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Their value was $2.42 in their last valuation May; no reason is given for the drop in valuation. The wording of the report looks similar.
INP - Innamincka Petroleum
- Thread starter Aceyducey
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Their value was $2.42 in their last valuation May; no reason is given for the drop in valuation. The wording of the report looks similar.
I'm not surprised this value is different, recently Commsec have been rather inconsistent in their error checking, i think $2.14 was their previous valuation (before $2.42, that is )
IMO it's a copy error and Commsec hasn't picked it up... but you never know.
Z
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Oil starts flowing at Flax
Innamincka Petroleum, on behalf of the PEL 103 Joint Venture, is pleased to announce oil
production commenced from the Flax field on Friday 1st August.
The first well, Flax 1, flowed oil at the forecast initial rate of approximately 350 barrels of oil
per day. Additional Flax wells will be brought online over the next few weeks as the
surface construction and well development activities proceed.
The first load out of crude oil from the Flax field is scheduled for mid week
Buyers pushed the price up significantly on the close.
News like this is black gold
Innamincka Petroleum, on behalf of the PEL 103 Joint Venture, is pleased to announce oil
production commenced from the Flax field on Friday 1st August.
The first well, Flax 1, flowed oil at the forecast initial rate of approximately 350 barrels of oil
per day. Additional Flax wells will be brought online over the next few weeks as the
surface construction and well development activities proceed.
The first load out of crude oil from the Flax field is scheduled for mid week
Buyers pushed the price up significantly on the close.
News like this is black gold
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Got to be quick Zolow
They have the resources and management to do it. Sit back and enjoy the ride. Good luck to all holders.
Congratulations to INP holders.
It must be nice to see some appreciation in the SP when they strike oil...hell my baby is producing the blackgold at 4,000 bopd and can't even take a trick.
Have been watching INP for a while...if they can increase production significantly then they will be rerated handsomely.
It must be nice to see some appreciation in the SP when they strike oil...hell my baby is producing the blackgold at 4,000 bopd and can't even take a trick.
Have been watching INP for a while...if they can increase production significantly then they will be rerated handsomely.
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I shudder to think what INP's sp would be today without yesterdays announcement...down over 7% on good news
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It was a bad day for energy stocks and INP through no fault of it's own got beaten up along with the rest of the commodities.
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Re: INP - Innamincka Petroleum smashed !
INP has been smashed today
Down almost 40% to 41cents
Is INP another AED ??
Glad i bailed out some time ago
In the report it does not look good
Has the FLAX field now failed ?
INP has been smashed today
Down almost 40% to 41cents
Is INP another AED ??
Glad i bailed out some time ago
In the report it does not look good
Has the FLAX field now failed ?
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Not a good announcement. FLAX hasn't failed - it's just that it is probably not as large as they thought. Still flowing though. In for a punt at .415
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well there was no bounce today
Last time i looked it was down but steady
Any one have any idea what this mob is worth now ?
Is it time to buy ?
Last time i looked it was down but steady
Any one have any idea what this mob is worth now ?
Is it time to buy ?
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The Comsec report on INP in Jan 08 said:
"The share price response to the announcement of 120Mbbls Oil in Place was dramatic. However, INP had, in January 2006, published an audited resource of 85Mbbls and the recent announcement was the infill between these two fields."
The latest announcement seemed to throw doubt on the assumed connection between Flax and Juniper.
Does this mean that the current value = 85/120 x value before latest announcement($0.68) = $0.48? Current value $0.49.
Or should it be Comsec's last valuation $2.14 x 85/120 = $1.52?
"The share price response to the announcement of 120Mbbls Oil in Place was dramatic. However, INP had, in January 2006, published an audited resource of 85Mbbls and the recent announcement was the infill between these two fields."
The latest announcement seemed to throw doubt on the assumed connection between Flax and Juniper.
Does this mean that the current value = 85/120 x value before latest announcement($0.68) = $0.48? Current value $0.49.
Or should it be Comsec's last valuation $2.14 x 85/120 = $1.52?
