AUT - Aurora Oil and Gas

[Sdajii]

Yep good news all round

Morgan started, Easely half the horizontal done, Kennedy and Weston still flowing via casing to sales, neither on tubing.

4 more wells for AUT on Lh and Ipnm

All looking very good indeed. Cannot believe they didnt all add 10-20% or more today on that news. Morgan alone and Easely so close are good signs.

Do you have any guesses as to why they didn't all go up? Things have been looking fairly good to me over the last few days, but prices have dropped about 10-15% for ADI, EKA and AUT over the last 10 or 11 days.

Maybe the hype pushed things up too high or too soon and more realistic prices are appearing, or maybe people are just feeling a little too risk averse to get involved. I don't know, I'm just throwing baseless ideas up, but would love to hear something more informed.

Disclosure: I hold ADI, but no AUT (yet?)

 

[condog]

Sdajii - the market moves in mysterious ways.

This stock is not on the radar of the big movers and shakers and they have not done themselves a good job of marketing themselves to investors, so they are still largely unknown. As such lack of understanding leads to lack of confidence, so imo any run will be followed by consolidation to build confidence before the next run. 2 weeks ago the market took a good few days to respond to good news, and it now has two lots of good news been ignored under its belt, so I expect some upward pressure will now start creeping in over coming days. Could be wrong so DYOR

 

[condog]

Very conservative but good report put out by pattersons on AUt today. Target 68c with review upwards likely in june / july. Thanks to MIR

 

[rock86]

Very conservative but good report put out by pattersons on AUt today. Target 68c with review upwards likely in june / july. Thanks to MIR

Way to conservative IMO, with 3 new wells finished and producing by then I'd be expecting ADI to be more closer (probably greater) to that target. With AUT's additional acreage, they'll be past that figure maybe when Easley has it's flow rate reported

 

[condog]

Way to conservative IMO, with 3 new wells finished and producing by then I'd be expecting ADI to be more closer (probably greater) to that target. With AUT's additional acreage, they'll be past that figure maybe when Easley has it's flow rate reported

I agree - i tend to see most these conservative reports like this one as my worst outcome imo. Not saying all are low ball. But imo this one is.

 

[Sdajii]

It seems surprising to me that something like this can remain under the radar for so long. If what you (and several others, go check agentm's posts in the ADI thread!) say is true (and I am guessing it is), it seems like just two or three highly cashed up people with a considerable amount of knowledge of oil drilling knowledge would be accumulating at much higher prices that we are currently seeing...and I have no doubt that more than two or three such people exist. I wish I had a lot more understanding of oil production, not that I'm cashed up enough to put much more than a small blip on the share price, but it seems like a brilliant opportunity I have insufficient understanding of to jump too deeply into.

As you say, the market does some 'mysterious' things (sometimes I would use a less kind word than 'mysterious' ).

What do you think the main risks are for AUT (and ADI/EKA, etc)? In my oil-naive eyes things seem to be going along wonderfully, and unless Texas passes as "No oil production in Texas" law, or terrorists destroy the rigs, I can't see much potential for problems, but that may just be because I am not sufficiently familiar with oil.

 

[mir]

sdajii I've been in aut & eka from day 1 so over 4 years & imo in the last month or two most of the risk has been taken out with two good results & hilcorp steaming head with 7 new wells for aut.

 

[condog]

As MIR said it has been significantly de risked as the two biggest risks are hitting dust, and running out of money. AUT seems to have both those bases pretty much covered.

However having said that there are still a lot of risks , and hence the high possible upside.

Obvious risks include, well damage / collapse, blowout, gas price collapes, oil price collapse, political risk (green legislation) etc. Most companies however would have a list almost as long as this if you truly assessed risk.

By your comments you dont know a lot and might be best served learning a fair bit without investing, or by investing small amounts till you learn about these small cap exploreres oops producers.

 

[Sdajii]

By your comments you dont know a lot and might be best served learning a fair bit without investing, or by investing small amounts till you learn about these small cap exploreres oops producers.

Yep, I think "oil-naive" makes it pretty clear I'm no expert in this industry! I find it very interesting though, and as you suggest I'm investing relatively little while learning as much as I can

The risks you list (equipment mishaps, price and currency issues and red tape) were what I had in mind, although I have little concept of the relative likelihood, particularly in terms of equipment. I don't want to waste your time with pathetic newbie questions, so is there a better way for me (or for you to get me) to learn about the chances of equipment failure and potential costs of fixing them/permanent loss of resources/timeframes of delay? I'd rather not unnecessarily drag it out of you.

I would have thought red tape was possible but reasonable unlikely to get in the way. I can't see the Texans suddenly banning methods which have been used for so long when the result would be the loss of so much income. Of course, if I'm being a complete noob-tard, point that out to me

 

[condog]

Yep, I think "oil-naive" makes it pretty clear I'm no expert in this industry! I find it very interesting though, and as you suggest I'm investing relatively little while learning as much as I can

The risks you list (equipment mishaps, price and currency issues and red tape) were what I had in mind, although I have little concept of the relative likelihood, particularly in terms of equipment. I don't want to waste your time with pathetic newbie questions, so is there a better way for me (or for you to get me) to learn about the chances of equipment failure and potential costs of fixing them/permanent loss of resources/timeframes of delay? I'd rather not unnecessarily drag it out of you.

