BNL - Blue Star Helium

[pilots]

Hi Pilots/all

990T of prop seems a lot is that indicative of them going for some big fracs or are they suffering leak-off / leaching issues..(Although Petrohawk have stated they are trippling thier frac volumes of late as well)....How many fracs where they doing down this one??

Also how many current wells have they got underway and where/when are they getting the capital for the 10 wells in 2010, they seem a lot short on cash at present with 1.9M and Q costs of 9M..

I like there 10 /20/35 plan, nice and aggressive and their operators seem high class...

No leak off, I think it was 11 fracks, the last AGM they was talking of around 100 wells. They will now have to watch out that some one will want to buy them out.

 

[condog]

Todays announcment is fantasticlly positive

Antares Energy is thrilled to announce the Initial Production (IP) rate of the Frances Dilworth No. 2H is 790 Bo/d and 900 Mcf/d with an initial flowing tubing pressure of 4,500 psi on a 22/64” choke. The well is flowing 53 API gravity oil and 1,300 MBTU/Mcf gas. This equates to a 15.4 Mmcfe/d rate on an 18:1 revenue equivalency basis accounting for the quality of the liquids rich gas.

How long till similar value is recognised in AUT, ADI, EKA ?

Disc - I own DYOR etc

 

[pilots]

I don't think that the well will have finish unloading all the frac fluid yet, you could find they will come back in the next few days with a better flow rate, when you add up the Dollars, then multiply that by 35 you have one hell of a income.

 

[condog]

DJIA up this morning, possibly yesterdays fantastic news might get noticed and built in a bit more....

 

[pilots]

Looking at the trading yesterday and to day, it looks to me like a big holder want out real bad, cant see the SP moving until the next well comes on line.

 

[condog]

Looking at the trading yesterday and to day, it looks to me like a big holder want out real bad, cant see the SP moving until the next well comes on line.

They cant be too big or theyd be required to report.... although there is more sell pressure then lately
I wouldnt go worrying...they will need a cap to keep going, but they now have some good cash flow and will attract easy capital with that online...

 

[condog]

Looking at the trading yesterday and to day, it looks to me like a big holder want out real bad, cant see the SP moving until the next well comes on line.

Theres actually a disclosure notice just been added, but its a director buying 28000 shares, nothing worth batting an eye lid over though..

 

[condog]

Patterson Research report from AZZ website - bear in mind this is written in december before the report of Dilworth 2H flow..which was extremely positive on 1 feb 2010
Full report here: Disc - no responsibility is taken for external links by me or ASF....I own DYOR ...
http://www.gtp.com.au/antaresenergy/inewsfiles/2009 12 22 AZZ Patersons.pdf

We maintain our speculative BUY recommendation with a price target $0.90/sh. Our valuation is based on a full field development of the existing acreage at the Yellow Rose, Blue Bonnet and Hawkville projects risked at 20%. With geological and mechanical risk at a minimum, our risking is a function of progress towards certification of the modelled 2C resources. Hence we view the booking of reserves as the key driver to value, as would any potential acquirer and will look to upgrade our valuation as reserves certification is progressed.

Summary
●
The Eagle Ford Shale is an early stage yet highly prospective resource play. The shale play is concentrated along a ~40mile stretch across the LaSalle and McMullen counties in Texas, USA. A number of companies have been very active in the shale, including local operator and JV partner Petrohawk. A success rate of 100% has been reported to date with 53 wells successfully drilled in the shale. Rock properties are very similar to the highly productive Barnett and Haynesville shales with net/gross of ~100%, gas saturations in excess of 80% and EUR’s of 4-7bcfe per well. The key to the shale is the high condensate yield which is commonly in excess of 100bbls per mmscf and observed to increase towards AZZ’s acreage.
●
Major US companies are moving to secure acreage. Petrohawk has amassed over 210,000 net acres including the JV area shared with AZZ. Other majors include ConocoPhillips, Apache, Anadarko, Murphy oil, Pioneer and more. In recent news, BP has entered into an agreement with a local private company Lewis Energy, to drill and produce wells on at least 100,000acres.
●
AZZ has a substantial holding of Eagle Ford shale. AZZ has net interest in over 32,586 acres, prospective for Eagle Ford shale. The company’s acreage is largely covered by 3D seismic and has independently certified resources of 840bcfe and 298bcfe estimated at its Yellow Rose and Blue Bonnet projects, respectively (net 2C), plus an estimated 480bcfe of gross resources in the Hawkville term assignment area.
●
Results to date indicate high flow rates with considerable condensate yield. Results for 14 wells in the surrounding acreage range from 6 to 11.3mcfe/d with an average initial production rate of 8.8mmscfe/d. AZZ recently reported the results of production modelling study completed by NuTech, which concluded a forecast flow rate for the Frances Dilworth No. 2 of 11.4mmscfe/d and an EUR of 6.25bcfe based on core samples and wire-line log results.
●
Our analysis indicates a highly profitable shale. Based on the NuTech results we have developed a full field model to produce the total estimated resources across the 3 project areas over a 20 year timeframe. The results of the analysis indicate a post-tax NPV of more than $1/mcfe and unrisked upside of ~$4-5/sh.
●
AZZ is at a pivotal point. The Frances Dilworth 2H was the first well drilled on AZZ’s Eagle Ford acreage. Testing of the well is likely to be conducted early in the year following the completion of an 11 stage fracture stimulation procedure. A successful flow testing result will demonstrate that the Eagle Ford shale is productive and inline with expectations and ratify ~1.38tcf of resources estimated across AZZ’s acreage. The significance of the result is that, unlike conventional oil and gas, a positive result in a resource play essentially de-risks the entire resource.
●
Reserves to drive Growth. Definition of reserves across AZZ’s interests will be progressed as further wells are completed. The number of wells to book reserves across its total acreage is not clear at this stage however, we hope to gain further insight when AZZ books its maiden reserves – targeted for the June Q following the completion of 2 more wells in the March Q. The reserves not only de-risk the play but provide a value benchmark for the market and underpin value that a potential acquirer would be willing to pay. For this reason we view progress towards certification as a key valuation tool and risk AZZ on this basis.
●
Low Risk / High Value proposition. We perceive AZZ as a low risk play with considerable upside to be gained as a result of the successful testing and delineation of a productive Eagle Ford Shale gas reserve across it expansive acreage position. Given the strong flow rates and high condensate yields demonstrated to date in adjoining acreage coupled with the 100% drilling success rate experienced thus far, we view the geological and drilling risk as low.

