AUT - Aurora Oil and Gas

[WRONG'UN]

Update of the AUT EKA relationship - also posted on the EKA thread.
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[condog]

This may draw some chriticism, but ive now put a personal target of $5.50 to $6.39 for Dec 31st 2011 on AUT.

Please note, do not rely on this, this is simply my personal amatuer opinion. Done in my spreadsheets i been using all along, with a discounted cash flow method as previously explained. Based on 350boe pd for 2010 wells, 500 for 2011 wells $80 oil and $3.75 gas @ 1500gas/day

Note using sam model that predicts $2.22 right now. Does not use reserves at all.

With 4 new wells a month its pretty easy to see where the value will be added from.

 

[BrightGreenGlow]

This may draw some chriticism, but ive now put a personal target of $5.50 to $6.39 for Dec 31st 2011 on AUT.

Please note, do not rely on this, this is simply my personal amatuer opinion. Done in my spreadsheets i been using all along, with a discounted cash flow method as previously explained. Based on 350boe pd for 2010 wells, 500 for 2011 wells $80 oil and $3.75 gas @ 1500gas/day

Note using sam model that predicts $2.22 right now. Does not use reserves at all.

With 4 new wells a month its pretty easy to see where the value will be added from.

Stunning Condog.. I can believe that though. $80 Oil is very modest when taking into consideration a lower US unemployment rate and the US recovery continuing!!

 

[Sdajii]

I agree, John, but on the other side of the coin there is more growth ahead of us now than there will be in 12 months and the market is taking that into account to some extent. It's very difficult to predict something like this a year in advance, but all in all my guesswork (I won't glorify it by calling it calculations or reliable predictions ) gives me a similar figure to Condog's. I'm 'guessing' about $4-5. Of course, I'm hoping Condog is closer to the money, and if either of us is in the ball park we'll both be smiling in a year.

 

[condog]

Yeh ive deliberately used conservative flows and prices. If im wrong id much rather be wrong on the low side then on the high side. The reality is though there seems to be plenty more left in this one.

 

[condog]

I agree, John, but on the other side of the coin there is more growth ahead of us now than there will be in 12 months and the market is taking that into account to some extent. It's very difficult to predict something like this a year in advance, but all in all my guesswork (I won't glorify it by calling it calculations or reliable predictions ) gives me a similar figure to Condog's. I'm 'guessing' about $4-5. Of course, I'm hoping Condog is closer to the money, and if either of us is in the ball park we'll both be smiling in a year.

Sdajii if the eagleford was hit and mis, it would be difficult, but its proven to be a reliable hit. Its just the flows that vary. And those flows have proven to be reasonably predictable.

So estimating it is not too difficult. But hence why ive used conservative figures, as id rather be under then over.

 

[condog]

A good start for AUT pumping out a new high.

However, Personally im unsure why right now anyone at all would be selling, when clearly the value of our acqusition is still not built in to the sp.

The Euroz valuation of $3.38 is imo on the conservative side for the post acqusition sp , and hence i would envisage that anyone selling right now is NOT imo getting value.

Id suggest thats why the buying is so strong, as anyone casting the ruler over AUT right now sees a very derisked bargain imo. I mean theres almost $1 profit to be made per share just to reach Euroz valuation, and track record suggest Euroz valuations have been pretty easy for AUT to attain.

 

[Sdajii]

Sdajii if the eagleford was hit and mis, it would be difficult, but its proven to be a reliable hit. Its just the flows that vary. And those flows have proven to be reasonably predictable.

So estimating it is not too difficult. But hence why ive used conservative figures, as id rather be under then over.

I agree it's a pretty sure thing, it has been well proven, which is why I'm a very happy little holder.

What I meant was that predicting the share price of something like this 12 months down the track is difficult. More difficult than predicting how many wells we'll have, how much oil we'll be producing, etc (not that I think it's incredibly easy to pinpoint, but we have a fair idea of that ballpark now, and I agree with you, it's looking very rosey).

The market isn't always rational though. If it was we'd be closer to $4 right now. I suspect that the market might be taking future growth into account now rather than basing the current valuation on what we're currently producing, and I think in 12 months it will still be lagging in giving it a proper valuation, and seeing less development ahead (although there will still be heaps, naturally). I might be entirely wrong, and things like currency conversions and the price of oil will have a strong influence, which honestly I don't think anyone can be absolutely certain of, but I do think you're at the conservative end of the ball park at $80. Not everyone would agree, of course. Nothing between $3.50 and $7 would surprise me at the end of the year.

In terms of your predictions and calculations based on flow rates etc, I think you're right on the money and I am one of the many grateful members who reads every one of your posts with high interest. I've thanked you before, I thank you again now, and I'll probably thank you again!

Last year I hoped AUT might help me get a deposit together for a home loan. I'm now wondering if it might end up covering half the mortgage.