I would have thought red tape was possible but reasonable unlikely to get in the way. I can't see the Texans suddenly banning methods which have been used for so long when the result would be the loss of so much income. Of course, if I'm being a complete noob-tard, point that out to me

Anyone trying to place a probability on each risk is pseculating as there are just to many variables.

One of the magniificent de risk strategies for AUT is they are in the USA which is energy hungry, they are free carried for 10 wells in 2010, so if one or 2 stuff up they will survive, they have cash in bank and good upside which all reduces risk, they now look to have two wells up and running, with two more in the process. All this reduces risk with each step. The problem is as the risk reduces the price goes up lowering the return.

 

[Ramblin Round]

An outlaw on drilling in Texas ?!?! BWAHAHAHAHA................Yeah, that's on this list right after we outlaw the slaughter of cattle. :

Save the cows !!! Eat more........chicken ??? LoL...................


:jump:


The only risk I found left in this JVP is the risk of watching others make money and not me. So I bought into ADI. However DYOR and this is IMHO, but ADI was my first trade ever and I have been pleased so far. I didn't break the bank but still have enough shares to make handsome potential gains. This JVP play is a great starter for someone wanting to get their feet wet with trading. Slow, stable and not too aggressive yet still potentially profitable.

Being stateside on NASDAQ and not on the ASX, ADI was the only group obtainable by me in this JVP. Otherwise I would try to buy others but alas I cannot. (Just disclosing why I'm discussing ADI here in the AUT thread.)

 

[condog]

Hi Ramblin you should be drivin a ferrari by now ......whats happeining with the land men, havent they been out your way yet.

In regards to chicken and cows etc....that was my point but i didnt want to offend anyone from Texas if they read it. LOL

Oil comes before all else in texas.

 

[mir]

ramblin i thought that might be the case together with the quality posts by agentm on the adi thread.there should be a way to buy the other jvp, i can find out if you wish.

 

[condog]

Wells Fargo upgrades outlook for both Petrohawk and St Mary LAnd & Exploration , based soley on the success and potential of the Eagleford Shale.

this is a very serious tick of approval for the credibility of the Eagleford and its players.

From steetinsider.com on Google news - today 10th march 2010

 

[condog]

Exxon Mobil cam out and rated the Eagleford as a high priority for the next two years.

Next weeek is likely to see news on easley and kennedy flows ????

Possibly an application for the forst longhorn well.

 

[condog]

good udate yesterday, ip rates not altered, on 7' casing still.

Easley to do 3000ft horizontal,

Morgan doing well.

Both about to be fracced

I guess this means Rancho starts asap and we should be waching for IP or LH application. 50% interst in those. so wath them closely, thats when AUT should begin to gap the other jvp's.

 

[condog]

AUT bumping off its highs again. Good technicals and fundamentals at present. No huge breakouts expected , but upside looks good imo.
Few sellers and disciplined holders and buyers mounting dramatically this week.

Ive got my own xmas sp target of 81c - $1.38 from my own calcs. But do your own.

Right now AUT is sitting at just over half its value compared to ADI and EKA its JV partners when priced on a boe/EV basis.

Its priced at around $1.80 / boe and with the Eagleford shaping up as a tremendous play with certainty of reserve, not found elsewhere thats looking imo incredibly discounted.

Many other small gas/oilers operate around $3.50-$5+ per boe reserve.

Very happy to be holding. DYOR and seek expert advice.

 

[Sdajii]

AUT looking good lately! Well done to all holders! I hold EKA and ADI, but not AUT (yet?). I'm interested in your calculation of AUT being about half the price you would expect on a BOE basis vs ADI or EKA. I looked at the price targets for ADI thinking they were crazy, did my own, came up with a similar figure, and bought. I then heard that EKA was massively cheaper compared to ADI, did the figures, agreed, and bought up there too. However, unless my calculations are wrong (very possible) EKA is about half the price of ADI on a BOE basis (which I just can't understand! It looks like EKA is a mind-blowingly good deal at the moment, and surely I must be missing something, because the alternative is that most of the rest of the world is!). So, if AUT was half the price of ADI on a BOE basis, it would still be more expensive than EKA by the same measure. If it's cheaper than EKA right now I probably need to crunch some AUT numbers, but I'm already in pretty deep!

 

[mir]

sdajii
I'm using post farmout figures
aut has 10000 net acres &220M shares , adi has 2300 net acres & 150M shares ,eka has 1450 net acres & 150M shares.

using petrohawk (blackhawk area which is just east of aut acres )figures of 500Mboe to 750Mboe for 53000 acres, imo eka & aut share price is about right in value now.
i also did a rough calc on aut on hotcopper on 28-3-10 ,14.57 aut thread mir911.

 

[mir]

"imo eka & aut share price is about right in value now."
sorry what i meant was they both should be a lot higher in price but are about equal value against each other.