AUT - Aurora Oil and Gas

[condog]

A very small snippet fromthe Eureka report to avoid copyright:

Here's a rundown of all the PMIs for August that came out this week, with the previous month in brackets:

Global, 53.8 (54.3)
US, 56.3 (55.5)
Europe, 55 (56.7)
Australia, 51.7 (54.4)
China, 51.9 (49.4)
Germany, 58.2 (61.2)
UK, 54.3 (56.9)
France, 54.7 (53.9)
India, 57.3 (57.6)
Taiwan, 49.2 (50.5)
Korea, 50.9 (53.2)
Japan, 50.1 (52.8)

PMI = Purchasing Managers Index, above 50 = expanding, ie = good for that economy. Every Major economy including Global, except Tiawan is expanding. Most importantly, The US and Europe are well above 50. A really positive sign.

It doesnt mean we are racing ahead, it just means where growing and not heading into recession imo.

Peak Oil here we come in 2011, is my guess, im picking it now and i know i will get bagged by sceptics. But im saying $100+ oil by mid 2011.

Im also saying right now i reckon the chances of a US double dip are out of mind for the next few weeks. These figures and the employment figures released today paint a better picture then the one weve been sold for the last two weeks.

Whils short term oil might suffer till inventory clears, the futures from mid 2011 will start to rise imo. Ans AUt will go with it imo

The other thing is all those cashed up balance sheets courtesy of the greatest shift of debt in history from enterprise to governements might just now start to fuel the biggest round of M&A activity we have ever seen, particularly in agriculture and energy. Just my

More news from AUT this week on spuds and fracs imo.

 

[Slipperz]

A very small snippet fromthe Eureka report to avoid copyright:


PMI = Purchasing Managers Index, above 50 = expanding, ie = good for that economy. Every Major economy including Global, except Tiawan is expanding. Most importantly, The US and Europe are well above 50. A really positive sign.

It doesnt mean we are racing ahead, it just means where growing and not heading into recession imo.

Peak Oil here we come in 2011, is my guess, im picking it now and i know i will get bagged by sceptics. But im saying $100+ oil by mid 2011.

Im also saying right now i reckon the chances of a US double dip are out of mind for the next few weeks. These figures and the employment figures released today paint a better picture then the one weve been sold for the last two weeks.

Whils short term oil might suffer till inventory clears, the futures from mid 2011 will start to rise imo. Ans AUt will go with it imo

Oil is critically important to the global economy.

It is also finite as peak oil proponents glady point out and at some point in the near future it will revalue as a commodity.

I would expect to see many small to medium cap oilers getting rerated as this eventuates in the near future.

 

[condog]

Oil is critically important to the global economy.

It is also finite as peak oil proponents glady point out and at some point in the near future it will revalue as a commodity.

I would expect to see many small to medium cap oilers getting rerated as this eventuates in the near future.

Yep the key thing is this. If peak oil is a sham, then these companies will probably turn out to be great investments anyway. If its true, which it appears to be imo, and many more of the consensus view, then who can afford not to have oil stocks as a hedge.

One things for sure if peak oil evolves, as the pentagon, US military, UK military, german military and many others have said could evolve as early as late 2011, then i will still be driving my car, and in fact i might upgrade to a ferrari. .... these stocks imo are not only the best investments i can find, but they are a rediculously cheap insurance policy against peak oil.

 

[condog]

Eagle Ford Shale Exceeds Expectations
September 3, 2010

While many shale gas plays suffer under oversupply of shale gas and resulting low NG prices, the Eagle Ford shale play has exceeded expectations due to growing crude oil and associated liquids-rich natural gas production

Then blah blah blah not worht reading......

http://www.glgroup.com/News/Eagle-Ford-Shale-Exceeds-Expectations-50363.html


Permian Basin, Eagle Ford Shale are hot drilling centers in Texas


With natural gas prices dropping below $4 per 1,000 cubic feet, the Eagle Ford has become an increasingly appealing area because substantial portions of it also offer opportunities to recover higher-priced oil, condensate and natural gas liquids such as ethane and butane.

