KEY - Key Petroleum

[Ruprect]

Thought we should start a thread on Key Petroleum, to be listed next Tuesday.

A $19.2 million ipo, shares at 30cents each. Was closed heavily oversubscribed after only 4 days. Was underwritten by Blackwood securities and Commsec.

The "key" to the success of this one lies in its leadership. Its Chairman is Ted Ellyard, former CEO of Hardman Resources who took that company from a value of $5 million to $1.5 billion during his time there.

Including seeking to identify more exploration targets, KEY will on listing: (from the prospectus)

Start earning a 20% interest in the 1300 sq km Nyuni block offshore
Tanzania by funding 30% of the cost of drilling two wells in 2007.

Own a 100% interest in 1 onshore petroleum concession in northern
Italy covering a total area of 318 sq km.

Own a 100% interest in 4 offshore petroleum application blocks in
Italy covering a total area of 2702 sq km.

Own a 1.75% Free Carried interest in 2 onshore petroleum
concessions in Suriname covering a total area of 3326 sq km.

Id be expecting some good institutional interest in this one, given Ellyard's reputation. And given the oversubscription, and very early close, if it was to open at a good premium to the 30cents, i wouldnt be at all surprised.

The Age did a review on this a month ago.

http://www.theage.com.au/news/busin...r-key-petroleum/2007/03/18/1174152881196.html

 

[yogi-in-oz]

Hi folks,

KEY ... may be another one, that will be less-than-spectacular,
until a positive cycle comes into play, around 25 June 2007 ...

Listing on 26042007 now and no doubt "Ted's disciples" will be
all over this one trying to push the price up, from get-go, but
from the cycle analysis, the day after listing is looking
particularly negative for KEY.

Expecting May to be a volatile period for KEY, particularly
around 11-18 May 2007, so KEY may be a good one to
observe, until the next set of positive cycles become evident.

have a great day

paul

 

[Ruprect]

Open 30.5cents. Perhaps they should have put the word "Uranium" at least once in the prospectus...

This one has a way to go yet, fundamentals and company leadership will kick in and id expect some more positive movement.

 

[Ruprect]

AAP report on the KEY listing today.

Oil and gas explorer Key Petroleum Ltd is turning its sights to Tanzania after a steady debut on the Australian share market.

Key chief executive Ken Russell said the main focus of the company will be Tanzania, where it owns the Nyuni block, adjacent to the producing Songo Songo Gas Field, located offshore.

"We're going to commence drilling there in June," Mr Russell said.

After that, he said the next priority would be to grow the business with additional buys.

"Once that's done, then we'll look at projects internationally and locally - anywhere where a project comes up that we think could be beneficial to the growth of the company."

Key debuted on the Australian stock exchange on Thursday at its 30 cents a share offer price following an oversubscribed initial public offer of 64 million shares to raise $19.2 million, which closed early.

The oil and gas explorer offered over 70 per cent of the company to new investors to fund growth, and has scheduled drilling to begin in the middle of 2007.

The shares closed up 0.5 cents at 30.5 cents.

"We're very happy ... it's a major milestone for the company to get to this point," Mr Russell said.

"The listing and the holding of the price shows faith in the investors."

He said both institutional and retail shareholders had joined the company's register.

In the six months before issuing its prospectus, Key entered the Nyuni block and bought the Italian interests of UK operated Puma Petroleum Ltd.

It also entered into a deal with Portsea Oil & Gas NL to buy 50 per cent of the company, becoming part owner of Portsea's Free Carried interest in Suriname, in South America.

 

[sfx]

Hi all,

Just wondering if anyone out there is actually following KEY ?!

I'm interested in hearing about anyone's thoughts over this company's prospects, especially in lieu of the reputation of KEY's Non-Executive Chairman Ted Ellyard....

Cheers and may the market be in your favour - up or down !

 

[surfingman]

I have been following KEY I had a few shares for a period when the Tanzanian drilling was originally suppose to start, I sold out and will look to get back in some time after the options are issued (record date has passed) or if there are some cheap oppies available, preferably when the Tanzanian drilling begins.

