MOG - Moby Oil and Gas

[YOUNG_TRADER]

Hey guys

After a 3year silence in the Gippsland basin Apache have spud a huge well for MOG and are free carrying them through drilling,

The target is Coelacanth which is estimated to have a mean 30 -40 M bls of Oil recoverable

@ $20 bl = $600m - $800m EV

Net to MOG = $100m -$133m = 90c - $1.20

The upside is 75M bls which would be worth $3 to MOG

So I see the stock potentially running once the mkt is aware of the upside potential



Its an all or nothing play, but Apache have committed to dril 10 wells in the basin which should bring it to life, also MOG have another 2 free carried farmed out wells so there should be plenty of activity for it


Make no mistake its a speccy!!!!

 

[JTLP]

Hi YT,

Love your work son. Always good research.

Could you fill me in on the following:

Cash on Hand
Other prospects/projects
Past Projects
Shares On Issue

Thanks million dollar baby

 

[YOUNG_TRADER]

JTLP I'll do a proper write up tonight

But for now,

Thye don't have much cash on hand, but then again they don't need it as they are fully carried for 3 wells,

EACH WELL OFFERS HUGE $1-$3 Upside in the success case and since the cost to MOG is $0 well you do the math,

They hold a very strong position in the Gippsland basin and any success for Apache will make MOG's tennements appear more attractive for farm in's


The company has about 80m shares on issue, so at an SP of 14c is carrying a mkt cap of $11.2m

 

[JTLP]

Thanks YT...appreciate it!

Maybe tonight you can also answer this for me:

If the wells are dusters, what will be the affect on MOG both SP wise and projects wise?

If they are being free-carried through this and have nothing else on the horizon, whats keeping them afloat? LOL

 

[YOUNG_TRADER]

Hey JTLP,

Sorry for the delay, research coming soon I promise but for now

MOG is not a 1 shot wonder it has farmed out 2 permits, 1 to Apache 1 to Stuart Petroluem and should be free carried for the drilling of 4 very high impact ( $1-$3 value to MOG) wells,

It also has a host of other permits in the Gippsland basin where it has done extensive siesmic and reprocessing/interpreation work and is looking for further farmout opportunities,

The depth of its permits and technical data that MOG posses over them easily justifies a mkt cap of $20m = 25c


Sell all the images I have posted it clear shows how prolific the areas around MOG's permits are

Also of note is the fact that a single dicovery like the kind Nexus made, transforms these juniour oilers into what NXS is today a $500m oil MidCap

 

[YOUNG_TRADER]

There wasn't enough room to post all the permits in 1 post so here are the balance,


The key to notice is the amount of Oil and Gas fields scattered all around MOG's permits,

Also check NXS's history, you'll see how just one discovery changed their life, its because these target are literally company making


This last image is MOG's offshore Otway permits

p.s. whats really amusing is that MOG has gone un-noticed meanwhil BAS its brother company seems to be drawing support even though BAS has twice as many shares and its target is smaller than MOG's not to mention the fact that BAS only has 1 farm in and MOG has 2 (ie Stuart as well)

So MOG, half the shares, hlaf the mkt cap, target is larger and twice as many farmouts, yet its current mkt cap is half that of the well supported BAS go figure

 

[Sean K]

Not a hell a lot of interest considering the upside. I suppose the downside is that both programs hit mud. Still, in my twisted logic the sp can only go down 100% if it completely fails but if they have success then the RR could be quite handy.

What's the % of success attributed to something like this?

 

[YOUNG_TRADER]

Not a hell a lot of interest considering the upside. I suppose the downside is that both programs hit mud. Still, in my twisted logic the sp can only go down 100% if it completely fails but if they have success then the RR could be quite handy.

lol tell that to BAS, another 250k bought at 14.5c-15c avg and they have 30m shares being issued at 12.5c

MOG offers alot more potential given its tiny mkt cap,

In this mkt everyone likes to be bearish and look at the "empty glass" view,

I am surprised no one here looks at the possibility of the full glass,

You all keep asking how low can MOG go? well currently its mkt cap is about $10m, it costs about $5m-$10m to drill these deep wells in the Gippsland Basin,

To drill these wells, you need to have done extensive siesmic acquisitions and reprocessing which can take up to 18months and about $5m

As I have shown, MOG have a bunch of permits yet to be farmed out which have alot of technical data over them,

So whats the downside to MOG? Well I'd say their a definate takeover at $5m of net cost, as it would cost far more than this in money and most importantly time to acquire the assets and technical data they have

They have multiple ready to drill prospects, Apache have committed over $100m in drilling to the basin over the next 12 months

So $5m cost + $2m cash = $7m offer = 8.7c good takeover value here

And then whats the upside again? ? ? ?

