EKA - Eureka Energy

[nioka]

Just curios, and I don't want to get to personel but what is the thinking behind selling AUT to buy others taking into account the news AUT is coming out with and the next growth targets it's showing.
I'm not trying to be smart here- just learning.

For years now I have "swap" traded between AUT, EKA and ADI as the relative prices changed. That has been highly profitable. (I have posted some of those trades over the years to back up my statements that were the subject to some doubting criticism.)

Starting out with 5000 ADI and ending up with over a million ADI and some EKA and AUT. When ADI was taken over I invested half the ADI proceeds into equal roughly parts AUT and EKA and continued to trade between those two. Lately I have included TXN into the equation.

EKA has usually lagged behind but finally catching up on a relative value basis. To catch up now EKA needs to come up with some good news on two fronts. Firstly on an update on income from Sugarloaf. Secondly on news that it has good prospects for income from new lease areas.

 

[yma]

These days AUT and SEA are performing good, this make EKA a bit out of popular, it the SP remain in the current level it might become a good take over target.

 

[jancha]

These days AUT and SEA are performing good, this make EKA a bit out of popular, it the SP remain in the current level it might become a good take over target.

I tend to agree with you but unlike ADI EKA doesn't have the likes of AWE holding 33% of their shares so any form of take T/O would have different consequences imo.
Any T/O would imo wouldn't be taken so lightly as ADI.

 

[Kremmen]

aut is being admitted to the asx200 by s&p

this will help drive the aut sp in the near future as asx200 funds acquire the appropraite weighting in aut

it should follow that the previous aut:eka ratio adjusts to reflect this

It should just be a short-term blip, but I don't know how short. I wonder how quickly those index funds respond to ASX200 weighting changes?

Anyhow, what it means is that the AUT buyers are simply paying a premium for being in the ASX200, which should make other, similar stocks relatively more attractive.

 

[jancha]

It should just be a short-term blip, but I don't know how short. I wonder how quickly those index funds respond to ASX200 weighting changes?

Anyhow, what it means is that the AUT buyers are simply paying a premium for being in the ASX200, which should make other, similar stocks relatively more attractive.

Thats why i wouldn't jump ship atm as i have in the past between the two. I don't quite follow why the interest in EKA over the last few months has waned but i think the value is even more prominent now. EKA imo has a bigger upside than AUT with the current sp as it stands.

 

[yma]

very big volume today with no share price difference so far, any idea? good day coming soon i guess...

 

[nioka]

very big volume today with no share price difference so far, any idea? good day coming soon i guess...

It's hard to work out today's trading. I would have expected that volume like today would have caused a fair change in the SP one way or another. A drop for a sudden sell in volume or a spike for sudden demand. So maybe we have had both at the same time with one offsetting the other. Probably it is a seller that has been waiting for demand to increase so they could sell at a profit without crashing the price. If so then how many have they left to sell?. I certainly want more than 30c for mine.

 

[Sdajii]

It's hard to work out today's trading.

I'm just some faceless idiot from the internet with a near worthless opinion, but my guess is that there is someone sitting there patiently wanting to sell out, willing to take prices around what we're seeing, and they may have been there quietly for some time, and someone else, or maybe a few people have started wanting to accumulate, thus buying out the seller, or maybe sellers. Once the seller(s) dry up we might see a run, which is what you'd expect with a 6:1 EKA:AUT ratio.

As I said, I'm just some inconsequential internet personality carrying little credibility and I could be completely wrong.

 

[yma]

The share price for AUT for the last 6 months has increased by 117.26% and 39.53% for EKA, the price gap is getting larger from Sep 2010 till now, AUT is doing really well and hopefully EKA will do a catch up soon.

 

[Assasin]

With AUT's recent news, am I wrong in thinking this may take a few buyers away from EKA?

 

[Sharejon]

We'll see I guess. I wouldn't think it'd have a major effect on EKA. EKA have stated that they have intentions to purchase more land.

The fundamentals and the current results are too good for the current EKA valuation imo. With 4 wells due within the next 4-5 weeks or so, our production should increase from 480 boepd, to 750ish. This will bring a re-rating, I'll assume to 40c. If this assumption proves to be correct (40c in roughly 6 weeks) then I'd like EKA to do a cap raising at 35c (to us shareholders, not this sophisticated rubbish) and purchase some more acreage.

We bought our last block of land in the Eagleford Region, 761.5 acres (Oil Fairway) for $821,500 + 900,000 EKA shares. At the time (20th of August) EKA closed at $0.29, so let's say that we purchased the land for 1.0825 million. That's equal to $1421.5/acre. How cheap is that!

