AUT - Aurora Oil and Gas

[condog]

AUT still looks great to me. Euroz have had that $3.38 Target out for a while now and to me its worth every cent of that. Extra rig should be on site sooon and hopefully full time frac crew is very soon as well.

Id expect an operational update very soon that should also help.

 

[condog]

The few I have sold to date were exchanged mainly for LYC, the "new oil". Lyc has performed better for me than AUT over that period and I expect that it will continue to do that over time.

Why you little cross promotor you....lol

LYC has performed well but its only outperformed AUT in the last month or so, and it really looks like its gone to hard and is pulling back.

AUT on the other hand has been held back by a bungy chord called the Capital Raising, and when the bungy cord of sellers disipates, imo, once more just like all the previous we will take off like the bungy chord broke.

I know which one id rather be in, AUT is a much lower risk play imo and more underpriced as well. But hey thats just a very biased opinion of mine.

 

[philly]

The Chineses are interested in the Eagle Ford.
Source: upstreamonline. 5/1/11

China thirst drives market boom
China’s newfound appetite for oil and gas projects in the Americas drove exploration and production acquisitions in the fourth quarter, according to a new report.

An industry-wide move towards shale plays containing liquids also characterised one of the strongest quarters in recent years for acquisitions in the sector.

Fourth-quarter deals worth a combined $73 billion brought last year’s total value of acquisitions to $238 billion, UK analyst Evaluate Energy said in its quarterly review published this week.

The annual figure compared to a 2009 total of $151 billion.

China’s shift in focus from Africa to South America and Canada accounted for some of the quarter’s – and the year’s – biggest deals, including Sinopec’s $7.1-billion purchase of a 40% stake in Spanish player Repsol.

That deal capped a flurry of fourth-quarter activity by Chinese companies in Latin America. It followed Sinopec’s $2.5-billion purchase of Occidental’s Argentinean exploration and production portfolio and Bridas Corporation’s $7-billion acquisition of BP’s 60% stake in Argentine producer Pan American Energy. China National Offshore Oil Corporation (CNOOC) owns half of Bridas.

The Pan American deal was the most significant in the $21 billion worth of divestitures BP conducted since the Macondo blowout in April.

“Although the year was again dominated by Chinese companies acquiring assets, this actually suited many IOCs (international oil companies) who were looking to divest or reshape their asset portfolios,” said Eoin Coyne, Evaluate Energy’s mergers and acquisitions expert.

China’s government also entered into a number of loans-for-oil agreements worldwide last year in an effort to supply its booming economy while deflecting any potential hostility at another perceived Chinese asset grab, Evaluate Energy said.

Shale continued to invigorate the exploration and production sector last year, but the fourth quarter saw more of a shift towards shale oil as a driver of acquisition deals, the analysts said.

The Eagle Ford shale play in southern Texas drew particular attention during the quarter, with 10 deals totalling $4.5 billion involving the play’s liquids-rich portion.

A $1 billion farm-in deal between South African integrated company Sasol and Talisman Energy in the Canadian company’s Montney shale play was further evidence of shale oil driving acquisitions, the analysts said.

“The key reason why Sasol was taken on as a partner is due to the company being amongst the global leaders in gas-to-liquids technology,” they said, adding that the prominence of shale oil is due to the large difference between US oil and natural gas prices.

Overall, shale gas still accounted for the majority of the $7.4 billion worth of shale-focused deals in the fourth quarter. Chevron’s $4.3 billion acquisition of Atlas Energy provided a considerable chunk of that total.

Published: 05 January 2011 20:55 GMT

 

[nioka]

Why you little cross promotor you....lol

Guilty as suggested and something I am not usually associated with but in this case it was necessary to prove the point. You are right it was only in the last month or so but that is also the point. It is only in the last month or so that I made the switch.

I used to trade between AUT, ADI and EKA as a trio but AWE spoilt that game. EKA is dragging the chain a little and hasn't the volume necessary for easy trading so I introduced the "new oil" into the equation. Although I have bought a few EKA today.

If I find a better investment than anything I hold, including AUT then I will change. (As for cross promoting, check out EDE.)

I never have a love affair with stocks, you know the saying "never fall in love with a prostitute".

 

[condog]

Yes hilly i think we are going to see new highs for chinese resource acquisitions. One reason why imo is that China no longer want to hold as many US dollars. And given theres no other legitimate global reserve currency as yet, and the worrysome Euro is wobbling as well, Chinas best bet is to buy the one thing that goes up when currencies go down, resources.

So i guess im saying anyone who thinks chinas acqusitions where big last year aint seen nothing yet.

And the more the US fed prints the more we will see China rushing to resources rather then holding US dollars.