 

[condog]

Last year I hoped AUT might help me get a deposit together for a home loan. I'm now wondering if it might end up covering half the mortgage.

And whilst anyone would be reckless, to get you to bet your house on any stock, one wonders whether it might end up buying you a house outright. Please do not act on that, but its the obvious question that springs to mind in response to your quote.

Sadjii i enjoy your posts very much also, you seem to have a very wise head when it comes to investing. Congrats on your gains so far.

 

[AngusSmart]

I'm Chasing another 10k put in today.. just back above my original holding now..

wish i didnt get out before i'd be in a similar boat to sdajii, i think i recall him mentioning this a while back! congrats to everyone!

 

[condog]

Hi Angus welcome back. Yep have to say so far all ive seen of those who got out is regrets. And have to say in my opinion i think there will be many more who fall into that trap of selling out far too soon. It takes guts and risk to let your winners run and honestly many people just cannot stomach it.

But when your on a winner like this that is adding value like they are, with good broker valuations well above sp, and about to accellerate thier value adding program, it seriously has to be worth riding much further in my opinion.

Obviously we cant control the floods or the global issues, but the oil price will be an early indicator to any problems out thier and right now its comfortable with proceedings. So imo this is one winner its probably more risky to dump then keep riding.

But hey im a mug punter just like the next guy so seek good advice and DYOR.

 

[condog]

2 new well apps by hilcorp
Buehring Unit and Salge Unit

Oils up strongly over $2 this morning letting us know the markets have considered all the PIGS issues and are happy they think its all under control.

Its also on the back of the Alaskin pieline issues (leaks) which any disruption causes pretty much immediate supply problems for the west coast refineries.

Elsewhere:
Talisman Energy expects to spend $4 billion this year in the Eagleford

Kinder Morgan/Copano Joint Venture To Provide Additional Gathering, Processing ...
Oil and Gas Online - ‎10 hours ago‎
Eagle Ford Gathering will provide more than 200000 MMBtu per day of incremental gathering and processing capacity to producers in the Eagle Ford Shale ...

 

[easylikesunday]

Hit $2.66 early this morning, settled at $2.50 for now.. which is exactly $1.00 over my purchase price!

That was less than 2 months ago! Wish I had the money back when I wanted to buy in at the .85c mark

My amateur chart thinks we may be around $2.85 by 20th Jan if we can stay above $2.50

 

[zzaaxxss3401]

My amateur chart thinks we may be around $2.85 by 20th Jan if we can stay above $2.50

A little optimistic I think. Looking at the peaks since Nov could return a figure of around $2.68 by the 20th Jan. $2.85 might be closer to the end of the month...

 

[Magic Man]

Loving the ideas.. is anyone topping up at these levels??

 

[easylikesunday]

A little optimistic I think. Looking at the peaks since Nov could return a figure of around $2.68 by the 20th Jan. $2.85 might be closer to the end of the month...

Opimistic, yes. Thats why I highlighted the amateur bit Im still a learner.

IMO, I think a new trend line has formed and if we can stay above $2.50 as support then I dont think $2.85 is out of the question by the 20th.

 

[condog]

AUT has a present valuation by euroz of $3.60.

There have been many who have made predictions about what AUT can and cant do , and basically AUT has proved most very wrong indeed, to the upside.

The two very very significant price catalysts approaching are the arrival of 2 new drilling rigs and the NSAI reserves upgrade. Both these have the potential to see Euroz upgrade that $3.60 target.

Im personally using my own amatuer target of $5.50 to $6.39 for Dec 31st 2011. I could be wrong and im unqualified , so seek good advice, do your own research and do not make decisions based on these numbers.

 

[condog]

ITs got a pretty predictable and reliable growth channell. Every now and then a CR or something holds us back for a bit, but we innevitably regain and reenter the predictable channell imo.



$2.50 and $3.00 support look pretty close in Feb and Mar. Im pretty confident Mar may see a rerating with the 4th rig arrival and the reserves report. I"d say Euroz will issue a re-rating.

25th Jan Tranch 2 will be issued at $1.60 so some increased selling may arise int he short term and slightly delay this scenario.

All opinioon so DYOR and seek good advice.

 

[condog]

Dont forget that graph above also includes a 50% increase in reserves, which imo increased most valuations by approx 50%. That clearly imo wasnt and hasnt been factored in to the sharte price even yet.

Also rememebr the Euroz valuation is still a whole $1 above current sp. Theres a lot of impending rises it would appear.

And oil up near $92 wont hurt things either.

Theres a lot of things putting pressure on an sp increase right now imo.

 

[easylikesunday]

While the above chart looks the goods, I dont think I agree with the 6 - 12 month targets or the supports. I think the 6 month target would be around the Euroz valuation ($3.60) and support at $2.35 and $2.00