. The difference is a case of chalk and cheese. The recent past has been influenced by AWE and their opportunistic bid for ADI. They are now out of the way. The extra leases that AUT has that other partners have not had any interest in have only recently been drilled. So far this drilling appears successful but the charts are only just starting to be influenced by that drilling.

AUT is a stock that should be valued on fundamentals alone. The fundamentals are improving day by day and I see no reason why they will not continue to trend higher and higher. Personally I do not consider them a stock to trade but rather a stock in which to invest either short term or long term and that is how I have approached AUT.

Here here. Finaly some commonsense in this thread from someone who actually knows the stock. Where on earth have you guys been hiding. esteon and MIR are mia at present. Thertes morte to a stock then a vacant trendline. Trendlines and resistance linjes are merely a guide. A piece of the puzzle so to speak.

Yes - AUT has till now very much been a fundamental news driven stock. Its tightly held and in the interim will certainly other then a few traders whove been attracted remain so.

 

[condog]

Second Quarter Oil & Gas Deals Top $42 Billion as Companies Pile into Shale Gas

The pace of M&A activity in the global E&P sector sustained the momentum of the first quarter with $42 billion of E&P deals announced in the second quarter of 2010.


In total $12 billion worth of US shale gas deals were announced which represented over one quarter of global E&P deals.

From
http://www.i-newswire.com/second-quarter-oil-gas-deals-top/48919

 

[mir]

condog
definitely not MIA , talking about fundamentals to the chart gurus is pointless , i don't follow charts but i can see on Monday if AUT drops they will claim their charts were correct (even though the dow got smashed).i've followed AUT from day 1 & have never been more confident ,nioka explained it very well .the way i see it there is a lot of institutional interest & there will be a lot more after the reserves upgrade.operationally you couldn't ask for more than hilcorp & our acres are probably the best in the eagleford
"Texas Crude – Insights into Quality of AUT Acreage
We spent time with one of the geologists credited with the discovery of the Eagle Ford, who works for Texas Crude, one of AUT’s partners. The quality of the acreage was confirmed by comparative well data showing best initial production in the play and best 30 day flow rates for both oil and gas equivalent, all of which occurred within the area in which AUT has an interest.
We expect a strong maiden reserve report later this month as well as continued successful drilling results" the majors are happy with less .
i almost forgot we now have enough cash to keep up with hilcorps forward drilling program & i can't see any dry wells.

 

[condog]

Thanks MIR, good to have you back.

Slipperz nice to see som logical technicals on here at last.

That major resistance at 74 has been present for a week or two now since the 75c SPP was announced and we rebounded above it.

Im still firmly with Nokia that we are fundamentals and news driven at present. But for the technical traders , thats a far more accurate and realistic perspective then those recently being purported. With a nice flag formation and fundamentals in place for a positive breakout of the flag pattern.