HOG - Hawkley Oil and Gas

condog · 10 March 2011

The markets being an irrational beast at present. Where common sense jumps out the window and stupidity takes over.

I will be watching for buying opps. CGT prevents me selling unless you can forsee a bigger buy sell spread then your CGT %.

traderclaude · 10 March 2011

HOG is derisked from what is going on with the Arabic world.

Really shouldn't be much impact what happens there as I see it. Just people spooked by oil.

Judging by the close trend I think we will see a surge back up to 46 to 48 cents morrow.

One of those times when you can load up early morning.

tothemax6 · 10 March 2011

condog said:
The markets being an irrational beast at present. Where common sense jumps out the window and stupidity takes over.

Yeah why is "risk of oil interruption in north-africa/mid-ease" translated to mean "sell oil producer stocks outside of north africa/mid-east" .

basilio · 10 March 2011

At certain stages markets can become quite irrational. If investors fear there is a big correction or even crash coming they bail out without questions. Later on the astute investors (who still have some cash left) can make a real killing.

Theoretically HOG is extremely sound and seems to only have upside. But I still wouldn't expect it to hold up if the market drops another 70 points tomorrow.

ob1kinobi · 11 March 2011

The other point re Markets is the absense of buyers.

Simple demand and supply.

What happens when no one wants to buy what you are selling?

Well you have to price it lower to entice someone.

At present there are too few people looking to 'take-on' risk.

An abundance of sellers to buyers.

condog · 11 March 2011

BrightGreenGlow said:
The general market seems to be disagreeing with you condog. However, for every stupid seller there is another buyer.... hope you are correct with this one though. I only have small package in HOG but am now starting to track it since it has started falling in the last few weeks. I have alot of trust in your research though and love reading your opinions.

Let's hope we gain from here towards the end of the month.

Dont rely on what i say, use it as a basis for your own research or to consult with your broker, but dont rely on it. Im not qualified and ive been wrong before and will be again.

Dukey · 11 March 2011

Gonna take this opportunity to get in on this one... apart from the long drilling times all looks great. not sure yet if i will be short term or long term yet - as I'm thinking it may rise to a level then go sideways for a while waiting for those next wells....
but we'll see how she goes...

Thx to all here for bringing this one to my attention.

-D

traderclaude · 11 March 2011

Well i got it wrong about getting to 46 cents today, but a 5 cent drop is not to bad.

The massive earthquake worries the entire market a bit for me, though I'm pretty sure HOG will not be affected itself just by the market.

At the end of the day iron ore will be in demand with rebuilding parts of the world in the months ahead.

With the news in the next few weeks I would expect HOG to get up to 50 cents anyway, unless that bigger choke does not come off.

Sad seeing such potential with lack of interest, but great opportunity to make profit at current price.

poverty · 11 March 2011

traderclaude said:
At the end of the day iron ore will be in demand with rebuilding parts of the world in the months ahead.

Do you think when the 9mm choke gets installed HOG will produce a lot more iron ore?

traderclaude · 11 March 2011

LOL! Was that a serious question or you taking the piss.

No i just threw a general thought out there, HOG has nothing to do with iron ore if I mislead anyone, oops!!!

For me it about the gas for HOG, the oil comes with it, but gas is the best thing about the stock.

poverty · 11 March 2011

Surely with a bigger choke installed that iron ore will just fall out!

Dukey · 11 March 2011

poverty said:
Do you think when the 9mm choke gets installed HOG will produce a lot more iron ore?

...now that would be quite tricky !

IMO - all stocks are affected by general market sentiment to some extent... but i would think HOG should be reasonably well insulated, apart from local (to their operations) interruptions and general oil price shocks.

... they do only have 1 well though for the moment.

tothemax6 · 11 March 2011

poverty said:
Do you think when the 9mm choke gets installed HOG will produce a lot more iron ore?

:jump:

condog · 13 March 2011

Juust to set the record straight - HOG is extracting gas and gas condensate from the ground, NOT Iron Ore. Not sure whos kidding and who is serious here, but its is wierd.

trader8888 · 13 March 2011

poverty said:
Do you think when the 9mm choke gets installed HOG will produce a lot more iron ore?

LOL

ParleVouFrancois · 13 March 2011

If they are producing iron ore instead of oil they really should change their name.

bennywizard · 14 March 2011

ParleVouFrancois said:
If they are producing iron ore instead of oil they really should change their name.

No its not Iron...its more like Gold ... Liquid Gold that is

By the way if you have not yet listened to this its worth your time
http://www.brr.com.au/event/77311/c...underway-first-revenue-received-from-201-well

condog · 14 March 2011

From a fellow forum poster - response from company to his email.

Asking some guidance on cashflow he was provided this response below.

We are currently running the well on a 6mm choke during the initial ramp-up period. Once that rises to the expected 9mm choke. That figure, before tax, is $4 million. We're currently low on cash in the bank, although we are now receiving revenue from Well #201 and have been paid for February and March gas. We definitely expect this gas will fund our drilling activities this year. There is absolutely no need for a capital raising.

$4M before tax is a massive cash flow for a company this small. That figure is supposed to be approx $2m net per month which is still phenominal for a company this young. OPEX are around 30-33% of revenue and then theres company admin costs taxes etc.

$2M Net Earnings pm = $24M p.a.

24M at Sector average PE of 23.7 is $568Million mcap. Current mcap 211M*44c=93M
$568M / 211M shares = $2.69

Applying a lower PE to allow for risk of very junior producer at say 16 = $384M
$384M / 211M shares = $1.82

At PE 10 which is low for a company like this = $240M
$240M / 211M shares = $1.13

Note : DYOR and seek advice, these are not without risks.

2nd well mid year, third well end of year to early 2012.
If they get a 2nd well even half as good as well #201 they will be sitting pretty.

Pretty easy to see where Hartleys come up with thier $1.14 valuation
http://www.hawkleyoilandgas.com//me...s-research-note-117/Hartleys-reseach-note.pdf

condog · 14 March 2011

Thank you to those selling, nice topping up at these prices imo.

tradefill · 14 March 2011

condog said:
Thank you to those selling, nice topping up at these prices imo.

yeh they do provide a good opportunity. I don't understand why anyone would be selling. I would be topping up to if I had the funds, for now ill just have to sit on what i've got

HOG - Hawkley Oil and Gas

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