AUT - Aurora Oil and Gas

[Sdajii]

Ah, I see where you're coming from, makes sense, thanks for posting - I'm somewhat inclined to disagree, but I won't, because I'm sure you understand the situation better than I do. I seem to have a figure of about 220M shares in mind for ADI by the way. From what I can tell, all three look great at the moment.

This may be a stupid question, but could AUT's lower price be mostly reflecting the risk associated with holding more land, which will require more money to keep and develop, which means they may not be able to develop it until later or at all? Or having to get someone else in to drill, which would cut into the profits?

 

[condog]

mir i do not know how you come up with that calculation.

Based on the most recent AUT preso, AUT was priced at about $1.67 per boe, while ADI was priced at $3.67 / boe. or there abouts from memory.

This indicates on reserves AUt is basically less then half price compared to ADI.

If you then consider all the extra free carried wells AUT has from Hillcorp and the acerage lease vlaues, its almost impossible to say ADI is priced with any similarity to AUT.

Im happy to be proven wrong, but thats the way i see it at present.

 

[mir]

condog
i never said adi was similarly priced to aut it was aut against eka i was referring to.
imo aut share price should be about 2.5 times adi & 4 times eka (at the moment aut is nearly 4 times eka so imo about right, but a lot better value then adi).
i probably didn't explain it to well.

 

[subi1]

condog
i never said adi was similarly priced to aut it was aut against eka i was referring to.
imo aut share price should be about 2.5 times adi & 4 times eka (at the moment aut is nearly 4 times eka so imo about right, but a lot better value then adi).
i probably didn't explain it to well.

I am trying to work out whether to buy AUT as i own ADI & EKA shares but the thing that bugs me is whether they will have to raise cash and how many extra shares they will have to issue.

From what I can see they will have to raise quite a bit to fund the Longhorn & Ipenema wells. Is this added to your calculations in the relative values of the partners?

 

[mir]

subi1
"From what I can see they will have to raise quite a bit to fund the Longhorn & Ipenema wells. Is this added to your calculations in the relative values of the partners? "

fair points, i get regular updates on whats going on & have asked the same questions & have been told they have it under control (if you look at their investor presentation on the 3-3-10 i think it is mentioned in detail there).

i believe all along part of aut strategy was to pick up as much of the prime acres as possible ,then to keep drilling to prove the resource. at the right time & price sell the resource . with whats going on in the area with the major oil companies, you would have to think they are half a chance.

 

[Agentm]

new permit

turnbull vertical well

http://webapps.rrc.state.tx.us/DP/d...blicQuery=Y&name=TURNBULL&univDocNo=486016408

starting to get interesting for aut right now.. imho way way under the radar

i think this opinion is roughly what pattersons thinks, not sure i understand their maths,, but imho its a start..

30 March 2010

12mth Rating

BUY

Price
A$ 0.83

Target Price
A$1.27

12m Total Return
52.7% (52.7% on those figures??? surely a typo? 100% imho )

serious upside here imho

 

[condog]

I am trying to work out whether to buy AUT as i own ADI & EKA shares but the thing that bugs me is whether they will have to raise cash and how many extra shares they will have to issue.

From what I can see they will have to raise quite a bit to fund the Longhorn & Ipenema wells. Is this added to your calculations in the relative values of the partners?

Read the most recent preso its outlined in there. They state cash flow will fund the bulk of development, but thier may be need to raise some funds through either debt or other structures to fully develop or accellerate development. I have had several discussions with them and they seem very aware of the need to look after loyal shareholders over other interested parties.

Any cR for accelleration of development is a long way off and possibly many multiples in sp as well.

 

[condog]

new permit

turnbull vertical well

http://webapps.rrc.state.tx.us/DP/d...blicQuery=Y&name=TURNBULL&univDocNo=486016408

starting to get interesting for aut right now.. imho way way under the radar

i think this opinion is roughly what pattersons thinks, not sure i understand their maths,, but imho its a start..

30 March 2010

12mth Rating

BUY

Price
A$ 0.83

Target Price
A$1.27

12m Total Return
52.7% (52.7% on those figures??? surely a typo? 100% imho )

serious upside here imho

Agent ho long till you jump on board to take advantage of all these beautiful high interest free carried wells. hmmm me smells lots of liquids at longhorn.

Seriously though Patersons calcs are very very heavily discounted and conservative imo. I see personally a lot more upside then pattersons.

 

[condog]

Courtesy of Agent
- Turnbull drilling away , good news for AUT holders, which should very soon see the price gap established between AUT and its JVP's.

 

[condog]

Again courtesy of Agent
If hartleys value ADI at short term 45c and an unrisked target of $1.88, then what would Hartleys value AUT at with all its extra free carried wells and reserves??

PAttersons had AUT valued at risked valuation of 68c on 3rd March and a lot has happened since then to imprve value, reduce risk and increase the valuaion. This equates to around $2.84 unrisked using Hartleys method . (This extrapolation is rough so DYOR)


One things for sure using Pattersons 83c from 30th march, this from Hartlesy and the 68c on 3rd march for AUT. AUT is looking cheaper every day and every annopuncment imo.