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The latest announcement seemed to throw doubt on the assumed connection between Flax and Juniper.
Does this mean that the current value = 85/120 x value before latest announcement($0.68) = $0.48? Current value $0.49.
Or should it be Comsec's last valuation $2.14 x 85/120 = $1.52?
[/QUOTE]
Commsec has released a new synopsis of the INP situation which might interest some readers. I have pasted the narrative below. I was unable to attach graphs and tables but its all very interesting. Wonder if we can sell the fresh water! lol
Confusing Flax 5 results
What happened?
At 8:46am on Friday 15 August, INP announced
Flax 5 has been producing 1,000bbls of fluid a day of clean up flow,
after fracture stimulation, which is a much higher flow rate than
expected.
”” 300bbls of the 1,000bbls a day is oil.
”” The water is fresher than expected
A pressure gauge on Flax East 1 has not responded to the production
in Flax 5, suggesting that the two wells are not in communication.
Following the announcement, INP’s share price was trashed, falling 35%
What does it mean?
The INP Board is concerned that the market had previously been advised
that INP thought it was likely that the Flax East 1 well proved connection
between the Flax and Juniper fields. This may not be the case.
Even if the Juniper field (Flax East is in the Juniper field) and the Flax
fields are not in communication, this is not important for reserves
estimation.
The amount of water in Flax 5 is confusing. No other well has produced
water and this may mean that the proportion of the reservoir accounted for
by oil could be lower than expected, based on the experience of the
Cooper Basin).
It will take at least a month for INP to test possible reasons and reach
some conclusion and it could mean that INP will take longer to publish
certified reserves. It might now be as late as mid 2009.
Valuation and recommendation
There are both downside and upside risks to CommSec’s $2.17 per share
valuation, which compares with the current share price of $0.47.
In CommSec’s view, INP’s share price reaction is overdone. CommSec
retains its BUY / OUTPERFORM recommendation on INP.
Equities Research Report | Innamincka Petroleum
18 August 2008, 7:41AM AEST 2
CommSec’s first pass interpretation
While the implications of INP’s announcement are unclear, the market reacted, trashing the
INP share price
CommSec understands that INP’s Board made the announcement for two reasons.
The lack of pressure response from Flax East 1 to the production of 5,000bbls fluid from Flax 5, which is about 600m away, though on the east side of a fault structure interpreted from previous a seismic survey, indicated that the Flax 5 and Flax East 1 wells were not in communication, and hence the Flax and Juniper fields, may not be in communication
”” this is in contrast to statements made by INP previously.
News of the water being recovered from Flax 5.
Implications
The implications are unclear. Communication between the two fields has NO impact on estimated reserves; it impacts on the development plan.
CommSec believes that it could take four to six weeks for INP to understand why so much water is being recovered from Flax 5.
There is potential for reserves to be negatively impacted, but there are other factors that could increase the estimate of recoverable reserves for the total of the Flax – Juniper complex.
While there is potential negative for INP from a reserves downgrade, INP’s announcement also contained positives.
The Flax 5 well has a flow of 1,000 bbls of fluid a day, compared with about 300bbls/day from other wells, on a clean-up flow
Flax 1 is still producing 300bbls/day, through a 16/64 inch choke
Development progress
Development is progressing well.
Flax 3 and Flax 4 are ready to produce just waiting for welding of pipes to be completed
Flax 2 is being prepared for production.
INP is on track for 1,000bbls of oil a day in September or October.
INP’s announcement
INP announced that “…development activities over the last week have raised questions about
the previously assessed nature and extent of the connection between the Flax and Juniper
fields…”
The key points are:
-Water is being recovered from Flax 5, while water has not been encountered in any well anywhere else in the field, and
-despite the recovery of 5,000bbls of fluid from Flax 5, a pressure gauge on the nearby Flax East 1 well has not responded.
CommSec’s Interpretation
Previously INP had advised that the first results of the Flax East 1 well indicated that the Flax and Juniper fields were in connection. INP have now clarified that this may not actually be the case. However, communication between the two fields has NO impact on estimated reserves;
it impacts on the development plan.