Looks to has some great potential as expected from Hardman Resources days...

 

[Ruprect]

Yep, following these, bought in the offer - and have topped up in the 20's. Still think it has a lot of potential, very good management, and had good broker support when listed. I will hold these long term, not interested in selling anywhere near these levels. The options will be a nice little bonus.

(BTW - i started a KEY thread a couple of months back - now we have 2. Mods, any way to combine the two? Cheers)

 

[sfx]

Hmmm missed your previous posts. Glad to see that they are now joined !

Following the downward trends of the share market, KEY has slumped recently, however, today it's bucked the trends of the other oilers I'm following - up a whole cent to 23.5 cents ! Ok nothing to rejoice considering its IPO of 30 cents a share, but a step in the right direction.

My view is that many are hedging their bets on the options, and a rights issue for 1-for-2 @ half a cent each, it sounds too good to be true. Time will tell I guess.

Record date was the 26th July for the rights issue, so the buying trend on the back of that is over.

Lets hope that there's an upward trend from here in - esp in lieu of the Suriname oil finds from their first JV shallow well drilled (see their latest announcement). I guess it's now a matter of how much, commercial viability, quality etc, etc...

Anyone else's view appreciated here....

 

[Ruprect]

Looks to be some steady interest building here for KEY. Support around the 18.5-20 cent range.

After delays in securing the drilling rig in Tanzania, it is due to arrive about now, with drilling to commence in the first half of October.

KEY have a 20% interest in the Nyuni Block, which has an operating gas field right next door, and pipeline infrastructure in place.

Managed to pick up some more options, (KEYO, 35c, exp march 2009) which are trading around the 5-5.5cent mark, with little volume being offered on the sell side.

I will say that with the INP result yesterday (wow!), it will be good to see some interest coming back to Oil and Gas explorers. And with Oil at $80+us a barrel and gas on the way up, im surprised that they havent been getting more attention.

Any other interest here in KEY, or any other thoughts?

 

[surfingman]

Great management and some great prospects, Tanzania very shortly then Po Valley from memory early 2008.

Tanzania will be very exciting to see unfold, these guys know their stuff and have proven it previously with Hardman.

 

[sfx]

No news is good news for KEY ?! <I don't think so> NE1 know of what they're doing ?!

With the recent delays, the options expiring March 2009 are looking more and more to be a fizzer ?!?

Comments, NE1 have a crystal ball !?

 

[Ruprect]

18 Months till the expiry on the options. Thats a very very long time, with a lot planned in between.

The drill rig in Tanzania is due to arrive shortly, there were delays in securing it because it had to be upgraded. Unexpected, and not KEY's fault, its not their rig. Once it kicks off, we should see a lot more announcements to the market on its progress. There isnt a whole lot they can report when they are waiting.

There is a lot to come in the next 12-18 months as well, with the Italian drilling due to kick off either later this year or early next.

With the price of oil and gas set to remain very high, and interest in this sector gaining momentum, KEY will shape up as one of the more promising explorers IMO. Have a look at what happened with INP and ELK over recent weeks to see what can happen to a SP with some decent results. And remember, only about 70 million shares on offer here.

KEY are very cashed up, and have a solid management team. Im expecting good things. I currently hold both the heads, and have a very decent position in the options as well.

 

[sfx]

18 Months till the expiry on the options. Thats a very very long time, with a lot planned in between.

.... And remember, only about 70 million shares on offer here.

KEY are very cashed up, and have a solid management team.

Yeah I guess you are right. I'm in KEY as well, but with a plethera of other oilers out there (ie/eg, CIG/COE/TAP etc etc), its easy to side step KEY and get in with the others.

I guess its a case of spreading the risk across several companies with an acceptable risk profile and sound portfolio of prospects ?!!!!!?

 

[sfx]

ASX and Media Release
Friday 16th November 2007

DRILLING OF KILIWANI #1 IN TANZANIA COMMENCES​

Drilling has started on Key Petroleum’s (ASX code: KEY) Kiliwani prospect in Tanzania with the well spudded on 15th November 2007.

