KEY - Key Petroleum

[surfingman]

Kiliwani #1 Plugged and Abandoned as per todays announcement.

I did some research at came to the conclusion KEY is undervalued at current prices significantly.

As per most recent quarterly 30th Jan 08

Shares Outstanding: 86 Mil
Cash on Hand: 12.432 Mil
Cash backing per share: 0.1445

Current Share Price: 0.09

Undervalued by about 37% on cash alone!!!

Does anyone know how payment is made for drilling before of after event?
I am guessing that what the exploration and evaluation 2.064 mil is for in latest quarterly to pay for Kiliwani #1.

Estimated expeniture next quarter 3.5 mil even after this cash per share would still be:
.103 per share


Kiliwani North #1 could add 0.20 to SP
This is an oil play with possible gas to begin drilling once rig is dismantled and moved.

A quick figure on Oil alone.... (not including development costs any help would be great)

Oil Target x recovery rate of 35% (used in key presentations) x oil price x 20% Interest

10 000 000 x .35 x $80 x .2= $56 000 000

56 000 000 / 86 000 000 = $0.65


This is speculative and my opinion only double check the figures before buying

 

[surfingman]

Must disclose: I did just buy a small parcel, I couldn't help myself.


Any opinions would be great....

 

[Wysiwyg]

Must disclose: I did just buy a small parcel, I couldn't help myself.


Any opinions would be great....

2 1/2 C is much better than than the 7 C ave. I paid.The next drill closer to the Songo Songo structure increases the possibility of something i suppose.I hate (lol) these junior oil specs.

 

[surfingman]

2 1/2 C is much better than than the 7 C ave. I paid.The next drill closer to the Songo Songo structure increases the possibility of something i suppose.I hate (lol) these junior oil specs.

I brought the shares 0.087 still considering the oppies, I will probably hold to at least the Po Valley drill which should be before June 08, looks to be a good prospect with a 8000 BOPD field only 8km away and 100% interest at this stage .

 

[Ruprect]

KEY in trading Halt pending announcement on second Kilwani well.

This is their fisrt ever trading halt, so maybe a very good discovery.

Today's news from the UK is the following.

Oil firms in East African deals

Three London-quoted oil and gas companies will announce deals in East Africa today. Dominion Petroleum and Soco International will announce a joint venture with the Democratic Republic of Congo's state oil company. Aminex will say that it has found substantial gas reserves in Tanzania.

Aminex of course being the joint partner.

 

[Ruprect]

Just announced a gas discovery - which will be able to go into production once the drilling is finished. Further announcement on reserves once analysis done.

Good news story on an otherwise dull day.

update - up nearly 95% so far.

 

[savoy]

I'm happy to see such good news!

I'm new to the oil and gas game, with Key being my first such purchase. How does this proceed from here? Do they drill more wells to test the reserve before beginning production, or do they start laying the gas line and begin production when that phase is complete?

 

[savoy]

Today's announcement answered my previous question.

It seems the well will be up for production when the hook ups are complete.

 

[Mr Peaman]

did anyone see the close? Going to be a very interesting day for this stock tomorrow - Especially if it is a green DOW

 

[Dezza]

Any guesses of the potential target price for tomorrow or the near future?

savoy - nice pick up for your first.

 

[Ruprect]

I note that the joint partner on the UK exchange, Aminex (40%), has hit a 52 week high on this news, so that bodes well for KEY.

It was a very strong close, always a good thing to see a close on the high price of the day.

And the DOW is up significantly so far, with an expected rate cut afternoon their time.

Im actually very impressed with KEY, significant success with only their second drill target, well funded for the rest of the year - i think $14 million odd in the bank, with some promising prospects in Italy. Plus they are looking at other prospects. I wouldnt be surprised if they also started looking around australia for oil/gas plays. The Fed Govt are likely to assist with exploration for oil/gas to help sure up local supplies. Id like to see KEY getting in on that.

