BCC - Buccaneer Energy

[prawn_86]

Just released:

The Company requests a trading halt pending the finalisation of a finance facility with a major Australian bank.

Thats what i like to hear. Now i wont be left wondering over the weekend.

Obviously some form of debt facility/overdraft type thingo. Much better than a equity based capital raising imo.

good to see management are continuing to keep promises.

 

[jtb]

Just released:




Thats what i like to hear. Now i wont be left wondering over the weekend.

Obviously some form of debt facility/overdraft type thingo. Much better than a equity based capital raising imo.

good to see management are continuing to keep promises.

Good on you Prawn, going nicely

Bet your glad I pointed the bone @ EXR
Equity raising (cough) rights issue (cough).

 

[prawn_86]

Good on you Prawn, going nicely

Bet your glad I pointed the bone @ EXR
Equity raising (cough) rights issue (cough).

LOL.

But seriously, i am glad that BCC took the debt option rather than a rights issue which would cause a stagnating price and dilution

 

[watchingall]

Did any of you see some of the coverage on YouTube about these guys..

http://www.youtube.com/watch?v=uYvmg7kyH0Y

And further I found an article from the CEO
http://www.worldenergysource.com/articles/text/burton_we_v10n3.cfm

 

[prawn_86]

Ann out:

BCC Secures $5million Finance facility with Macquarie.

They will use the money to drill the 3rd Pompano well.

Are looking to expand the facility and will announce within the next month or 2.

Good announcement IMHO. Mac Bank are Aus's biggest investment bank, like them or not. Also, the thing i like is the fact that only 2 months of production and it can be paid off.

Using it for the next Pompano well will increase cashflow quickly once again.

Then if they are awarded Jaguar they can use their profits to pay for that.

All falling into place

Only thing i didnt like was the low issue price of the unlisted options. Mac bank are already getting the interest off the loan and they also get some options that are pretty much in the money also. I would have liked to have seen them 10c higher at 50c.

 

[prawn_86]

Well all the talk seems to be about oil going up, but so are natural gas prices, hence the popularity of CSM plays of late.

However, why bother with speculative plays when you can get profitable micro-caps?

Just looked on Bloomberg and the gas price is now $13 per mcf so this means that they will be pushing the upper limits of the $2.5 mill profit per month that was given in the BRR recently.

If prices stay where they are we can safely assume they will make $2.5 mill per month so this would means $18 mill profit by years end if they did nothing else.

However they also have the $5mill finance facility with Macquarie to get the next Pompano up and flowing ASAP.


My opinion as to the rest of the year (not based on co reports):

2 more pompano wells. Both should flow, hence increasing revenue.

Purchase of Jaguar

Drill Lee County in Dec, anything could happen here.

Im tipping a profit at years end of about $2 - 3mill. Not bad for a co that will only have been liset for 14 months in Dec and has a current MC of $50 mill

 

[james99]

Thanks for this Prawn. V interesting company. I agree re the benefit of small cap producers; I watched the webcast and they seems very motivated and capable (insofar as you can tell).

 

[prawn_86]

Yes management have achieved everything they set out for and more. I have nothing to fault them on yet.

The O&G conference presentation was extremely positive, yet reserved, which to me, shows they are happy just going about their business and dont feel the need to ramp themselves as their actions will speak for them.

Below is some sums based on market prices, not conservative like my last ones.

BCC Interest in Pompano
65% of 16000 is 10400. And of 60 is 39.

Assuming $12 per thousand cubic feet and $110 pb of condensate.

Gas = $124800 per day
Condensate = $4300 per day
Total = $129k per day

Total * 365 = $47million

Minus say 20% for hurricanse and unexpected closures, slower flows etc etc still gives $37.5 million.

Divide by 150mill shares = 25 cps

This puts current PE at a minute 1.44


Obviously this is at the ultimate level, and their earnings will be lower as they will drill more and acquire new projects etc, but it has massive potential, even more so in current macro climate.