 

[condog]

Nioka , still plenty of growth left in this thing yet. The 50% reserve upgrade has hardly been factored in, let alone the reduction of well spacing or the much higher indicitive oil prices for 2010.

If those oil markets catch on about the Iran supply issues we will see $100+ in a flash imo. Right now they are not factoring it in. But if Iran cant sell its oil we have a major supply constraint. Watch this space carefully.


Euroz put $3.38 on it some time ago now so lets just wait see.

 

[condog]

Euroz have updated valuation to $3.60 based on the higher oil prices of late, plus what they forsee going forward.

 

[easylikesunday]

Very good news for AUT holders!

Been playing with the charts and if the current trend can continue and the sellers start dying off, I think by mid-March we could see a price around $2.80 - $3.00 with support at around $2.40

Obviously thats my opinion, and a beginners one at that!

 

[philly]

Euroz have updated valuation to $3.60 based on the higher oil prices of late, plus what they forsee going forward.

Hi Condog,
when analysts value a share do they put a time frame on when they think this target will be achieved?
It closed at $2.24 on 31-12-10 so $3.60 is a jump of a bit over 60%.
Given that AUT has recently acquired extra acreage, drilling is to step up in 2011 and the price of oil is also on the up is it realistic to expect the target to be achieved by end of the 1st Q of 2011 or by mid year?

 

[condog]

Generally they either quote it as a target or a valuation. If its a valuation it means now. If its a target, they generally mnetion the time frame, and in Euroz terms its generally a 6 month target.

Euroz have this as a valuation and target meaning imo ots $3.60 sometime between now and 6 months.

Hope that helps , its just my opinion, others may not agree.

 

[condog]

Hi Condog,
when analysts value a share do they put a time frame on when they think this target will be achieved?
It closed at $2.24 on 31-12-10 so $3.60 is a jump of a bit over 60%.
Given that AUT has recently acquired extra acreage, drilling is to step up in 2011 and the price of oil is also on the up is it realistic to expect the target to be achieved by end of the 1st Q of 2011 or by mid year?

Yes once the post Cr selling os gone id be surprised not to see it banging on The $2.80 to $3.20 mark,.

 

[philly]

Generally they either quote it as a target or a valuation. If its a valuation it means now. If its a target, they generally mnetion the time frame, and in Euroz terms its generally a 6 month target.

Euroz have this as a valuation and target meaning imo ots $3.60 sometime between now and 6 months.

Hope that helps , its just my opinion, others may not agree.

Thanks, Condog. As always greatly appreciated. I'm in no hurry to sell - my CGT date is not until 19-4-11 - and even by then I would anticipate plenty of gas left in AUT.
No I think I'll ride this one for as long as I am able. Cheers

 

[Magic Man]

Hey Condog.

Could you please explain the announcement AUT made today and what it means for the future. thanks.

 

[philly]

Hey Condog.

Could you please explain the announcement AUT made today and what it means for the future. thanks.

Hey Magic Man I'm no Condog [and I am also interested in his views] but IMHO this is fantastic news for AUT.
In Longhorn Turnbull #4 is producing 1260 boepd, another well is being fracture stimulated and another well is being drilled.
In Ipanema Franke #1H is produicing 796 boepd, Patino #1H is producing 856 boepd and another well is being drilled.

All that is very very good but wait there is more...
In the next 6 weeks they will have 4 rigs available and each is scheduled to drill a new well each month ie 4 new wells per month.

With such news it would not surprise if a re rating is emminent. It makes the $3.60 target set by Euroz very achievable by mid year. Well done management. A very happy holder

 

[Sdajii]

Very exciting announcement! The flow rates are great, even on restricted chokes we're getting flow rates which would be good by the standards elsewhere without the restriction, and it will mean lower decline rates! That's brilliant...

All that is very very good but wait there is more...
In the next 6 weeks they will have 4 rigs available and each is scheduled to drill a new well each month ie 4 new wells per month.

...but this is the bit which really had me excited when I read it. Four new wells every month, starting in six weeks! Having that confirmed is awesome.

I'm a very happy holder

 

[philly]

Very exciting announcement! The flow rates are great, even on restricted chokes we're getting flow rates which would be good by the standards elsewhere without the restriction, and it will mean lower decline rates! That's brilliant...



...but this is the bit which really had me excited when I read it. Four new wells every month, starting in six weeks! Having that confirmed is awesome.

