AWE - AWE Limited

[buysellmestuffed]

03/06/2010 9:46AM Dow Jones AWE: Proposed New Australia Resource Tax Regime Not Material (headline only)
03/06/2010 9:46AM Dow Jones AWE: Only 3.5% Of Reserves Affected By Proposed Tax Regime (headline only)
03/06/2010 9:43AM AWE`s UBS presentation June 2010 (22 Pages)


http://www.aspectfinancial.com.au/d...lc2lnbmFsL2Vycm9ycGFnZXMvcGRmZGVsYXllZC5qc3A=

 

[Ferret]

Well, the much anticipated 2010 drilling program is drawing to its close and has achieved **** all. I remember the last big progam disappointed too.

Gotta wonder whether AWE's geology capability is up to scratch.

Still holding, but only because I can't handle crystalising the losses and will instead put them in the bottom drawer for something out of the shale play.

 

[oldblue]

Yes, AWE certainly raised expectations for its latest programme and now suffers the inevitable disappointed reaction via the SP.

But it only goes to remind us of the risky nature of the oil exploration business, even in proven oil provinces such as offshore Taranaki. Meanwhile, AWE's still making good income from its four producing fields.

I'm holding.

 

[vincent191]

The sharemarket is so fickle, if oil is so easy to find we will all be millionaires. Sure AWE's 2010 drilling program had been disappointing but it hardly justify the sp dropping 40%.

I will still hold, AWE still has a lot of good prospective drilling targets and they are still profitable and no debt. Pity I have run out of funds otherwise I will accumulate a little bit more, there are worst punts out there than AWE.

 

[mr. jeff]

The sharemarket is so fickle, if oil is so easy to find we will all be millionaires. Sure AWE's 2010 drilling program had been disappointing but it hardly justify the sp dropping 40%.

I will still hold, AWE still has a lot of good prospective drilling targets and they are still profitable and no debt. Pity I have run out of funds otherwise I will accumulate a little bit more, there are worst punts out there than AWE.

yeah I'm with you on the fickle market, however there may be more to this situation relative to the broker commentary of "overreaction" as they are pumping their reserves down now and not extending reserves.

Does anyone have the interest in performing a cash flow valuation on AWE as they are getting down to exceptionally low SP levels...? or have they a valuation on the worth of AWE with just existing assets and current production? I see that one of the big firms has just put a $2.40 price target on them....

I own AWE - unfortunately.

 

[oldblue]

Personally, I've never seen much value in trying to "value" oilys - and the market doesn't seem to take much notice either.

Too many unknowns/variables, such as future value of reserves when actually produced; how much of those reserves will actually be recovered; how quickly will cash be burned on exploration, etc. Shareprices rise and fall on expectation/realisation of success with the drill.

 

[mr. jeff]

Personally, I've never seen much value in trying to "value" oilys - and the market doesn't seem to take much notice either.

Too many unknowns/variables, such as future value of reserves when actually produced; how much of those reserves will actually be recovered; how quickly will cash be burned on exploration, etc. Shareprices rise and fall on expectation/realisation of success with the drill.

Fair call there, that does make sense.
Does this exploration hiccup (lets call it that until we've managed to lose all our money with AWE) raise the likelihood that they will burn more earnings on exploration commitments to try and chase down good news? what is the usual track they take? My previous comment referenced their good earnings, but they might not necessarily make it anywhere near the bottom line of their annual report at this rate.... thoughts?