Energy companies from large to small are taking stakes in the Eagle Ford, where approximately 90 rigs were running in mid-August, a level of activity roughly on par with North Texas' Barnett Shale, the largest gas-producing area in the U.S.

The Eagle Ford has become "a very active marketplace for transactions" and "large-acreage positions are garnering premiums," said Chris Simon, a managing director and energy investment banker for Raymond James & Associates.

"There are still 13 to 14 deals out there on the market," he said. "It's going to be a very active area for deals for the rest of this year," he added.


Read more: http://www.star-telegram.com/2010/09/02/2442683/permian-basin-eagle-ford-shale.html#ixzz0yYdkHWqN

Natural-Gas Futures Rise After Jobs Report Signals Increase in Fuel Demand

Natural gas futures rose the most in seven weeks after companies added more jobs than forecast in August, raising speculation that fuel demand will rebound as the U.S. recovers from the deepest recession since the 1930s.

The fuel gained as private payrolls climbed 67,000, after a revised 107,000 gain in July, Labor Department figures showed today. The median estimate of economists surveyed by Bloomberg News called for a gain of 40,000. Traders project that natural- gas demand will rise because it’s cheaper than coal, said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston.

“The natural gas market is reacting to improving fundamentals,” Larry said. “Natural gas has been so undervalued against coal that demand and prices are bound to increase.”
........

http://www.bloomberg.com/news/2010-...s-report-signals-increase-in-fuel-demand.html

Chinese oil demand 'still strong'

Chinese oil consumption could be set to increase further over the next few months as the country's economic performance gets back on track, driving prices up and adding to the worries of struggling motorists across the world.

http://www.thefuelcardpeople.co.uk/... fuel card/Fuel card news: Chinese oil demand


Peak Oil Worth A Read
http://www.marketoracle.co.uk/Article22419.html

The sooner the public wakes up to this situation the better, not only for AUt, but for alternative energy funding and economic sustainability.

Rememebr we where at $120 per bo prior to GFC, the GFC has only harmed supply not helped it.

not sure i agree with the graph, i believe the price will help alieviate some demand, stopping transition to poverty.

 

[condog]

Crude oil price forecast next week, oil to trade lower?
Oil prices could be in for another roller coaster ride next week and end the week trading lower as US refineries perform the annual 2010 maintenance, reducing oil demand.

 

[condog]

Macroeconomic indicators - Chinese manufacturing figures ease fears of slowdown

China Daily quoted analyst said manufacturing in China rebounded in August easing fears of a steep correction to the economy.

The China Federation of Logistics and Purchasing said the Purchasing Managers Index a major indicator of economic activity rose to 51.7% in August up by 0.5 percentage points from the July figure and reversed a three-month fall in the growth rate. The index considers 50 to be a benchmark figure and the dividing line between economic expansion and contraction. Anything above 50 indicates expansion.

http://www.steelguru.com/chinese_ne...ng_figures_ease_fears_of_slowdown/163556.html

 

[condog]

T3 2nd frac phase flows out at a staggering 819boc pd.

Patinio drilling ahead with the horizontal section, is at 15,000 ft plus.

One more Ipenema well before endo of 2010.

 

[Sharejon]

Yes, when they up their drilling schedule- that should bring some good times.

 

[condog]

A Small Snippet From Laetst Euroz Update - Thanks to PRGudula

Movement through the reserves classifi cations is more a function of time taken for fi eld development, rather than risk.
Current levels of activity should result in a majority of 3P res’v converting to 1P and 2P category in the next 12-18mnths.
Upside to reserves will (in time) be a function of closer well spacing; multi-lateral subsurface development; and enhanced ultimate
recoveries and decline rates as a function of improving development techniques.
Recent Turnbull-3H results imply potential for a 2 to 2.5x improvement to early stage production following application of a new
completion design.
Consequently, production results from Kowalik-1R, Luna-1H (Sugarloaf – AUT 10%) and Petina-1H (Ipanema – AUT 30%) should benefi t
from the new completion process, results are expected through Sept.