Thanks for the correction below Agent. Ta.

 

[Agentm]

the photo is rancho grande in the AMI acreages condog

this is the turnbull photo on the longhorn acreages

 

[condog]

Nice to see AUT hitting a new high of 48.5c yesterday. Well deserved and lots more likely imo . Not without risk but all looking good so far.

 

[condog]

Agent MIR - this diagram from EOG, like the Pioneer one put out in Dec on page 7 of this AUT thread, makes Longhorn look very prommising to be in the oil or liquids.

Agent I think it was you said Longhorn streatches out to the North interspersed messly in amongst other leases. Got to be getting very wet up there comparred to Kennedy and Kowalick.

and those comments about the Chalks producing significant liquids as well is even better. Especially if they can tap a horizontal from the existing wells once they are depeleted.. Which will save time and $

 

[lemontree]

With a handful of "change in director interests" anouncements showing they are topping up on their shares in AUT. We can expect good news

 

[AngusSmart]

things are looking good. up 10c since i started watching last month.. did i read some chance of capital raising in there too? @ .19c? or was that from a while ago? or is it them converting their options to shares? perhaps waiting to sell some off if things head north?

i'm still yet to hold i was going to wait.. hopefully not too late now tho.

 

[condog]

That diagram above was provided by Agent who i failed to acknowledge and do appologise for.

Good day for AUT smashing into the 50s but still way too cheap. On the positive very few sellers and plenty of buyers stacking up with bigger quantities. Looking good, imagine what its going to be like with a few more wells drilled and a few more fracs under its belt, plus some wells on production tubing.

The farmin with Hillcorp has so far been a stroke of genius, although i do want to see those fracs starting soon. Perhaps a secnd frac crew is needed.

Lemontree, its not just directors topping up . I topped mine up today selling some stale gumbies to boost my holdings. 50c looked ambitious months ago now it looks like freebies imo. The best 50c i ever spent.

 

[Atlas79]

Where do you see the SP eventually headed Condog? How much upside is there in this? Eyeing this one off but for instance PCL is only 3c at the moment, with a possibly very interesting seismic report due out any day now for (potentially) a 5-10 bagger very quickly, then lots more upside down the track...

 

[condog]

Atalas put it this way

Pattersons have a short term target of 68c which they themselves said was heavily discounted and likely to rapidly change. Since then many things have changed for the better.

Since then Hartleys put out a report on ADI with ST target of 45c and unrisked $1.88, they also acknowledged that this was likely to change rapidly and had tremendous upside potential fromthese figures.

Oil & Gas is risky, but the eagleford and its fracs is proving too be tremendously reliable and removing a lot of that risk.

From the AUt Investor presentation when ADI was at 17c and AUT at 24c ADI was priced at $3.67/boe and AUT was at half that. Making AUt worth roughly 48c to ADI 17c. Pluas AUT then has the value of extra free carried wells and thier potential revenue.

So at the time of that report AUt by my amatuer and rough calcs was worth 48c+ the free carried wells factored in at about 70% discount of 30% WI of roughly = $1-$3M per Well (take discounted average of 1.5M) * say 5 wells.
. At discounted PE of 8 that adds 5*1.5M*8 to the mcap. =$60M. At that time mcap was around $40M. so 2.5 * sp.

I came up with my risked discounted value of around 48c+2.5*24c= $1.08
A lot has happened since then.
Using the above method, which is only one of the many ways to do it, if I now work out AUt relative to Hartleys latest report on ADI.
45c*2.8=$1.35 + the additional wells at 60c+ = discounted valuation of $1.95 imo by Dec 2010. So im hoping on a 3-5 bagger minimum by Dec 2010 from currnet prices.

As you can see from my calcs and relative to the Hartleys ADI this is discounted and risked. An unrisked I have not calcultaed, but relative to ADI it would be around $4+ imo. Unlikely to be achived but possible.

If however AUT do a cap raise for further drilling then this would not be achieved. If income starts flowing earlier then expected this may be over achieved. Its just my rough calcs.

You only have to look at the major oil companies clammering all over each other to get into the Eagleford to know its worth investing in something there. The fact it has oil and gas is a bonus, with impending reliance on cleaner energies at some pooint.

Note i am not a broker or advisor. This is not advice or recomendation. They may contain errors or be innacurate. They do not reflect reality, and tak into account anyones circumstances. So Do your own research and definitely seek expert advice. Oil and Gas are notoriously risky investments. I hold and have a vested interest in price increases.

 

[Ramblin Round]

Yeah but are you accounting for how many people are going to hit the $1.00 mark and drop out like a bandit. A buck is usually a penny stockholders first goal. Will some shuck AUT and ADI and kick it back iunder that mark ? Thoughts ?

 

[condog]

yeh $1 will prove a resistance point no doubt, as it does for every stock that goes through it. But eventually $1 loses and value takes over if its there. imno its already there for AUT.