 

[jancha]

Awes quarterly out & down 4% today.
I Didn't think their quarterly was that bad and yet the drop.
Unless it has more to do with the announcement of the manageing director Bruce Woods giving notice.
Any thoughts Old blue & Co

 

[Agentm]

OUTLOOK

The June quarter has been disappointing for the company
and our shareholders. The New Zealand drilling program
to date has not produced any major success and this has
been immediately reflected in the steep decline on AWE’s
share price. By any measure, and notwithstanding the high
risk nature of the oil and gas exploration business, the past
quarter has not lived up to our aspirations in our quest to
grow the company and provide shareholder wealth.
There has been some success in the overall AWE drilling
campaign; in the Perth Basin, in Yemen and in the Bass
Basin. In the Perth Basin, the Redback-2 well encountered
an extension to a small gas discovery and will be tied
into the production facilities shortly. In Yemen, the Al
Meashar-1 well has recovered oil from a complex fractured
basement reservoir. The second well in Yemen has also
seen some initial encouragement. A successful appraisal
of the Trefoil gas field was also delivered earlier in the
year. These wells lacked the high profile and associated
potential of the large New Zealand program and may be
overlooked in the share price decline.
The board and management team will review the results
of this drilling campaign, in which substantial data has
been acquired, and subsequent study could lead to the
identification of further opportunities in the Taranaki
Basin.
In parallel with these events, the core production business
has continued to perform well in line with guidance, with
annual oil and gas production of 6.1 million BOE and a
strong jump in the recent production trend after the
conclusion of the BassGas maintenance program. This core
production business, based on a diversified reserve base in
Australia and New Zealand retains substantial value for the
company and its shareholders.
Our new ventures and acquisition teams have continued to
pursue opportunities for AWE and during the past
3 months the team has completed the BassGas acquisition
and successfully conducted the on-market takeover of
Adelphi.
The company remains financially strong, with solid
cashflow, a robust cash balance and undrawn lines of
credit.

 

[oldblue]

There's some good points about the quarterly, particularly confirmation that production and revenue increased following maintenance to some facilities.

But the "disappointing" word put a dampener on the market, despite there being nothing new there. Psychological more than anything else but the market moves as much on sentiment as on news.

 

[jancha]

OUTLOOK

The June quarter has been disappointing for the company
and our shareholders. The New Zealand drilling program
to date has not produced any major success and this has
been immediately reflected in the steep decline on AWE’s
share price. By any measure, and notwithstanding the high
risk nature of the oil and gas exploration business, the past
quarter has not lived up to our aspirations in our quest to
grow the company and provide shareholder wealth.
There has been some success in the overall AWE drilling
campaign; in the Perth Basin, in Yemen and in the Bass
Basin. In the Perth Basin, the Redback-2 well encountered
an extension to a small gas discovery and will be tied
into the production facilities shortly. In Yemen, the Al
Meashar-1 well has recovered oil from a complex fractured
basement reservoir. The second well in Yemen has also
seen some initial encouragement. A successful appraisal
of the Trefoil gas field was also delivered earlier in the
year. These wells lacked the high profile and associated
potential of the large New Zealand program and may be
overlooked in the share price decline.
The board and management team will review the results
of this drilling campaign, in which substantial data has
been acquired, and subsequent study could lead to the
identification of further opportunities in the Taranaki
Basin.
In parallel with these events, the core production business
has continued to perform well in line with guidance, with
annual oil and gas production of 6.1 million BOE and a
strong jump in the recent production trend after the
conclusion of the BassGas maintenance program. This core
production business, based on a diversified reserve base in
Australia and New Zealand retains substantial value for the
company and its shareholders.
Our new ventures and acquisition teams have continued to
pursue opportunities for AWE and during the past
3 months the team has completed the BassGas acquisition
and successfully conducted the on-market takeover of
Adelphi.
The company remains financially strong, with solid
cashflow, a robust cash balance and undrawn lines of
credit.

Thanks Agentm
Just a few well placed words & down she comes even though that would have been factored in prior to the quarterly.
Interesting to see what they do with ADI's old set up.
Any chartist with likes of Nun ect see where AWE is heading?
Seems to be holding around the $1.60 mark.

 

[jancha]

Thanks Agentm
Just a few well placed words & down she comes even though that would have been factored in prior to the quarterly.
Interesting to see what they do with ADI's old set up.
Any chartist with likes of Nun ect see where AWE is heading?
Seems to be holding around the $1.60 mark.

