AUT - Aurora Oil and Gas

Nice to see AUT has finally broken out of it's consolidation.

Back onboard the AUT train.

Next stop the dollar!

Just looking at the depth at todays close that might be Mondays stop

cmxd said:

What a beautiful day, what a surprised day, but it shouldn't surprise for AUT lover. It is lucky I topped up again yesterday. I need to thank Condog again, it is your effort to keep me be interested in AUT for long time.

Good luck for everyone!!!

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Cheers, appreciated, but dont blame me if it ever heads the opposite way. Lol.

Seriously make sure you do actually do your own research and seek advice. What suits my circumstances may be completely innapropriate for others. I just say it as i see it.

Seriously though today ive been thinking, i wonder what newbies whove just stumbled accross this stock think, when they way up is it too late, has it all ready run , is thier further gains in it etc.

My answer to myself on this same question and its not necesarily appropriate for you is that certainly the stock carries a lot less risk now then it did when i first invested in it around xmas 2009.

The biggest risks i see is a US recovery hicup causeing a drop in the oil price. Right now that seems under control, but things change quickly and if oil god for bid went back to $30 it would be a tough gig.

The other big risk is having a take over and having to cough up non discounted CGT on your gains.

Then theres the obvious danger risks, operational risks and dry well risks associated with the business.

Having said all that, price wise right now its fair value ot good value imo. With imo plenty more gains left in it. We have stagnated for 70 odd days post the CR and SPP and failed to put on sp gains on the backk of T1, T2, T3 and the Ranch decline news till today. Add to that the oil price has gone up well over 10% in the same time period since we originally hit 88c.

In addition we proved the Longhorn acerage is fantastic quality, weve drilled Kowalick to 6500ft, the M&A elsewhere is hot as hot can be.

So yeh i see lots of value and lots of gains potentially still on offer hopefully over a long period of time. Particularly encouraging is the strong oil prices are so important right now when realistically our company is in a massive transitional phase from explorer to producer. Right now the high oil prices allow us to plough through this most difficult of times with realtive ease. Bringing forward our cash flows and massively increasing our ability to be proactive in our future direction, rather then dictated by questionable economics.

I havent updated my spreadsheets and they may contain errors, but they are posted here on page 17 and i have AUT valed at $1.30 ish as does Hartley and Euroz at the conclusion of 2010. However mine just like thers need updating to consider the much higher oil and gas prices on offer. I have $3.15 as my target for Dec 31 2011. Just changing the oil price alone to $77 and Gas to $5.25 i get $1.50 and $3.49.

Again please please do not rely or act on these opinions or figures, they may contain errors and they are only my opinion which in no way considers your situation. But i hope they help.

The reserves upgrade might or might not make these figures completely irrellevant . As if its big and they go to 2P then it may blow these figures out of the water. Its a bit of an unknown quantity and reaction, but certainly a positive for holders who are in sub 90c imo.

I been wrong before and i will be wrong again so DYOR and seek expert advice.

Slipperz said:

Nice to see AUT has finally broken out of it's consolidation.

Back onboard the AUT train.

Next stop the dollar!

Just looking at the depth at todays close that might be Mondays stop
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Its encouraging, but rest assured sellers will be enticed and it will be harder to get there then what it seems tonight.

EOG Resources Reports Second Quarter 2010 Results

blah blah blah.....

In the Eagle Ford horizontal crude oil shale play in South Texas, EOG also reported consistent production results. The Darlene #2H, in which EOG has 50 percent working interest, commenced production at 1,033 Bopd with 423 thousand cubic feet per day (Mcfd) of natural gas. Recently, EOG completed its first two wells in Wilson County. The Borgfeld #1H and #2H began production at 707 and 836 Bopd, respectively. EOG has 100 percent working interest in the wells. As previously reported, EOG is operating a modest five-rig drilling program while gathering and interpreting additional 3D seismic data. To date, EOG has drilled and completed 31 wells and has 25 wells awaiting completion across its 505,000 net acre position in the Eagle Ford trend's mature crude oil window. Toward year-end, EOG plans to ramp up drilling activity to a 12-rig program and operate an average of 14 rigs during 2011.

