EKA - Eureka Energy

[nioka]

I've held a number of shares in EKA for sometime and was wondering peoples thoughts on this share. Is this stock going to increase or will it linger around the 10c mark for a little longer?
Thank you in advance for any thoughts

I regularly trade between ADI and EKA and have done for a long time. I work on the precentage interest in Sugarloaf that both have, allow a margin for ADI's cash on hand and other interests. In my humble estimation I rate EKA at around 13c when ADI is 20c. Going on these figures I was happy to sell some ADI and buy EKA last week and probably will do so again this week. I will wait for EKA to catch up and swing the balance the other way and then I will trade back the other way and end up with more ADI than before. The balance often swings the other way. A few months ago I was able to sell EKA and buy ADI at an equal price. A rare event though.

Some of my old posts will verify this if you go back far enough.

EKA is not as popular as ADI and lags price changes.

 

[condog]

I regularly trade between ADI and EKA and have done for a long time. I work on the precentage interest in Sugarloaf that both have, allow a margin for ADI's cash on hand and other interests. In my humble estimation I rate EKA at around 13c when ADI is 20c. Going on these figures I was happy to sell some ADI and buy EKA last week and probably will do so again this week. I will wait for EKA to catch up and swing the balance the other way and then I will trade back the other way and end up with more ADI than before. The balance often swings the other way. A few months ago I was able to sell EKA and buy ADI at an equal price. A rare event though.

Some of my old posts will verify this if you go back far enough.

EKA is not as popular as ADI and lags price changes.

Very smart move Nioka - Id noticed it, but not looked hard at it...just took a look and theres some very easy 10%-20% divergences can be picked up with reasonable regularity....... that does however assume both are exposed to equal capital growth.... but not a bad strategy on its own....

 

[Kremmen]

In my humble estimation I rate EKA at around 13c when ADI is 20c.

I might even suggest you're being slightly conservative.
Here are some EKA/ADI comparisons:
book value per share Jun 09: 0.07/0.06 = 117%
52-week low: 2.6/4.5 = 58%
52-week high prior to recent rises: 14/20 = 70%
profit/share from sugarloaf: (12.5/115M)/(20/147M) = 80%

I reckon from this that a fair estimate for EKA should be around 70% of ADI. With ADI now hitting 35c, EKA might be expected to be around 24c, yet is trading at 15.5c. (My thanks to whoever sold to me at 13.5 a few days ago.)

 

[jancha]

I might even suggest you're being slightly conservative.
Here are some EKA/ADI comparisons:
book value per share Jun 09: 0.07/0.06 = 117%
52-week low: 2.6/4.5 = 58%
52-week high prior to recent rises: 14/20 = 70%
profit/share from sugarloaf: (12.5/115M)/(20/147M) = 80%

I reckon from this that a fair estimate for EKA should be around 70% of ADI. With ADI now hitting 35c, EKA might be expected to be around 24c, yet is trading at 15.5c. (My thanks to whoever sold to me at 13.5 a few days ago.)

Wasn't me i bought as well.
With all the upside to Adi Aut & Eka i cant understand why anyone would want to sell.

 

[Miner]

Wasn't me i bought as well.
With all the upside to Adi Aut & Eka i cant understand why anyone would want to sell.

Some one will sell so that you can buy

Not every one is like Pauline Hanson to print notes to increase money supply. One is to sell and one is to buy. In between the brokers to get richer. If you do want to take risk then be a broker and each transaction you feel good
I also realised the strength and connection of EKA with AUT and ADI. So bought it today. But could not understand why it went down when ADI went up

 

[nioka]

I might even suggest you're being slightly conservative.
Here are some EKA/ADI comparisons:
book value per share Jun 09: 0.07/0.06 = 117%
52-week low: 2.6/4.5 = 58%
52-week high prior to recent rises: 14/20 = 70%
profit/share from sugarloaf: (12.5/115M)/(20/147M) = 80%

I reckon from this that a fair estimate for EKA should be around 70% of ADI. With ADI now hitting 35c, EKA might be expected to be around 24c, yet is trading at 15.5c. (My thanks to whoever sold to me at 13.5 a few days ago.)