Always hard to pick potential short term - long term i can only say take a look at Ted Ellyard's previous venture, Hardman. Took it from a market cap of $5mil to $1.5 Billion. The guy knows his stuff.

 

[Ruprect]

Looks to be some good movement this morning - after dropping to 18c, its come back very very quickly to 21c. Its racing on volume. Interesting.

Should be expecting a resource size and some flow rates shortly.

 

[Trojax]

I'm very happy with this stock, the 4 week layover for final analysis has shaken out some day traders but the results are excellent supported by the ann on 31.3, looks very nice for commercial soon.

 

[zengin]

Hi Trojax
I dont understand, the news was not bad at all but the stock fell 17% do you have any idea ? I would have imagined the stock to go up at least.

 

[Ruprect]

Yes, it was a good announcement. Shows that there is a very good chance that the well will be a comemrcial gas venture. Thats not bad at all for a company only 9 months old.

I think the issue is that day/short term traders were banking on an announcement that showed flow rates/resource size, and therefore a spike in the price.

That analysis wont be wont for a few more weeks, so the traders pulled out for the time being.

So for now you should see some more serious long term buyers, and the traders will come back later.

I note that the joint partner Aminex was pretty steady overnight in London.

 

[Trojax]

Hi Trojax
I dont understand, the news was not bad at all but the stock fell 17% do you have any idea ? I would have imagined the stock to go up at least.

As Ruprect said, day traders exiting the scene on the news that there's a 4 week wait for before they're getting the necessary equipment in place to confirm overall long term viablity. It's still speccy, but a speccy whose found something significant, for the moment we'll have to wait and see.

I might pick some more up in the drift between now and next round of results, still a speccy risk at the moment but if the independent analysis confirms that this well is commercially viable as the company releases indicate then it'll go gangbusters, especially with that processing plant so close, bit of a bonus that!

 

[Trojax]

Picked up some more today, so quiet on KEY now, hopefully we will receive some of the lab result updates from the sampling soon, looking forward to getting the commercial testing flow rig up and running end of the month and see how much she can produce.

As a side note, management are really interesting in this company, 3 out of 5 directors are same 3 out of 5 on MAK (Minemakers), worthwhile doing a read of the website and background google on these guys if your a holder

Last update, expiry of escrow on 2 million shares on some conditions met (not a big announcement), good luck to all like me waiting

 

[Ruprect]

New joint venture announced for KEY. Looks promising. Now just to wait for the flow rates on Kilwani which shouldnt be too far away.

Key Petroleum Ltd (ASX code: KEY) has signed a Consortium Agreement with Pancontinental Oil & Gas NL (ASX code PCL) for joint petroleum exploration activities offshore Namibia.

Key and Pancontinental believe that the area holds significant oil exploration potential and have been jointly studying existing regional geological and seismic data for some time.

Pancontinental currently holds a Reconnaissance Licence, No RL-1 of 2007 (‘RL’) covering an area of approximately 30,000 square kilometres, offshore from the coast of Namibia, in an area known as the Walvis basin.

 

[Trojax]

Bit of interest in the stock last few days, preliminary buy ups or day traders, who knows :

Getting closer to end of month and the flow rig being fitted, hopefully an ann soon that all is going to plan with this. The management here have been very good so far, ahead of schedule and under budget previously. Wouldn't expect less I guess since most of them are MAK directors

Anyone know anything about Namibia and the 'Walvis' basin, good hunting ground?

Also news on Italian off-shore permits is due soon, I see on their web site seismic was to begin, no new ann so gather still waiting on gov approval, I might write to them and ask how thats going lol.

 

[Ruprect]

Some news on Key which is good for those of us who have been waiting. Machinery has arrived, and testing has commenced to determine flow rate and size of resource. Should have some news on that soon i would expect.

But in addition, the really interesting announcement was the acquisition of another area, next to the exisiting producing songo songo field, in joint partnership with aminex again. But this time KEY have a 50% stake!! Im very impressed with this one, might be very interesting times ahead!