......
Netherland and Sewell’s NPV10 of US$986m on the current fi eld development plan compares favourably to our risked (25% of gross
production) NPV10 of A$435m.

.......

Consequently, this suggests on a post tax basis, AUT has the potential to double over next 12-18 months.

.....

Our $1.50/sh valuation remains heavily risked: on-going strong drilling results will directionally underpin a valuation well in
excess of $2/sh. BUY

 

[condog]

Its news headlines like these we want to see as AUT investors

World markets rise as double-dip fears ease

LONDON ”” World stock markets advanced modestly Monday as investors rode momentum from Friday, when an upbeat U.S. jobs report eased fears that the global economy could slip back into recession.

.......

Because the U.S. economy is the world's largest and consumer spending there accounts for a fifth of global economic activity, the stronger-than-expected jobs data on Friday helped calm investors' frayed nerves after weeks of worrying indicators.

"The renewed flight to safety we have witnessed over the past month is overdone and risks an equally large reversal when the worries over a double dip subside," analysts from Rabobank said in a report.

"As the unexciting, steady and below-trend global recovery continues, it's important not to confuse it with a double dip recession."

http://www.google.com/hostednews/ap/article/ALeqM5h3kgMAkbLwyfxBdjzw8Pc4KZ7DhQD9I2EVU00

Elsewhere it looks like there short term pressure on crude till inventories clear, with medium term confidence. The US was closed for the holiday so the real picture will appear tmoz.

 

[condog]

Why the US is buying AustraliaRobert Gottliebsen

Published 8:05 AM, 3 Sep 2010 Last update 9:59 AM, 3 Sep 2010
We have seen retailers like Costco, Zara and Gap plus Lowe’s (via the Woolworths joint venture) come to Australia in recent times, but the pace will accelerate.

And of course we also have the Chinese looking hard at Australian assets. We have become flavour of the month and we will see many listed companies receive bids in coming years. We must understand our new growth positioning in evaluating offer prices.

The global financial crisis was an amazing wake-up call for many US companies. Until the GFC they had seen the US as the global growth powerhouse

They now have thier prowing eyes on our companies, and you can bet your bottom dollar high performing small cap companies like AUT will be right on thier radar. If not snapped up first by the chinese or indian predators.

Elsewhere on business spectator

Credit Agricole oil analyst Christophe Barret said he expected oil prices to stay close to $US75 for some time:

"Right now the level around $US75 is pretty reasonable," he said. "I think that until we get some big oversupply or a big rebound in demand, we will not move from the range of $US75-$US80."

It appears the funds are beginning to short oil once over $75 and on mass by $80 , while longing below $74 and on mass at $71ish from what im reading. So i myself see it floating in the range $72 to $76 or so until something big changes. Those levels are extremely profitable imo for AUT.

 

[condog]

All great news headlines as far as AUT is concerned. Just hold the TO offers for a few years please.

Economy's looking up for now as double-dip fears ease
Updated 7h 28m ago

A steady flow of not-entirely-terrible economic news has eased worries of renewed recession and shifted the political spotlight from the Federal Reserve to the White House.

"The August data we've been getting has been encouraging. ... It's very likely that the economy continues to move forward in the coming months," said economist Bruce Kasman of J.P. Morgan.

The economic news increasingly has a bipolar cast to it. One day, a downward revision to the second-quarter growth rate makes a double-dip recession look like a real threat. The next, a drop in first-time jobless claims suggests that the wounded U.S. economy may muddle through after all.