Implications of the water
Flax 5 was fracture stimulated (fracc’d) and flowed 1,000bbls of fluid a day until it was shut for a pressure test (standard procedure). The recorded flow was clean-up from the fracccing.
Fraccing involves injection of up to 2,000bbls of fraccing fluid and 5,000bbls of fluid has been recovered, of which about 1,500bbls is oil and the rest fraccing fluid and formation water.
Key points to note include:
-the flow rate of 1,000bbls a day is much higher than any other well,
-the recovery of 300bbls of oil is a good result,
-the flow was on clean-up, and may not be indicative of the well’s production.
The flow is from two producing sands, the basal Patchawarra and the Tirrawarra.
The water that has been recovered has been fresher than water recovered from other Cooper Basin fields. The reason for this is not understood.
An isolated reservoir?
It is possible that this is just an isolated reservoir;
Oil is lighter than water, so water will be found at a greater depth than oil, which is why the water produced from Flax 5 is so unexpected as the log analysis indicated there was no water in the deeper Flax East 1 well.
Time to test
The first test is to understand whether the water is being produced from one sand, or both, and if one, which sand is producing the oil.
To do this requires Flax 5 to be completed so that the operator is able to shut off the sands individually. This requires the work-over rig that is currently working at Flax 2 where it is to remove a packing seal to allow fluids to flow from both sands.
This may take only one or two days, or it might take longer. The work-over of Flax 5 should be completed within two weeks.
Each of the sands will then need to be tested for about a week, so it will be about a month before INP is able to advise the reasons for the water in Flax 5
Potential Reserves implications
The volume of Oil in Place (OIP) for the Flax-Juniper fields has been estimated as 120Mbbls.
A key assumption in this estimate is that the reservoirs are about 40% water and 60% sand.
This estimate was made using:
-the results of electrical resistivity tests, and
-assumed water salinity which determines the resistance of water.
If the formation water is as fresh as found in Flax 5, then the proportion of water in the
reservoirs could be 55% or even higher.
The reserves estimated for the Flax field is over 4Mbbls of recoverable oil Of this:
-about 1.0Mbbls is from the basal Patchawarra sands, and
-the balance from the Tirrawarra.
estimates
However…
-There is only a trivial implication for the potential for over 35Mbbls of total potential
recoverable oil reserves from the Flax – Juniper.
-The estimates of recoverable reserves are based on assumed recoveries of 25% of OIP
in the Tirrawarra and much less in the basal Patchawarra, while the experience of STO’s
Tirrawarra field is that the Enhanced Oil Recovery will achieve a much higher recovery
level.
Conclusions
Since the excitement that followed the announcement of the Flax East discovery well (in
October 2007) the INP share price has performed poorly, this is despite the strength of the oil
price.
However,the INP share price (at least until the last day) has performed at least as well as other small oil companies.
There are many assumptions made in CommSec’s $2.17 valuation of INP.
The most critical details include:
-a total of 36Mbbl is produced over a 15 year period, from 2008 to 2022;
”” this is an estimated 30% recovery of the 120Mbbls OIP,
-$18m in costs to develop a cluster of wells and this takes 6 months.
CommSec also believes that there is further upside in INP from:
-greater Oil in Place as neither the oil-water contact (the bottom of the oil column) nor the
gas cap (the top of the oil column) have been found,
-higher recovery, as Enhanced Oil Recovery (gas injection) has given recovery in STO’s
Tirrawarra field of greater than 30%, while similar fields in the USA have been up to
50%,
-gas sales potential from the gas discoveries at Yanpurra and Yarrow.
CommSec affirms its $2.17 valuation of INP and its BUY / OUT PERFORM recommendation
on INP.
Equities Research Report | Innamincka Petroleum
18 August 2008, 7:41AM AEST 9
Still good times ahead i feel with such a recommendation...
Does this mean that the current value = 85/120 x value before latest announcement($0.68) = $0.48? Current value $0.49.
Or should it be Comsec's last valuation $2.14 x 85/120 = $1.52?