 

[condog]

And then yesterdays Patersons target is upgraded to $1.03

We have upgraded our recommendation from speculative to a BUY with an increased price target of $1.03/sh. We have increased our Yellow Rose valuation, moving from a 20% to 25% risking to mark progress towards booking reserves and de-risking the modelled 2C resource. Our valuation utilises a full field development based on the NuTech modelled rates but will look to readdress this as more production data becomes available.

Disc - ASF and me take no resposibility for external links...DYOR
Full report:
http://www.gtp.com.au/antaresenergy/inewsfiles/2010 02 03 AZZ Patersons.pdf

 

[pilots]

One thing that has been over looked by every one is that the flow tests we are looking at are the INITIAL PRODUCTION RATES, Now this frack has had around 900tons of frack sand pumped down the well with one hell of a lot of water, now that water will be unloading for quite some time, it would not surprise me if they give us a new flow rates this week thats better than the first flow rates. You wont get the true value of the real SP until they get three wells on line, then watch your back, they will all be coming at us.

 

[condog]

One thing that has been over looked by every one is that the flow tests we are looking at are the INITIAL PRODUCTION RATES, Now this frack has had around 900tons of frack sand pumped down the well with one hell of a lot of water, now that water will be unloading for quite some time, it would not surprise me if they give us a new flow rates this week thats better than the first flow rates. You wont get the true value of the real SP until they get three wells on line, then watch your back, they will all be coming at us.

And as in the case of Kennedy for ADI AUT.... they probably have not run tubing...in which case that should see some improvment as well...

 

[fureien]

argh i totally forgot to buy back in after i took profits the other day. realised around midday and chased it till it ran to 69c no point after that. kept not getting filled. then it runs to 72.5c -_-

/tilt/

totally no idea what i shud do now. buy when its high cause it might run more or wait till ppl take profits again. cause the sp hasnt exactly been that stable

 

[condog]

Market whispers on Goolge news indicate BP might be the announcment.
http://www.upstreamonline.com/live/article207007.ece

 

[skyQuake]

actually its a cap raising of 30mil shares at 64c (placement)

Don't think there's a SPP though.

There was a SPP last Sept at 25c though

 

[condog]

AZZ good prospects but exp compared to others for now. Im in a waiting pattern on it at the moment....

Will wait to see what it does with the 19.2M it just raised.

 

[gerkin02]

Condog,they have a 9 well programme for this year.

What do you think they will do with the money?

Drill wells perhaps.

 

[condog]

Condog,they have a 9 well programme for this year.

What do you think they will do with the money?

Drill wells perhaps.

ITsw the types and location plus per well cost im waiting to see. When they announce the drilling program, i will re-assess. In the mean time enjoy, its up nicely this afternoon. Best luck to all.

 

[Slipperz]

ITsw the types and location plus per well cost im waiting to see. When they announce the drilling program, i will re-assess. In the mean time enjoy, its up nicely this afternoon. Best luck to all.

Surely some news this week re FD2 cleaned up flow rates and/or spud date for FD3 ?

Hopefully the sophisticated investors who are now onboard after the SPP are in for the drilling program and not out for a weak 10% cash grab.

Monday's trading will be telling

 

[gerkin02]

Some very interesting share price movement today,up to a high of .82c.

News must be pending or perhaps a please explain from the asx.

All the best.

 

[pilots]

Once they start drilling this next lot of wells you will see some REAL movement in the SP, James has not started his race yet. If this keeps up I can see a take over coming our way soon.