"The economy is having a slow and halting recovery, because that's the nature of recessions triggered by financial crises," says Rob Shapiro, chairman of consulting firm Sonecon in Washington, D.C.
http://www.usatoday.com/money/economy/2010-09-07-econoutlook07_ST_N.htm

6 Sep, 2010, 02.23PM IST,REUTERS
Reliance not finished with US shale buys

MUMBAI/NEW YORK: Billionaire Mukesh Ambani's Reliance Industries, which has struck three shale gas joint ventures with US firms this year, may make a full buyout next as the cash-rich firm builds the knowledge it needs to run such operations.

Reliance has received about 20 to 25 pitches from investment bankers for shale assets, Reliance Chief Financial Officer Alok Agarwal said recently. Bankers say potential targets include Fort Worth, Texas-headquartered Quicksilver Resources Inc, Denver, Colorado-based Enduring Resources and companies with assets in the Horn River shale formation in Canada.

Another firm on Reliance's radar may be Houston, Texas-based EOG Resources, which said in early August it plans to sell about 180,000 acres in U.S. shale plays -- underground rock formations that hold reserves of oil and natural gas. Shale gas accounts for between 15 percent and 20 percent of U.S. gas production, but is expected to quadruple in coming years, touching off a scramble among producers large and small for access to resources.

He could face competition from other firms, including Royal Dutch Shell, Total and Mitsui, which have done shale gas deals previously, and those that have not bought a shale asset yet such as Chevron and Encana. Reliance is expected to generate free cash flow of $18 billion between this year and the fiscal year that ends in March 2014, giving it plenty of firepower for investment.

http://economictimes.indiatimes.com...ed-with-US-shale-buys/articleshow/6505633.cms

Peak Oil Scares Germany
http://www.thetrumpet.com/index.php?q=7460.6038.0.0

 

[Sharejon]

Cheers for keeping us updated Condog.

You sure are passionate about this stock!

 

[prgudula]

SUGARLOAF AMI OPERATIONS UPDATE
Aurora Oil & Gas Limited (“Aurora”) is pleased to provide the following update on operations at the Sugarloaf Area of Mutual Interest (“AMI”) within the Sugarkane Gas & Condensate Field, Texas.
Luna #1H Operations Update
The drilling operations on the Luna #1H well are now complete. The well was drilled to a depth of 17,370 ft, providing approximately 5,000 ft of horizontal section within the reservoir. The production casing string has now been run and cemented in place and the rig has demobilized from this location. The well will be fracture stimulated, in a similar fashion to the other Aurora wells within the Eagle Ford Shale trend, in due course. This is the second post-farmout well within the Sugarloaf AMI in which Aurora has participated.
May #1H
The drilling rig will now mobilize to the next drilling location which is also within the Sugarloaf AMI and is expected to spud the May #1H well shortly.
ASX participants in the Sugarloaf AMI are:
Aurora (ASX:AUT) – 10% (post farmout)
Adelphi (ASX:ADI) – 10% (post farmout)
Eureka (ASX:EKA) – 6.25% (post farmout)
Aurora also participates as a 50% WI holder in a larger area made up of an additional ~ 27,000 acres within the Sugarkane Field adjacent to Sugarloaf. Aurora is the only listed participant in these areas which are also subject to farmout to Hilcorp for the drilling, stimulation and tie in of a further 4 new wells (please refer to earlier releases).

 

[Sdajii]

The bots are quite blatant this morning, as is often the case lately. I can only guess as to why they are trying to push the price down, but presumably it's an attempt to lower the price in order to allow the bots' owners to buy more, or maybe make a takeover more possible. Thoughts?

I'm surprised that such obvious bot activity isn't followed up.

If the price is being pushed down artificially, I suppose at least we know someone else thinks it's a stock worth trying hard to get your hands on.

Or, am I totally misunderstanding things? (wouldn't be the first time!)