[/QUOTE]Commsec has released a new synopsis of the INP situation which might interest some readers. I have pasted the narrative below. I was unable to attach graphs and tables but its all very interesting. Wonder if we can sell the fresh water! lol
Confusing Flax 5 results
What happened?
At 8:46am on Friday 15 August, INP announced
Flax 5 has been producing 1,000bbls of fluid a day of clean up flow,
after fracture stimulation, which is a much higher flow rate than
expected.
”” 300bbls of the 1,000bbls a day is oil.
”” The water is fresher than expected
A pressure gauge on Flax East 1 has not responded to the production
in Flax 5, suggesting that the two wells are not in communication.
Following the announcement, INP’s share price was trashed, falling 35%
What does it mean?
The INP Board is concerned that the market had previously been advised
that INP thought it was likely that the Flax East 1 well proved connection
between the Flax and Juniper fields. This may not be the case.
Even if the Juniper field (Flax East is in the Juniper field) and the Flax
fields are not in communication, this is not important for reserves
estimation.
The amount of water in Flax 5 is confusing. No other well has produced
water and this may mean that the proportion of the reservoir accounted for
by oil could be lower than expected, based on the experience of the
Cooper Basin).
It will take at least a month for INP to test possible reasons and reach
some conclusion and it could mean that INP will take longer to publish
certified reserves. It might now be as late as mid 2009.
Valuation and recommendation
There are both downside and upside risks to CommSec’s $2.17 per share
valuation, which compares with the current share price of $0.47.
In CommSec’s view, INP’s share price reaction is overdone. CommSec
retains its BUY / OUTPERFORM recommendation on INP.
Equities Research Report | Innamincka Petroleum
18 August 2008, 7:41AM AEST 2
CommSec’s first pass interpretation
While the implications of INP’s announcement are unclear, the market reacted, trashing the
INP share price
CommSec understands that INP’s Board made the announcement for two reasons.
The lack of pressure response from Flax East 1 to the production of 5,000bbls fluid from Flax 5, which is about 600m away, though on the east side of a fault structure interpreted from previous a seismic survey, indicated that the Flax 5 and Flax East 1 wells were not in communication, and hence the Flax and Juniper fields, may not be in communication
”” this is in contrast to statements made by INP previously.
News of the water being recovered from Flax 5.
Implications
The implications are unclear. Communication between the two fields has NO impact on estimated reserves; it impacts on the development plan.
CommSec believes that it could take four to six weeks for INP to understand why so much water is being recovered from Flax 5.
There is potential for reserves to be negatively impacted, but there are other factors that could increase the estimate of recoverable reserves for the total of the Flax – Juniper complex.
While there is potential negative for INP from a reserves downgrade, INP’s announcement also contained positives.
The Flax 5 well has a flow of 1,000 bbls of fluid a day, compared with about 300bbls/day from other wells, on a clean-up flow
Flax 1 is still producing 300bbls/day, through a 16/64 inch choke
Development progress
Development is progressing well.
Flax 3 and Flax 4 are ready to produce just waiting for welding of pipes to be completed
Flax 2 is being prepared for production.
INP is on track for 1,000bbls of oil a day in September or October.
INP’s announcement
INP announced that “…development activities over the last week have raised questions about
the previously assessed nature and extent of the connection between the Flax and Juniper
fields…”
The key points are:
-Water is being recovered from Flax 5, while water has not been encountered in any well anywhere else in the field, and
-despite the recovery of 5,000bbls of fluid from Flax 5, a pressure gauge on the nearby Flax East 1 well has not responded.
CommSec’s Interpretation
Previously INP had advised that the first results of the Flax East 1 well indicated that the Flax and Juniper fields were in connection. INP have now clarified that this may not actually be the case. However, communication between the two fields has NO impact on estimated reserves;
it impacts on the development plan.
Implications of the water
Flax 5 was fracture stimulated (fracc’d) and flowed 1,000bbls of fluid a day until it was shut for a pressure test (standard procedure). The recorded flow was clean-up from the fracccing.