I base my values by taking into account;

1. Market caps relative to each other. SP plus number of shares on offer.
2. Cash on hand.
3. Value of interests outside the joint venture.
4. The track record of the management.
5. Cash burn.
6. Company risk (individually).
7. Liquidity. Ability to trade reasonable numbers at short notice.
In that order of importance. Each one is important.
8. Brokerage.
9. Tax implications on the trades.

Being conservative is not considered. It is a value trade.

 

[nioka]

I should add that I am buying EKA and AUT without selling ADI this week. I believe all have room to move. EKA is especially good value according to my calculations. The results of the fracs speak for themselves.

I walk the talk.

 

[prgudula]

ASX RELEASE
3 March 2010
SUGARLOAF OPERATIONS UPDATE
Eureka Energy Limited ("Eureka") is pleased to provide the following update to the market on operations within the Sugarloaf AMI.
Morgan-1H
Eureka has been advised by the operator Hilcorp Energy ("Hilcorp") that the second farm in well within the Sugarloaf AMI, the Morgan-1H well, was spudded on Friday, 26th February (US CST). The well is located approximately 5 km North West of the Easley-1H well and is expected to take approximately 6 weeks to drill to TD. The well design includes a vertical pilot hole prior to drilling a horizontal section that will access both the Austin Chalk and Eagle Ford horizons following fracture stimulation.
Easley-1H
As at 0730 hrs on 2 March 2010 (US CST) the well was drilling ahead at a depth of 15,535ft (MD) with approximately 2,800 ft of horizontal section now having been drilled within the reservoir. Elevated gas readings have been observed since penetrating the reservoir.
Kennedy-1H and Weston-1H
Both wells continue to produce to sales in line with expectation. Production tubing has yet to be installed in either well and further updates on production rates will be provided once this has occurred and stable flow rates have been established.
Eureka has a 12.5% working interest (pre-farmout) in the Sugarloaf AMI. Other ASX listed participants in the Sugarloaf AMI, and their respective pre-farmout working interests are:
Aurora Oil and Gas Limited 20%
Adelphi Energy Limited 20%
Yours sincerely
EUREKA ENERGY LIMITED
Graham Dowland
Chairman

 

[Miner]

TRADING HALT FOR EQUITY RAISING.
Will it for again a lot of sophisticated investors at the cost of existing shareholders ?

We have to wait until 10 Dec to learn it

 

[Agentm]

TRADING HALT FOR EQUITY RAISING.
Will it for again a lot of sophisticated investors at the cost of existing shareholders ?

We have to wait until 10 Dec to learn it

10 march 2010 miner.. i dont know where the 10 dec comes from but my research tells me 10 march latest..

EKA previous trading halt for a cap raising came with a clanger of an announcement the same day. which took the share to a 100% gain for the sophisticated investors b4 they resumed trade. not sure if this will be a repeat, but would like to see news come through on ops none the less..

good luck to all investors

 

[Miner]

10 march 2010 miner.. i dont know where the 10 dec comes from but my research tells me 10 march latest..

EKA previous trading halt for a cap raising came with a clanger of an announcement the same day. which took the share to a 100% gain for the sophisticated investors b4 they resumed trade. not sure if this will be a repeat, but would like to see news come through on ops none the less..

good luck to all investors

It was a typo Agentm.

I meant to be writing March which was stated in the attachment as well.

Thanks for being vigilent

 

[estseon]

Nothing from EME so perhaps EKA is going it alone. ADI seems quite strong enough and AUT seems ok until post-carry on Longhorn and Ipanema.

The timing is a bit of a puzzle.

 

[Miner]

Good sense prevails

The EKA has announced its capital raising. Unlike many current capital raising the shareholders registered until 19 March are privileged to get discounted offer @10 cents.

It is unknown however how much the price will move south as ex rights


Please see attached document for further details

Cheers
PS : I hold a small parcel

 

[nioka]

Good sense prevails

The EKA has announced its capital raising. Unlike many current capital raising the shareholders registered until 19 March are privileged to get discounted offer @10 cents.