 

[condog]

SUGARLOAF AMI OPERATIONS UPDATE
Aurora Oil & Gas Limited (“Aurora”) is pleased to provide the following update on operations at the Sugarloaf Area of Mutual Interest (“AMI”) within the Sugarkane Gas & Condensate Field, Texas.
Luna #1H Operations Update
The drilling operations on the Luna #1H well are now complete. The well was drilled to a depth of 17,370 ft, providing approximately 5,000 ft of horizontal section within the reservoir. The production casing string has now been run and cemented in place and the rig has demobilized from this location. The well will be fracture stimulated, in a similar fashion to the other Aurora wells within the Eagle Ford Shale trend, in due course. This is the second post-farmout well within the Sugarloaf AMI in which Aurora has participated.
May #1H
The drilling rig will now mobilize to the next drilling location which is also within the Sugarloaf AMI and is expected to spud the May #1H well shortly.
ASX participants in the Sugarloaf AMI are:
Aurora (ASX:AUT) – 10% (post farmout)
Adelphi (ASX:ADI) – 10% (post farmout)
Eureka (ASX:EKA) – 6.25% (post farmout)
Aurora also participates as a 50% WI holder in a larger area made up of an additional ~ 27,000 acres within the Sugarkane Field adjacent to Sugarloaf. Aurora is the only listed participant in these areas which are also subject to farmout to Hilcorp for the drilling, stimulation and tie in of a further 4 new wells (please refer to earlier releases).

Yep continuation of drilling and fraccing adding emmense value to our underlying assets. All the while cashflow is getting closer and closer and from the recent results of the 2nd portion of T3, our NVP and recoverable resource will be increasing as well.

 

[BrightGreenGlow]

The bots are quite blatant this morning, as is often the case lately. I can only guess as to why they are trying to push the price down, but presumably it's an attempt to lower the price in order to allow the bots' owners to buy more, or maybe make a takeover more possible. Thoughts?

I'm surprised that such obvious bot activity isn't followed up.

If the price is being pushed down artificially, I suppose at least we know someone else thinks it's a stock worth trying hard to get your hands on.

Or, am I totally misunderstanding things? (wouldn't be the first time!)

You gotta be kidding right? People will only sell if they want to so I don't see how this is the case mate.

 

[BrightGreenGlow]

Hey condog,

When do you anticipate the next bit of (good) news (reporting) to come from AUT. Im looking to buy again shortly but a bit of a timeframe to get in to either ride or fall off the gains or loses from another report would be handy.

Obviously I'll check out my options again but a few dates would be great mate. I can't find anything. :S

 

[AngusSmart]

John, i am no expert but...

I might be able to give you some insight just by looking at the chart. and its trending pattern thats on going..

We're about at the middle of the trend on an upside move with news flowing constant and positive as always again now that the drilling crews are back on our acreage.. however we are trading a little sideways at the moment..

Condog, did you have a table made out with what wells had what done and what wells needed fracturing etc?

 

[condog]

Hey John the thing is there is no major big news imo, its more a consistent flow of news on spuds, fracs, drill completions, 30 day flows, 60 day flows, quarterlies.

The only bigger news i forsee is when the cashflow begins in Q4.

On a timing note, this isnt advice, but i was gunna post it anyway. Its just a simple graph with 25 day moving average. It would seem that the 25 day moving average is a pretty good guide. Other then the long period of consolidation post CR and SPP, everytime its hit the 25MA, it seems to indicate the beginning of the next rise. ?? Its recently hit it and i think judging by the buy sell imbalance today we might be on the next leg up right now. Id personally expect it to be a short one given the short term weakness of crude fundamentals. perhaps hitting 1.22 - 1.27 before pulling back again??



Im estimating 8-10c growth per month on average with the 2 rig progress. and 12.15c once the 3rd rig turns up in january. But thats my guestimate and it is based on crude remaining in the $68 -$76 range.

Please do not rely or make decisions on this. At the end of the day im a mug punter like the rest of you. Do your own research always. Live and die by your own decisions. And seek expert advice.

Angus i havent updated it yet in light of yesterdays and todays news. Theres a pretty good one just missing todaqs rlease int eh investor presentation released yesterday. I will post it below.