Also Worth a Read - On Pioneer our neighbours
http://www.marketwatch.com/story/pi...-2010-results-2010-07-28?reflink=MW_news_stmp

Swift Energy Eagle Ford momentum slows in 2Q10
Published: Aug 5, 2010
The oil and gas independent noted that, in the Eagle Ford shale, two new wells were drilled, and are currently producing in McMullen County. Four operated and one non-operated Eagle Ford shale wells have been drilled and completed well with average initial production tests of 1,152 barrels of oil equivalent per day (boe/d) or 6.9 million cubic feet of gas equivalent per day (MMcfe/d) with approximately 40% of initial production volumes being oil.


Marcellus Shale firms flock to more oil-rich plays.Thursday, August 5, 2010, 3:59pm EDT


Earnings galore this week (and last) showed some firms operating in the Marcellus Shale backing away from the natural gas rush in favor of more liquid-rich plays.
...

Pittsburgh-area Chesapeake exec Dave Spigelmyer said the move is not a pull back but a “diversification” of assets.

The company is increasing its activity in the Eagle Ford Shale, a Texas liquid-rich gas field that’s been stealing some of the sexy away from the Marcellus in recent months.

Cabot Oil & Gas and EOG Resources, both Marcellus players, recently signed a joint venture agreement for 18,000 acres in “the mature oil window of the Eagle Ford shale.”


This Deepwater Company Won't Be Dismantled
By Toby Shute | More Articles
August 5, 2010


Houston rapper Bun B isn't the only one giving a shout-out to the Appalachians these days. On its second-quarter conference call, Anadarko Petroleum (NYSE: APC) tossed out an estimate of "well over one billion barrels of oil equivalent" in risked resource potential across its acreage in the Marcellus shale. That's net to the company, and accounts for the portion vended to joint venture partner Mitsui (Nasdaq: MITSY).

The Marcellus is just one of a handful of resource plays that Anadarko is really starting to ramp up. The shale plays -- the Marcellus, Haynesville, and Eagle Ford -- collectively brought production growth of 75% compared with the first quarter. The Haynesville is clearly the lowest priority right now, with only one non-operated rig running at the end of the quarter. The Eagle Ford, on the other hand, is a major new focus. Anadarko likes the joint venture model so much that it's looking to cut a similar deal down in Texas.


Eagle Ford Shale
Comstock Resources is hedging a little on its reliance on the Haynesville Shale for future growth and has initiated a position in the Eagle Ford Shale in Texas. The company has 18,000 net acres under lease and like every other exploration and production company is focusing on its properties here that are in the oil window of the play.

Comstock Resources is targeting the acquisition of another 10,000 net acres in the Eagle Ford Shale, and will transfer one of its contracted rigs from the Haynesville Shale to start up development in the third quarter of 2010.

Comstock Resources will move slowly in the Eagle Ford Shale, with only 3 wells planned in 2010 at a total cost of $13.7 million. A total of $104 million will be used in 2010 to acquire leasehold here.


AUGUST 4, 2010, 10:30 A.M. ET.Anadarko: To Announce New Shale Joint Venture By Year-End
HOUSTON (Dow Jones)--Anadarko Petroleum Corp. (APC) said Wednesday it's planning to announce a joint venture in the Eagle Ford Shale in south Texas by year end

have a read of this and plug some numbers on AUT. Calculate it for the end of next week or so when Kowalick and Turnbull will be flowing and give them some conservative figures.

USing this method sure makes AUT seem a steal.

http://www.financialsensearchive.com/fsu/editorials/2010/0111.html

Using super conservative figures of 70000 per boe with 3000 boepd and applying 180 wells at just 10% of future value gives AUT a current value of $1.82

Worth a read and think about imo.

condog said:

Using super conservative figures of 70000 per boe with 3000 boepd and applying 180 wells at just 10% of future value gives AUT a current value of $1.82

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Note : error in above calculation

Using 70000, 15% interest in 3400 boepd at 70000 per boe and 180 wells at 14m, current valuation at 10% of future NPV comes out at $1.13 based on 180 wells across acerage.

Using 4000 boepd, @15% , 70000 boepd, 180 wells , 14M NPV, 20%, gives a current valuation of $2.15 using this method.

Using 4000, 15% 70000, 250 wells , 25%, 16M NPV gives a current valuation of $4.10. With 10% NPV for acerage it gives $1.74

These are beginning to be in line with ADI figures. ADI got 42c/23c=1.82 x its price as its TO price.

1.82 x 92c for AUT works out at around $1.67, confirming the above $1.74 is in line with correct valuation based on applying a value to future wells and acerage.