It is unknown however how much the price will move south as ex rights:confused

I suggest that the need for capital raising has been factored into the SP. The fact that the existing shareholders are to benefit by getting the discounted price and not the usual"funds and sophisticated investors" is a plus and I can see no reason for any drop in the SP.

 

[rock86]

I suggest that the need for capital raising has been factored into the SP. The fact that the existing shareholders are to benefit by getting the discounted price and not the usual"funds and sophisticated investors" is a plus and I can see no reason for any drop in the SP.

I can't see any reason for it to move south either (I don't hold EKA but hold ADI) and don't see a reason for any of the JVP's to be moving south, I myself won't be selling for a while cause there is still a hell of a lot of money to be made on the JVP's. But for some reason on the back of this capital raising Im going to bet that EKA does drift south, even though it shouldn't all IMO

 

[estseon]

It's underwritten so they must have had a good story to tell. Perhaps we'll hear it one day

Don't hold.

Good luck holders. It's not a race. It's a charge.

 

[Miner]

I suggest that the need for capital raising has been factored into the SP. The fact that the existing shareholders are to benefit by getting the discounted price and not the usual"funds and sophisticated investors" is a plus and I can see no reason for any drop in the SP.

I can't see any reason for it to move south either (I don't hold EKA but hold ADI) and don't see a reason for any of the JVP's to be moving south, I myself won't be selling for a while cause there is still a hell of a lot of money to be made on the JVP's. But for some reason on the back of this capital raising Im going to bet that EKA does drift south, even though it shouldn't all IMO

Thanks folks for your good thoughts and I wished that may be the case.

However as you could see our thoughts are not shared by market today lowering the price of EKA already at 12 cents :

Trade of EKA occurring on Thursday, 11 Mar 2010
52 Week
Time Price Volume Value Condition
11:15:45 AM 0.120 24,000 2,880.00
11:03:27 AM 0.120 83,000 9,960.00
10:08:09 AM 0.130 50,000 6,500.00
10:02:12 AM 0.130 25,000 3,250.00

 

[barney]

I can't see any reason for it to move south either .
But for some reason on the back of this capital raising Im going to bet that EKA does drift south, even though it shouldn't all IMO

Howdy Rock,

There will be a few larger holders who will be happy to unload shares at anything above the entitlement issue price simply because it is basically "free" money, cause they just can just top up again with the 10 cents issue price.

What you may see though, is once the record date (19th March) comes around, the "cheap" shares offered up to that point will disappear real fast ............ Good chance for punters to get in if they have been waiting for an opportunity ...... If the play is as good as it looks, an average buy in price of anywhere around 11 cents should look pretty good value into the future .... Cheers.

 

[estseon]

barney,

It's quite possible that some of the selling of ADI & AUT is by investors looking to release cash to take up the rights as well. I don't feel that too much regard should be paid to price wobbles during a period when portfolio adjustment can be expected.

I hold ADI, AUT & EME and being non-resident would not qualify for the rights - and that is another factor to take account of - investors barred from taking up the rights

 

[barney]

barney,

It's quite possible that some of the selling of ADI & AUT is by investors looking to release cash to take up the rights as well. I don't feel that too much regard should be paid to price wobbles during a period when portfolio adjustment can be expected.

I hold ADI, AUT & EME and being non-resident would not qualify for the rights - and that is another factor to take account of - investors barred from taking up the rights

Hi Estseon, (and may I compliment you on your quality postings on various aspects of the Sugarloaf/Sugarkane play in general

Agree totally ..... I think anyone buying EKA today was making a smart business decision .... This stock today was sitting at a premium to both ADI (which I hold) and AUT ....

The fact that it has the announced cap raise at 10 cents seems to have spooked a few punters into selling when they maybe didnt need to ..

I'm not sure if people understand that today, they could buy into EKA at a heavily discounted price .... and then give themselves the opportunity to pick up 1 for 6 more shares at a ridiculous 10 cents per share ... simply a recipe for making money for nothing .......

anyway, good luck to yourself and the many punters who see the potential in this play in general ...... certainly been an interesting ride so far !!