GDN - Golden State Resources

[chance fate]

... one thing is now for sure ... and that is the upside potential in the sp represented by the leedville has vanished.... which leaves the secondaries... forward low mid and high value scenarios might be (rough!) - anyone got alternatives???:

Low: 50 bcf Pinkerton
Mid: 50 bcf Pinkerton, 50bcf Barker + Alkali
High: Mid + 50bcf in remaining zones

Taking 50bcf to be worth approx. 50cents (rough!)

Low SP target = 60c
Mid SP target = 110c
High SP target = 160c

In my mind the risk is lower (i.e. not much risk of lower sp movement) .... the secondary shows have been good... so to me still worth holding pending results for another few days....

 

[rosesny_1]

Re: GDN Announcement

GDN doesn't say the intervals to be tested are being frac'ed now, so I assume testing is being done without first frac'ing. I like the fact that GDN is testing quickly to try to get gas to the pipeline ASAP but I wish they had said something about frac'ing. Perhaps they'll comment on this in the announcement about the tests. As the current Pinkerton Trail shows appear to be above the gas/water contact, the Leadville Limestone in the 2nd well 1000 feet updip and at/above the Pinkerton level of the current well, should also be above the gas/water contact and so hopefully will be gas charged and productive there, as might the McCracken Sandstone.

 

[bigdog]

GDN seem to have a special relationship with CK Locke and Partners of Perth!

IMO it was very convienent for the SP to drop today to 57.5 cents (the basis of placement price -- "The placement price was calculated at today’s closing price less a 7.5% discount")!!!

Date ----- Open High Low Close Volume
07-May-07 0.705 0.705 0.575 0.575 10,669,772
04-May-07 0.740 0.770 0.670 0.685 9,562,963
03-May-07 0.790 0.790 0.790 0.790 0
02-May-07 0.790 0.790 0.790 0.790 0
01-May-07 0.790 0.790 0.790 0.790 0
30-Apr-07 0.790 0.790 0.790 0.790 0
27-Apr-07 0.790 0.790 0.790 0.790 0
26-Apr-07 0.875 0.900 0.760 0.790 6,658,687


ASX ANN after close may 7
GDN 6:13 PM Placement & Option Exercise
http://www.asx.com.au/asxpdf/20070507/pdf/312bmc45pdflb6.pdf

ANNOUNCEMENT
• Golden State $4 million share placement.
• Exercise of listed options

Share Placement Raises Funds for Working Capital

Golden State Resources is pleased to announce that $4 million has been raised by the placement of 7,476,635 shares at a price of 53.5 cents per share to Cranport Hedge Fund and to CK Locke and Partners of Perth.

The placement price was calculated at today’s closing price less a 7.5% discount.

The proceeds of the share placement will be applied to working capital for the
Company.

Exercise of listed options
The attached 3B includes the issue of 307,500 new ordinary shares as a result of the exercise of listed options (GDNO) expiring on 30 June 2007.

 

[chance fate]

... I should have included the no reserves scenario in the list in my previous post!... good comment on the fraccing, rosesny_1... it's possible that the current test results will reveal poor flow and indicate the need for fraccing and so a delay of several weeks for design and bringing the kit to the site... sp would get battered... and it also looks like the zones with the highest chance of not needing fraccing have been selected on the list for this set of tests... so plenty of scenarios for when and where the price will head...

 

[rosesny_1]

I doubt if there will be any delay for frac'ing. I think GDN knows enough of the zones that they are testing will naturally flow gas at commercial levels. That's what their announcements have been implying right along. If they do frac before hook-up I think it will be done during plant/gathering line construction. Right now they need to know enough about gas flow so as to size the plant and gathering line. The bottom line is that this company needs cash flow quickly.

 

[DAZT49]

C.K. Lockes handled the IPO for GDN in 2005.
If they are using the rig to finish Para 1 How long should it take before the 2nd well is commenced?

 

[chance fate]

... the thing that concerns me with the water in the leedville is how close to the spill point they've drilled in the upper zones... it's possible that they could produce but get watered out pretty quickly... if they are close they'd have to drill the next well updip asap... but at least they will know the size of the reserves... but if it plays out like that there may be a cash flow problem...

... and if they are close to the spill point, and running my ruler over golden's area map, the reservoir would only be about 4 square km's in the Barker Creek down to Pinkerton (ignoring Ismay) - which means reserves using total net reservoir of say 30m in upside case would be approx 70-80Bcf.... let's hope the area is bigger....

 

[chance fate]

... I should add that if the area is anything like that shown on the golden chart .. the same calc produces reserves in the order of several 100Bcf's... my calc is a simple enclosed volume with 5% porosity at hydrostatic pressure converted to atmospheric pressure... so reasonably comfy with it as being a rough guide...

 

[bigdog]

The agreement to $4 million placement based on a 7.5% discount to the last closing price for the day ahead was not smart on GDN's part; nor transparent!
-- I am very disappointed to this action by GDN!

If the placement was offered to me, then I would you sell down and do everything in my power to keep the stock price low?