Fraccing involves injection of up to 2,000bbls of fraccing fluid and 5,000bbls of fluid has been recovered, of which about 1,500bbls is oil and the rest fraccing fluid and formation water.
Key points to note include:
-the flow rate of 1,000bbls a day is much higher than any other well,
-the recovery of 300bbls of oil is a good result,
-the flow was on clean-up, and may not be indicative of the well’s production.
The flow is from two producing sands, the basal Patchawarra and the Tirrawarra.
The water that has been recovered has been fresher than water recovered from other Cooper Basin fields. The reason for this is not understood.
An isolated reservoir?
It is possible that this is just an isolated reservoir;
Oil is lighter than water, so water will be found at a greater depth than oil, which is why the water produced from Flax 5 is so unexpected as the log analysis indicated there was no water in the deeper Flax East 1 well.
Time to test
The first test is to understand whether the water is being produced from one sand, or both, and if one, which sand is producing the oil.
To do this requires Flax 5 to be completed so that the operator is able to shut off the sands individually. This requires the work-over rig that is currently working at Flax 2 where it is to remove a packing seal to allow fluids to flow from both sands.
This may take only one or two days, or it might take longer. The work-over of Flax 5 should be completed within two weeks.
Each of the sands will then need to be tested for about a week, so it will be about a month before INP is able to advise the reasons for the water in Flax 5
Potential Reserves implications
The volume of Oil in Place (OIP) for the Flax-Juniper fields has been estimated as 120Mbbls.
A key assumption in this estimate is that the reservoirs are about 40% water and 60% sand.
This estimate was made using:
-the results of electrical resistivity tests, and
-assumed water salinity which determines the resistance of water.
If the formation water is as fresh as found in Flax 5, then the proportion of water in the
reservoirs could be 55% or even higher.
The reserves estimated for the Flax field is over 4Mbbls of recoverable oil Of this:
-about 1.0Mbbls is from the basal Patchawarra sands, and
-the balance from the Tirrawarra.
estimates
However…
-There is only a trivial implication for the potential for over 35Mbbls of total potential
recoverable oil reserves from the Flax – Juniper.
-The estimates of recoverable reserves are based on assumed recoveries of 25% of OIP
in the Tirrawarra and much less in the basal Patchawarra, while the experience of STO’s
Tirrawarra field is that the Enhanced Oil Recovery will achieve a much higher recovery
level.
Conclusions
Since the excitement that followed the announcement of the Flax East discovery well (in
October 2007) the INP share price has performed poorly, this is despite the strength of the oil
price.
However,the INP share price (at least until the last day) has performed at least as well as other small oil companies.
There are many assumptions made in CommSec’s $2.17 valuation of INP.
The most critical details include:
-a total of 36Mbbl is produced over a 15 year period, from 2008 to 2022;
”” this is an estimated 30% recovery of the 120Mbbls OIP,
-$18m in costs to develop a cluster of wells and this takes 6 months.
CommSec also believes that there is further upside in INP from:
-greater Oil in Place as neither the oil-water contact (the bottom of the oil column) nor the
gas cap (the top of the oil column) have been found,
-higher recovery, as Enhanced Oil Recovery (gas injection) has given recovery in STO’s
Tirrawarra field of greater than 30%, while similar fields in the USA have been up to
50%,
-gas sales potential from the gas discoveries at Yanpurra and Yarrow.
CommSec affirms its $2.17 valuation of INP and its BUY / OUT PERFORM recommendation
on INP.
Equities Research Report | Innamincka Petroleum
18 August 2008, 7:41AM AEST 9
Still good times ahead i feel with such a recommendation...
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Whitsy
Thanks for this reply. For those in for the long term the information seems to indicate the value is still there, especially at the current price.
Thanks for this reply. For those in for the long term the information seems to indicate the value is still there, especially at the current price.
doogie_goes_off
disbelieve if you can
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Has broken out, so the nay sayers have decided that flax is either big enough or connected to Juniper but holds so much oil that they cant register it in the nearest well LMFHO. I'd say it will break back down unless there's some insode news.