By March/April next year EKA is aiming to have 18 wells producing (currently 7), so once this occurs it'd be good to have even more acreage in our portfolio, for the future. By that time, at 1100+ boepd and a positive cashflow (in the sense that our Hilcorp expenses have been paid off) we'll have some nice revenue flow which will be great for the expansion of Eureka.

 

[Sharejon]

Personally, I believe that we could be 40c + within a few weeks if the completed wells come good.

At that stage I'd actually like EKA to have a SPP 5c below the current share price to fund some more land acquisitions.

I think it'd be wise to wait until the SP hits 40c, because we recently had a sophisticated cap raising at 30c, and even more dilution at the same price could spell desperation to some investors. Even though it'd be a positive thing for the company imo.

 

[Assasin]

Cheers Sharejon
That certainly would be cheap but I don't think it's achievable considering what AUT just paid. I know it's appples verses oranges but it's got to be relative.
Not suggesting that it be any where near 24k per acre though, but that sure sets a benchmark in the region and just might cause a few to stand up and listen. Could change a few strategies.
Absolutely agree with you on a re-rating.

 

[adobee]

EKA still sitting cheap whilst the rest of the players move forward.. SEA, AUT, TXN, .. considering what AUT has just paid for more acerage I think EKA would look like a very cheap takeover with immediate cashflows... Jumping on board for anything below or equal to 29c ....

 

[philly]

EKA still sitting cheap whilst the rest of the players move forward.. SEA, AUT, TXN, .. considering what AUT has just paid for more acerage I think EKA would look like a very cheap takeover with immediate cashflows... Jumping on board for anything below or equal to 29c ....

yeah I reckon that you are spot on adobee, this one is a sleeper whilst the others move forward. It is a good buy at this price and I note that on 9/12/10 director Mark Wilson purchased 800,000 more shares. I expect there could be a run on this shortly as investors look for a cheap entry point to enjoy the success of the Eagle Ford

 

[Sdajii]

yeah I reckon that you are spot on adobee, this one is a sleeper whilst the others move forward. It is a good buy at this price and I note that on 9/12/10 director Mark Wilson purchased 800,000 more shares. I expect there could be a run on this shortly as investors look for a cheap entry point to enjoy the success of the Eagle Ford

800,000 shares at 30 or 30.5c from a director, on market. A pretty good endorsement! I heard on poor authority that it would have been cheaper per acre to obtain land by buying EKA than what AUT has just done. Can anyone confirm that? If it's true, EKA is absurdly undervalued and an obvious takeover target. My calculations say that taking over EKA would have been a smaller move than the recent AUT acquisition.

 

[philly]

I heard on poor authority that it would have been cheaper per acre to obtain land by buying EKA than what AUT has just done. My calculations say that taking over EKA would have been a smaller move than the recent AUT acquisition.

Takeovers can be costly, messy and drawn out affairs. For example look at ADI and there AWE already had a 30% interest before making its bid and it had Board support.
The deal that AUT was able to achieve is simple because it adds to its existing proven interests in the Sugarkane. So no fuss involved. It also gets new exposure to the nearby Excelsior field. The deal is backdated to 1/12/10 so AUT gets the benefit [revenue] from the extra production immediately.

Whilst AUT may not have been interested in a takeover of EKA that is not to say that if it remains at this price it will be vulnerable

 

[Sdajii]

Takeovers can be costly, messy and drawn out affairs. For example look at ADI and there AWE already had a 30% interest before making its bid and it had Board support.
The deal that AUT was able to achieve is simple because it adds to its existing proven interests in the Sugarkane. So no fuss involved. It also gets new exposure to the nearby Excelsior field. The deal is backdated to 1/12/10 so AUT gets the benefit [revenue] from the extra production immediately.

Whilst AUT may not have been interested in a takeover of EKA that is not to say that if it remains at this price it will be vulnerable

Those are some good points, and that explains why AUT might have done what they did without buying EKA first (as well as the fact that people may dislike a company exhibiting such hostility). But even so, if a company like AUT is delightfully gobbling up land and wells at a price greater than EKA's relative market cap, surely that screams out that EKA is heavily undervalued... which I suppose is what lots of people are already saying here for several reasons. It's just another demonstration of it, I suppose.

Happy to be holding and expecting a run before long

 

[chiasm]

Great day for AUT and it looks like EKA went along for a ride as well. Lets hope it keeps going!

 

[adobee]

Looks like a few buyers stacking up.. directors buying up, other companies buying up as much land as they can get there hands on in the area, big buyer at 30c, things are looking good !