A December 24th report by Peters & Co., a Calgary-based securities firm that is an oil and gas boutique, showed that the average purchase/sale price for oil weighted production in Q4 2009 was $100,000 per flowing barrel.

This is up more than 50% from the Q3 valuation of just over $60,000. (Oil and gas equivalent is the way the industry puts the two commodities into one valuation, usually at 6:1 ratio of gas-to-oil).

The report showed that valuations for natural gas weighted purchases also jumped up more than 50% in Q4, from $35,000 per flowing boe to $54,700

.....

To recap, besides the increasing oil price, the market is seeing these significantly higher valuations because the NPV of these wells has been increasing, especially as improvement in technology – specifically multi-stage fracking – has greatly improved economics. Plus the high IP rates in the new tight oil and gas plays heavily increase NPV.

And as I’ve mentioned in several stories, the industry is still finding ways to increase recoveries, cash flows and NPVs. It’s an exciting time to be investing in the energy sector.

Another reason for high valuations is that these unconventional plays are geologically quite consistent, so the seller is wanting – and getting – more of that near-certain future cash flow. The probability of the buyer producing the maximum theoretical potential of that land is very high. With consistent geology and 3D seismic, buyers have nowhere near the risk they did in deals done a decade ago.

That’s why I’m seeing transactions done as high as $175,000 and $200,000 per flowing boe. And it’s having an immediate, positive, impact on junior and intermediate oil stocks in Canada.


From: http://www.marketoracle.co.uk/Article16413.html

Using $100,000 per boepd from AUT and 25% valuation of its acerage with 180 wells to spud I get a TO valuation of $2.69. Assuming thats a 50% TO premium, then its valuation to a holder right now using this method is $1.79...... just throwing them out there for inteligent discussion. Pls cross check, as may contain errors.

AUT Gets Coverage in the Australian on 19th July with $1.64 Valuation

Wall is also very bullish about Aurora Oil & Gas (AUT) and its onshore Texas operation; he has put a $1.64 a share valuation on the stock (against Friday's close of 85.5c).

So, because investors are obviously now listening to the US story, we felt we should tell you what else Wall has reported from his recent visit to various Australian operations in the home of the brave.

Well worth a read, covers a number of other junior oilers including SSN, ETE, SEA which i really like but dont hold, AMU, STX, EKA, KTA and a heap of other minows from resources like IMA DRX and a few more Haselhurst stocks.

http://www.theaustralian.com.au/bus...us-drill-stories/story-e6frg9ex-1225893643800

DJIA down 21 overnight after being tripple digits on unemployment numbers early in the session. There are clearly jobless issues with only the manufacturing sector adding numbers. Finance and construction are still shedding jobs. The overall % hasnt fallen, but thats partially due to people leaving the workforce, due to retirment etc.

Oil fell sharply by $1.30 to hold over $80.70 which is fine.

This comsec screen dump similar to that posted above by Slipperz paints a pretty picture for monday if the weekend holds up. 1.4M v 137.9K imbalance

93.5 offer, but realistically 94c, looks nice again, havent seen that for a while, it used to be the story we saw most mornings. Welcome back i say.

Remember the pre CR days, hey if you want AUT, pay up casue now one wants to sell. Be nice if they are back wont it.

That depth reminds me of six months ago!

I think we are cleared for liftoff now.

Resistance has been smashed on increasing volume.


If the buyers keep coming on Monday there is surely going to be another price spike.

The way i'm seeing that chart (and I'm just speculating here) the last little selldown I highlighted on increasing volumes might have been the final washout from the SPP?

Might have spooked a few on the sidelines an kept a lid on the action for a few days?

All done with that now , time for the next leg up!

Personally, I'll think about selling out/profit taking around the $1.02 stage. Will net around $2,000 however will get hit %43 CGT. See how it goes. Screen dump does look good for Monday condog.

BrightGreenGlow said:

Personally, I'll think about selling out/profit taking around the $1.02 stage. Will net around $2,000 however will get hit %43 CGT. See how it goes. Screen dump does look good for Monday condog.

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John why exit at $1.02, have you something better to invest in, do you think thats its limt, why???

Without quoting actual holdings take this philosophy. Trader A buys invests $5000 in to 10000 AUt at 50c and sells 10000 AUT at $1 6 months later. She pays 43% CGT on the $5000 profit leaving a net profit of approx $2850.