Why was the average closing price of prior days/week not used?

What is a reasonable basis for determining the placement SP?

 

[elcruzy]

Totally agree big dog, it should not be calculated on the last days trade but on an average weekly. Also thanks to the others for drafting up a rough idea on the gas-price idea.

I know of a few deals where the directors or fundies (in this case CKlocke) either buy or sell prior to manipulate the SP, I dont know if this is legal or not but it DOES happen.
Maybe this stock is worth more than it is currently quoted? Can we check on who the major sellers were and see if they were trying to push down the SP?

What i am happy about is the positive side of it that it 'should' provide a floor price to the SP and that extra funding gives more life to this company.

What a roller coater this stock is!!!

 

[Wysiwyg]

The most likely response to minor gas shows in leadville was the s.p. decline.Announcing the U spin off at the same time accelerated the decline.An entry at 53.5 c or less is what I would like too rather than the 70 c re-entry I paid.

 

[bigdog]

ASN ANN today
GDN 4:30 PM Change of Director's Interest Notice
http://www.asx.com.au/asxpdf/20070508/pdf/312c5j13kbqbbd.pdf

"We attach an Appendix 3Y relating to a change in director’s interests for Mr Richard Sciano. The change reflects the purchase of 200,000 ordinary shares in the company on market for 75 cents per share."

Total paid $150,000 by Richard Sciano for 200,000 shares
--- drop in the ocean compared to what Richard held June 30 2006

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 page 34
http://www.goldenstate.com.au/myuploadfiles/Annualreport2006.pdf

Note 6: Key Management Personnel (continued)
Shares balance @ 30/06/2006 per annual accounts issued
4 Australia Pty Ltd (R Sciano) 3,000,000
Auctor Group Pty Ltd (R Sciano) 1,190,500
R Sciano 16,300

 

[chance fate]

.. timing is really odd... why at 75c just before the financing and the DST result... why not 75c a few weeks ago... and if he knew the dst result - which he must have done because it seems there was no flow at the well - why not buy today/monday?? and if he knew the dst result, even if he had a large holding before, why throw good money away?

 

[jtb]

.. timing is really odd... why at 75c just before the financing and the DST result... why not 75c a few weeks ago... and if he knew the dst result - which he must have done because it seems there was no flow at the well - why not buy today/monday?? and if he knew the dst result, even if he had a large holding before, why throw good money away?

From memory didn't he take profit on the first spike?
After the rollercoaster of paradox 1 draws to a close maybe he's dribbling a bit of that coin back in for the development?
As I've mentioned prior I think the existing results points to an extremely interesting reservoir, irrespective of leadville and lower.
Contemplating re-entry myself atm
Paradox 2 will kick a$$ I think with the focus on the fatter shallow structures.

Me thinks one could draw all sorts of conclusions from the recent price action also

 

[bigdog]

Just adding up the numbers I must conclude that "Consolidation: means sales and our directors sold 13,794,335 shares in the financial year ended June 30 2006per the annual accounts below.

Why was "consolidation" used and not sold?

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 page 34
http://www.goldenstate.com.au/myuplo...report2006.pdf

(d) Details of transactions of Key Management Personnel concerning shares
-----------------------------Balance -----Purchased -----Options ----------------Balance
Shares ----------------------30/06/2005 -(Sold) ------- Exercised Consolidation -- 30/06/2006

4 Australia Pty Ltd (R Sciano) 9,000,000 ------------------------- - (6,000,000)-- 3,000,000

Auctor Group Pty Ltd (R Sciano) ---------- 611,500 ------2,960,000 (2,381,000)-- 1,190,500

R Sciano --------------------------------- 16,300 -------------------------------- 16,300

J Hasleby----------------- 3,500,000 ---- 240,000 -------- 740,000 (2,946,665)-- 1,533,335

J Hopkins-------------------------------------------- - - 2,960,000 (1,973,335)--- 986,665

P Ruttledge - - - - -

P Strachan ------------------------------------------- - 740,000 -----(493,335)-- 246,665

Total -------------------12,500,000 ----- 867,800 ---- 7,400,000 --(13,794,335) 6,973,465

Mr Richard Sciano.has now purchased of 200,000 ordinary shares in the company on market for 75 cents per share.
--- wow!!!

 

[jtb]

See pg 3 ann' dated 31 Oct 2006 (see share price).
I would have tipped more in myself

 

[tino]

Finally, so positive SP movement! Not quite sure what brought it on. Don't think the directors buy in would be enough to turn the tide, but I am not complaining.

 

[chance fate]

...reckon the buy-in was absolutely what turned the tide... and i'm not complaining either - just wish google earth was live and could zoom in on Utah for flare activity... can they flare in Utah?

 

[DAZT49]

I have tried to find Paradox 1 on Google earth, does anyone have the coordinates?
Another 8 days like yesterday and I stop bleeding.

 

[sagitar]

Try these coordinates - it should land you right on the drilling hole!

38 °47'58.35"N
109 °22'39.69"W