Kiliwani-1 is being drilled from the island of Kiliwani lying approximately 1 km to the south-east of Songo-Songo Island and approximately 4 km from the producing Songo Songo gas field. It will be a directional well with the selected bottom hole location approximately 1,200 metres from the surface location. Drilled depth is planned to be approximately 2,500 metres and the target location is designed to test Lower Cretaceous sandstones which are the producing reservoirs at the Songo Songo gas field. The well will take approximately 40 days to drill to the total depth (TD).

Kiliwani #1, is the first in a 2 well programme. The second well, Kiliwani North #1, will test this same reservoir system but will also be targeting a shallower oil play.

Ken Russell, managing director and CEO of Key Petroleum said, “Our team in Tanzania did a good job to relocate the rig to the Kiliwani #1 well site. The relocation took less time than originally planned. We now look forward to this second phase of the project, the actual drilling of Kiliwani #1.”

During drilling operations the company will issue regular releases every Tuesday or at such times as material matters require an earlier release.

 

[lazyfish]

Glad to see a Key post. Key certainly looks interesting to me. The questions that I have, however, is how much more throughput can the Songa gas plant handle given that Songa field is already producing at over 200 mmscf/d, and the plant can only handle 70 mmscf/d. Also, does Aminex has access to the Songa plant at all? Key presentation says Partner has government gurantee to access gas pipeline. I understand that Orca owns the gas plant and all the producing wells. Won't they be in direct competition with Aminex and Key?

 

[lazyfish]

Answering my own questions here. I have confirmed that there is spare capacity in the existing infrastructure and compression can be used to increase overall throughput. Orca does not own the Songa Songa plant, and Key has access to the infrastructure.

Given that the current capacity of the 6 wells in Songa Songa is over 200 mmscf/d, or an average of over 33 mmscf/d, if Key can hit that average (not being greedy here , things will look rather good. Using a profit of *3* dollars per thousand cubic feet,

33 * 1000 * 3 * 365 * 20% (20% interest) = 7.2 million a year. Current market cap is 20 million, with enough cash to fund the drilling of 2 wells in the area.

Tanzania is looking to increase gas power production as their hydro plants suffer from drought and could not supply power consistently. Aminex also has development (in oil I believe) in Kenya just up north. I hold a small parcel =)

 

[sfx]

Thanks for the post Lazyfish.

I certainly hope that this share has some upside to it soon. I've held on since IPO and its done nothing for me, but go down and down.

Mr Ellyard's reputation is the KEY for me, but I'm only going by market hype over his reputation - wasn't into oilers when he was at Hardman etc.

Fingers crossed that Tanzania delivers !

 

[Ruprect]

Nice to see KEY finally getting some recognition by the market - long deserved IMO. Drilling is well underway, and good announcement out this morning, indicating that Gas is present, and they are on their way to hitting the target zone. To me, it looks as if they are ahead of schedule on the drilling of Kilwani 1, meaning some possible definitive results by mid december.

The well has encountered encouraging gas shows in the shallow section indicating potential gas in the target structure.

Kiliwani 1 has been drilled to the intermediate casing point.
Encouraging gas shows have been recorded in the interval
1163-1241 m; indicating hydrocarbons in the Kiliwani structure.
Forward operations will involve running 13 3/8” casing , leak off
test and drilling ahead. The main target interval is at around
2340 m in Lower Cretaceous sands.

 

[sfx]

Nice to see KEY finally getting some recognition by the market - long deserved IMO. Drilling is well underway, and good announcement out this morning, indicating that Gas is present, and they are on their way to hitting the target zone. To me, it looks as if they are ahead of schedule on the drilling of Kilwani 1, meaning some possible definitive results by mid december.

The well has encountered encouraging gas shows in the shallow section indicating potential gas in the target structure....

Yes indeed with 1,498,095 shares traded through the market today, there's a growing interest on this one.

 

[sfx]

If anyone's interested, KEY is at 2,257m MD for Kiliwani-1. Well TD 2,340m.

KEYO looks to be a reasonable entry for those who are speculative enough....