The sp drops to 95c and Trader A rebuys AUT with his original $5000 and the $2850 profit. Trader A now holds 8263 AUT shares. Due to prematurely selling and being taxed.

Even if trader A chooses to reinvest in a different company say SEA for example. Trader A can buy 26166 at $30c, but only has the leverage of $7850 worth of stock working for her.

This is fine if SEA has been identified as having significnatly higher growth prospects then AUT. But ti must be more then the lost leverage of the $2150 worth of leverage given up in premature tax paymnet to warrant making the shift. ???

Some might find this free little spreadsheet for valuing oil and gas investments handy. I havent used it just it looked ok. Uses excel. Note please virus check as I and ASF take no responsibility for it.

If you work out the units bit post it on here please.

http://www.topshareware.com/Oil-Gas-Investment-Calculator-download-43768.htm

Nice find condog.

Currently enjoying a few beers and doing some charting.

AUT is looking the goods now!



This new chart reflects one quarters trading and leaves behind the pre hillcorp era and instead focuses on the results from the drilling campaign since then.

The upper trend channel is bordered by the morgan result on June 4th.

Only took the directors five days to decide to cap raise after that result!

Any further production successes will put us back in the upper trend channel pretty quickly imho.

Resistance now 88 cents and a fair point for a stop loss.

Hey slipperz yeh its certainly looking brilliant on both a fundamental and technical basis, with plenty of news to drive its sp as well. Kowalick and T3 are due, as is the reserves upgrade possibly the following week.


I see this as its channel. Since hilcorp took over the majority of its time is in that channel. With the exception of the artificially low consolidation of late caussed by oversupply of sellers post Cap Raising and SPP.

Hence i see it making its way back into that channel pretty quickly now that supply has returned to normal levels. I honestly think we will be breaking through the dollar this week, and if not on the news the following week. I could be wrong. But it certainly looks overdue imo.

I been wrong before, so do your own research and seek expert advice.

Even using the 3 month channel which is largely shaped by the consolidation from the Cap raising and SPP, its most likely imo to return to the top reaches of that channel.



A clear breakout signalled late last week witht he change in volumes, and confirmed this week.

Look at the 5 day breakout. Combine that with the buy sell imbalance and its looking like establishing itself in the 95-98c range on monday. This is only a guestimate so dont rely on it.

condog said:

Look at the 5 day breakout. Combine that with the buy sell imbalance and its looking like establishing itself in the 95-98c range on monday. This is only a guestimate so dont rely on it.

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I won't be at all surprised to see us back in the "morgan channel" soon.

It's really the effects of the CR that kept a lid on prices these past six weeks.

Ultimately though in one quarter AUT has gone from 65 to 92 cents.

Without the CR I daresay we'd be at 1.20 right now.

As you pointed out T3 and kowalik flow rates due soon which should propel us to the 1.20-130 mark then the reserves report which should drive us up towards the 1.60 mark as per the analyst reports.

given that AUT seems poised to trend upwards in the near future, pending news related to T3, the Kow, and reserve upgrades. Other than announcements re. Kow frac / flow rates the other news relates specifically to AUT.

In previous times the "accepted" ratio between AUT and EKA has (to the best of my understanding) been 4 to 1. Taking into account recent SPP by both AUT and EKA and any other factors that may impact on the ratio between the two ......... an thoughts on an updated ratio ???

I was / am considering the possibility of AUT making a bid for EKA via a "share swap" arrangement

without puttin you on the spot Condog I thought you might be just the person ta add up a few fundamentals and offer an opinion ...TIA

Cheers

disclaimer : LTH both AUT and EKA

I think Nokia and MIR and Slipperz are well tuned to answer this as well.

My opinion and its only an opinion, is that EKA is a prime take over target for someone, as will AUT. But i think a big player will TO AUT much later. Where as EKA is an easy acquisition for virtually anyone.

The 1:4 ratio no longer exists in my opinion, why, cause AUT acerages is now sured up, derisked and funded for drilling, hence AUT imo has a value exceeding about 6:1 at a rediculous minimum.

Nokia will have something sure to say and it would pay to listen , hes the expert on the swaps.

But part of my rational is that EKA lacks the acerage, the funding and the wells to be drilled in 2011. But it does have a more likely , sooner TO premium slightly built in imo.

Nokia MIR Slipperz .... over to you...