Not too many parties from the ASF interested in Awe by the look of it.
Glad i got in at base cost $1.59. Up 6.5% today & looking positive.

 

[mr. jeff]

YEah good work, but be careful.
P/E is still high, earnings are not going to improve that much so there is still some significant factoring in of discoveries. It appears to be good buying relative to previous prices, but is it going to recover quickly? It may just be because of the temporary bullish market performance...Was considering beefing up my position, but not until there is some reliable info out there. For now though you seem to have picked the bottom, well done!

 

[skyQuake]

Citi upgraded it today - saw some decent buying. Posted some bullish stuff about it todday
..................................................................

 

[jancha]

YEah good work, but be careful.
P/E is still high, earnings are not going to improve that much so there is still some significant factoring in of discoveries. It appears to be good buying relative to previous prices, but is it going to recover quickly? It may just be because of the temporary bullish market performance...Was considering beefing up my position, but not until there is some reliable info out there. For now though you seem to have picked the bottom, well done!

Cheers mr jeff & agree with what your saying.
Hence selling half at $1.72 for 10% profit today.
Keeping the remainder for medium to long term & if they fall significantly back down i'll probably pick up the half i sold back up.
They have been disappointed of late but still have a lot of other nice prospects out there & only need something half positive to head north into the $2 range.
Imo

 

[nioka]

I used to hold AWE but decided that their production was only funding their wildcat exploration. I sold. Recently when they "stole" ADI I thought about getting back into them on account of the ex ADI leases and their bright prospects. I believe that they may save AWE. However if it is the ex ADI assets that will prove the best earner for AWE then wouldn't it be better to buy into companies that are concentrated on devellopment of that field. Therefore the funds that I may have put into AWE have gone into AUT and EKA. That's my decision and so far I can see no reason to change. If there is an SP rise in AWE it may pay to look to see if that rise is really attributable to the Sugarloaf assets.

I am assessing AWE as a possibility to do swap trading with AUT and EKA but my opinion is that it is the dearer of the three.

 

[jancha]

I used to hold AWE but decided that their production was only funding their wildcat exploration. I sold. Recently when they "stole" ADI I thought about getting back into them on account of the ex ADI leases and their bright prospects. I believe that they may save AWE. However if it is the ex ADI assets that will prove the best earner for AWE then wouldn't it be better to buy into companies that are concentrated on devellopment of that field. Therefore the funds that I may have put into AWE have gone into AUT and EKA. That's my decision and so far I can see no reason to change. If there is an SP rise in AWE it may pay to look to see if that rise is really attributable to the Sugarloaf assets.

I am assessing AWE as a possibility to do swap trading with AUT and EKA but my opinion is that it is the dearer of the three.

Hi noika
From a trading perspective Aut & Eka dont seem to be moving much at present.
I saw Awe as an opportunity buy as i felt it had been oversold on their disappointing announcements.
Awe are still earning good capital with no debt.
Although depleting reserves they still have many prospective holdings.
There is speculation as to why AWE went after Adi.
In huntleys review it states that it's reasons for taking over ADI could be because of it's 19% interest in Yeman, or to gain experience from the shalegas play (as well as the obvious turnover) for their future WA shale gas project closer to home.
Anyway i do hold AUT also but atm its just going sideways.

 

[The_Snowman]

Chart update since last posting July 5, see posts 137 & 138

I believe general market conditions may be heading lower; will post again in September and October

 

[mr. jeff]

Is it about to start looking brighter for AWE ?

they seem to have wells in good production again and are still pulling plenty of product up.
Does the chart offer any clues - I look at the reducing volume and think that perhaps the selling is beginning to fizzle. Maybe no re-rating until they have some successful exploration again ?

 

[roland]

Must be getting close for a good entry into AWE. The little range triangle thingy is closing, volume is falling away with some signs of seller exhaustion with each test of the low.

I believe that we should now be looking for a final high volume break to the low to clear out the weak holders and sub $1.47 stop lossers.

What do ya reckon?