 

[hookon]

G'day Prawn 86

Nice job.

Looks like your going mad talking to yourself!!! LOL!!!

I got a tip in the last two weeks for this coy & have jumped in @ 36.5 cents.

Was told they should be worth or head towards $0.80 - $1.00.

Unfortunatelty for you i can provide very little interesting conversation as i know Sweat FA about O&G just taking a punt on a source who has some themselves & was right last time.

Look forward to reading your conversations with yourself. LOL

If feel like bagging someone or just to know someones out there just call & ill provide useless information on request.

 

[prawn_86]

Natural Gas Advances to 29-Month High as U.S. Dollar Slides

By Mario Parker and Aaron Clark

June 16 (Bloomberg) -- Natural gas advanced to a 29-month high after the dollar declined the most against the euro in more than a week

Natural gas for July delivery advanced 30.8 cents, or 2.4 percent, to settle at $12.933 per million British thermal units at 2:56 p.m. on the New York Mercantile Exchange. Futures earlier touched $12.99, the highest since $14.271 on Dec. 21, 2005, and have climbed 73 percent this year. On the trading day closest to this one in 2007, gas closed at $7.918

http://www.bloomberg.com/apps/news?pid=20602099&sid=a9YNWdk3Usu0&refer=energy




Each day the coffers are filling up, yet the SP stays the same. Must be due for a re-rating soon.

Also waiting for ann with regards to finding a rig for Pompano 3, which might then create interest as we will have another well up and running very shortly. (im tipping by end of Aug at latest)

 

[prawn_86]

Ok lets do another peer comparison, this time between MAE and BCC.

Assuming $12 per thousand cubic feet and $110 pb of condensate

BCC Interest in Pompano
65% of 16000 is 10400. And of 60 is 39.

Gas = $124800 per day
Condensate = $4300 per day
Total = $129k per day

Total * 365 = $47million

Minus say 20% for hurricanse and unexpected closures, slower flows etc etc still gives $37.5 million.

Divide by 150mill shares = 25 cps

Current MC of $53 mill


MAE Production

MAE have stated in the short term they hope to be producing 20Mcf per day which would be:

Gas = 240000
Condensate = 10000 (assumption here as i dont know exact figure)
Total = 250k

= 91 mill per year

Minus 20% risks = $72 mill

Divide by 300mill shares = 24cps

Current MC of $300 mill

Need to note that MAE have about 5x the reserves of BCC at this stage



So we can see from this that both shares are on the same EPS, however BCCs MC is about 6x lower than MAEs. Admitedly its reserves are a lot smaller, however on an earnings analysis one would suggest that BCC is undervalued.

One should also note that BCC is expected to upgrade Pompano reserves and also drill Pompano 3 soon which would increase their EPS yet again.

Lack of recognition here unfortunately

 

[Wysiwyg]

Prawn, I think you will find that 65% is working interest and not net interest.So this makes your cash flow estimates incorrect.Still, all in all, they have a very healthy margin at present gas prices and for the moment their share price is dormant for reasons unknown.

 

[prawn_86]

Sorry wysiwg im fairly new to O&G stocks.

Can you please tell me the difference between working and net interest?

I know that once all the Pompano wells are complete and the back in agreement is executed by AnaTexas BCCs interest will drop to about 52% (the exact figure is back a page or 2)

 

[Wysiwyg]

Sorry wysiwg im fairly new to O&G stocks.

Can you please tell me the difference between working and net interest?

I know that once all the Pompano wells are complete and the back in agreement is executed by AnaTexas BCCs interest will drop to about 52% (the exact figure is back a page or 2)

Sure .... working interest is the cost attributed to the company for participation/operation.W.I. = 65%.

Net interest is the percentage at which the company receives payment for sales.This is less than the working interest percentage and for BCC I don`t know what that is.

 

[prawn_86]

Sure .... working interest is the cost attributed to the company for participation.W.I. = 65%.