I'm a very happy holder

Fair to say that the market was excited by todays announcement as well. The SP closed at $2.31 [up 15 cents or 6.94% for the day ] on volumes over 1.6m shares. The next 6 weeks will fly by and we'll have to get used to 4 new wells being drilled every month.: 2011 looks like a bonza year for AUT. A very very happy holder

 

[condog]

Courtesy of the ever reliable MIR

latests update from euroz

Price Target: $3.60/sh



Reason For Update: Ipanema & Longhorn Operations Update



What We Know:

AUT has released IP and 60-day production data from the Longhorn and Ipanama AMIs.

Patino-1H (Ipanema - 30% WI) production to 60-days totalled 25.8kbbls and 245mmscf on highly restricted choke.

Average production of 9.92mmscfe/d (431bopd and 4.08mmscf/d) vs. av. Of the first 30days of production of 9.86mmscfe/d (3.7mmscf/d gas and 438bopd oil).

Franke-1H (Ipanema - 30% WI) av. production of 584bopd and 2.03mmscf/d on a highly restricted choke setting for first 10 days.

Turnbull-4H (Longhorn - 25% WI) av. production of 1058bopd and 1.94mmscf/d for the first 10 days production on a highly restricted choke setting.

Sienkiewicz-1H (Longhorn - 25% WI) is undergoing fracture stimulation.

Yosko-1H (Longhorn - 31.9% WI) is drilling ahead.

Two new rigs have commenced in the field (4 total); we expect addition of at least a further two over the next few months.

What We Think:

AUT?s latest results were ahead of our forecast.

The Patino well showed negligible decline in terms of average oil production(438bopd to 431bopd), and increasing av. gas production (3.7mmscf/d to 4.08mmscf/d) from 30 to 60 days.

Similarly, the Turnbull-4H is performing ahead of expectation given the performance of the neighbouring Turnbull-1,2 and 3H wells.

The decline rates clearly benefit from the premium reservoir characteristics of AUT Sugarkane Field interests, noting that tubing head pressures remain exceptionally high.

Gross revenues from Patino-1H (at current spot prices) total US$3.3m for the first 60 days (vs. US$8m well AFE).

This continues to strengthen expectations of circa 6mnth pay-back at current commodity prices.

We estimate field production is now in excess of 10,000kboe/d.

This augers well for AUT to achieve net share production of +2.5kboe/d by mid-CY?11 and exit the CY at 5kboe/d.

We have recently revised our long-term price assumption to US$100/bbl from CY?12.

Our AUT valuation increases to $3.60/sh.

We highlight the leverage AUT offers to rising oil prices; applying US$120/bbl long-term underpins a $4.40/sh valuation.

The strength of the production data bodes well for the revised reserves statement in the Mar Q.

With around 2.5x more wells on production at Dec 31 (vs Jun 30 for the July statement), we anticipate a similar factor will be reflected in the increases to 1P and 2P inventories.

Additionally, the 60 well programme in CY?11 should result in most of the 84mmboe of 3P reserves converting to 2P over the next 12mnths.

Furthermore, tighter development well spacing (vertically and horizontally), continued out-performance vs. the Netherland&Sewell type-curve, and higher EURs encourages us to see significant upside to 3P reserves can be realized over the next few years.

Investment Case:

The latest operational results continue to build on the quality argument for AUT?s Sugarkane Field interests: Results continue to track ahead of our forecasts. The results build upon a highly accretive acquisition that will result in a 50% increase to AUT?s current acreage position in the field.

Forthcoming reserves statements in the Mar Q will consolidate the value potential on an EV:2P reserve basis. Beyond which growing production - +5000boep/d end CY?11 increasing to a peak of +20kboe/d by CY?17 ? makes for a compelling investment proposition. Buy with a valuation of $3.60/sh.

 

[condog]

Hi Guys welcome back for the new year.

To me Turnbull 4 was excellent, some of the others where acceptable by AUT standards, whilst being exceptional by most others standards.

Good to see two rigs working hard, the frac crew on the job and 2 more rigs coming..

For me the biggest thing in todays announcment was the fact within around 6 weeks we will have 4 rigs drilling away, which will basically mean a well a week on average which is incredible in terms of growth.

Do the sums , those are some pretty amazing boepd to be adding at a well a week .

Right now imo AUT is priced perfectly for its current value, but has absolutely ZERO growth factored into its sp .
And blind freddy can tell you this thing should carry a heavy growth premium.

 

[condog]

The pre-open volumes look good with 700k buyers, 159k sellers and 2.40 indicative. Hopefully the sell side stays tight for a while so we can be rewarded for the increase in acerage and reserves, that so far hasnt been fully factored in.

 

[Magic Man]

I think its looking good condog.. when the price first spiked over $2, the sellers offloaded alot of stock.. since then the price has been increasing and the sellers side has stayed steady, so good signs.