Net interest is the percentage at which the company receives payment for sales.This is less than the working interest percentage and for BCC I don`t know what that is.

Ok thanks for this.

The MD was quoted at the O&G conference as stating that they are receiving between $2mill and $2.5mill per month so now with gas prices even higher one would assume that its up between 2.5 - 3mill per month.

As you said, still very healthy for a company capped just over $50 mill

 

[prawn_86]

Ann out. Pompano 3 to commence.

Rig has been secured with spud to occur late July. This means that by the end of Aug it should be up and flowing and more cash coming into the coffers.

Also good to see that they have the option to keep the rig for a fourth well, providing the execute the agreement within 5 days. So if all goes to plan, by mid october we should have 2 more wells up and running, which should take the production up to about 15 - 20Mcf per day. About the same amount as MAE and look at what their price has done

Its all falling into place....

 

[Agentm]

yet to invest in this one, and somedays i wonder if i will miss the boat, the 3rd off shore (shallow) well is about to spud into the sands in a short time.. i am waiting for the austin chalks play, i seem to like that type of gas play, and in sept 08 they commence in a region i have studied and cant find any data to back up what they recently announced, but that doesnt mean i wont find those wells they got their data from!

these guys really impress me, from top to bottom this has been an absolute dream run and smooth operation.. they know their plays, each director is a specialist in one of the plays they have in their portfolio..

 

[prawn_86]

Hi Agent,

nice to see you are interested. Finally someone with O&G sector knowledge.

I would love to hear your rundown of the projects they have. In particular, Lee County (as its your Austin chalk play) and Pompano.

What is your opinon of further upgrades to the Pompano reserves and and info about the sands would be appreciated as i have very little idea! I just like the management and the cashflow

 

[prawn_86]

Recieved an email from Dean Gallegos today. He is a director and the Aus contact person for the co. As follows:

Prawn

I have been flat-out all day so sorry for the time to come back to you.

Jaguar
The MMS in the US has increased the rate of awards to a weekly basis and this is typically done on Friday’s in the US, the next one being this Friday. They still have not rejected any bids from the last auction held on the 1 April so we remain confident but just don’t know until it is awarded.

General Update
We will not update the cash position until the quarterly but needless to say it remains strong and production is going according to plans. With gas at $13 it is a good time to be producing.

We will probably do a production update after the end of the month so as to keep everyone informed, I would say the timing of this would be the week commencing the 7 July.

We are planning more PR but probably not in Australia until August/September. We are stepping up some presentations in the US after some interest from NY so will see where that leads, I think investors in the US are a bit incredulous at the valuation versus the company’s current producing assets, project pipeline plus management and see it as a buy opportunity.

As you probably understand juniors in the oil and gas sector are getting hammered at the moment, not sure why producers who are profitable should be but at this time of year all reason goes out the window maybe at the start of July a bit of sanity will come back to the market.

As we have previously stated the next 6 months are going to be very active. We only drilled 2 wells in the last 6 months but in the next 6 months that figure should be a minimum of 4 and possibly more so there is going to be a lot of news flow. We are focusing on the development / appraisal drilling opportunities and so we expect to substantially increase our production base and comfortably achieve our net US$4 million per month by December 08.

Thanks for your interest and please feel free to contact me at any time.

regards
Dean L Gallegos
Director

I have corresponded with him previously and he seems fairly switched on, and is always prompt to reply. Management have delivered on everything so far, so i cant see why they wont deliver on this.

 

[Wysiwyg]

Recieved an email from Dean Gallegos today. He is a director and the Aus contact person for the co.
I have corresponded with him previously and he seems fairly switched on, and is always prompt to reply. Management have delivered on everything so far, so i cant see why they wont deliver on this.

Hi Prawn, are not these e-mails a private matter that holds trust from the company not to be displayed in public?I`ve seen others do it and I think it is the height of disrespect.

Anyway the information is very promising and confirms they are determined to grow the company.
$4 mill. shheeesh.