 

[YOUNG_TRADER]

I should add that as a % of my portfolio MOG only makes up like 5%

But it is these high risk high reward plays that can sometimes pay off handsomely,


Also of interest to me is the schedule Apache chose for its drilling,

If you take a look at the attached image you can see that in order of well the common sense way would be

1. Wasbi - 2. Speke - 3. Coelacanth

Instead they have gone

1. Wasbi - 2. Coelacanth - 3. Speke

ie they are passing Speke and dragging the rig to MOG's Coelacanth well before Speke Sth, why I wonder?

 

[JTLP]

YT you make some interesting points...

How's the write up going for me

Do it for me Mr Trump :

 

[YOUNG_TRADER]

Well MOG have just announced a second update to the well, its just under 1000m's deep and they are running wire line logs,

I don't expect any oil shows at this shallow level but you never know,

Its the 2500+ level I'm interested in

p.s. here you go JTLP, better late than never

MOG​

Mkt Structure

Shares
80m
27m 30c 30/6/08 MOGOA options

Cash $1.8m
MOG don't need much cash as they are free carried for the drilling of 3 wells and will continue to farm out their permits on such a basis, ie dilute down to a % whereby they are free carried


Mkt Cap @13c = $10.4m Current




Projects
Vic P45 Oil, 16.67% Free Carried Interest, Gippsland Basin Offshore VIC

Multiple targets for drilling, Apache are going to free carrry MOG for 2 wells on this permit,

The first well which has just spudded is Coelacanth it has a target ranging from as low as 6M bls to as much as 91M bls, with a mean of 32Mbls- 43Mbls

Now in the event of a success, Oil companies used to trade on an EV of $20bl, however given the surging oil price perhaps $25bl is now more appropriate to reflect the EV value, using the mean values and MOG's 16.67% interest and 80m shares on issue we get the following

32M bls x $25 x 16.67% = $134M = $1.67c value to MOG

43M bls x $25 x 16.67% = $180M = $2.24c value to MOG

Even the low case 6M Bls x $25 x 16.67% = $25m = 30c MOG

But the high case 91M bls x $25 x 16.67% = $380m = $4.75c value MOG

Any sniffs of oil will cause a rally in the stock as punters wake up to the potential that may lie within Coelacanth



Vic P53 Oil, 8.3% Free Carried Interest, Gippsland Basin Offshore VIC

Now here MOG has again managed to farm out its interest such that Stuart Petroleum (STU) will free carry MOG for 2 weels

The first well here will be Bazzard 1 which has a mean target of 50M bls and should spud Sept 08


Vic P47 Oil, 35% Pre Farm Out, Gippsland Basin Offshore VIC

Vic P 47 is surrounded by many oil and gas fields, in particular NXS's recent LONGTOM Gas discovery, which has upgraded the prospectivness of this permit.

MOG is seekin a farmout partner, most likely it will be Apache



Vic P41 Oil, 25% Pre Farmout, Gippsland Basin Offshore VIC
Vic P41 has had alot of surveys siesmi and mapping done and MOG has identified a number of large targets

Benchley 245M bls Oil + 1992 BCF Gas Target
Kipling 205M bls Oil + 944 BCF Gas Target
Oscar 80M bls Oil + 75 BCF Gas Target

Anyone of these targets if successful would be worth $2+ a share to MOG




EPP 34, 35 & 36 Offshore Otway Oil, 20%, Offshore Otway Basin Sth Aust

Very early stage elephant area's, much more work required to define targets etc etc


Summary
-Current Mkt Cap = $10.4m
-Cash = $1.9m so EV = $8.5m

-Free Carried thorugh the drilling of up to 4 wells where any one of them could add $50m - $400m in value to MOG

-The many permits with high quality technical survey/seismic and mapped 100M barrel targets data makes MOG an attractive takeover target for someone like Apache

- The Gippsland basin is a proven basin with lots of large Oil and Gas discoveries, a single discovery can become a company maker (see NXS for case in point)

Bottom line MOG is not a 1 trick pony

 

[urgalzmine]

Hey YT

How do you spot shares like this?

http://au.biz.yahoo.com/080221/43/1m80y.html

The above link indicate that the area MOG is at the heart of oil/gas

VIC/p45 targetting 64mboe, IMI, an independent third party geological appraisal company estimated that VIC/P45 could possibly contain approximately 350 million barrels of oil and 4 TCF of gas.

VIC/P53 VIC/P53 consists of approximately 182,858 gross acres. VIC/P53 is also called the "Hole of the Doughnut" as it is surrounded by 9 giant producing oil & gas fields, leaving VIC/P53 in the middle.


According to:
http://money.excite.com/jsp/nw/nwdt...3b5458&date=20080313&alias=/alias/money/cm/nw

VIC/P45 Proven Reserves
"Back in the late 1980's, Petrofina made two discoveries on VIC/P45 which includes one oil field discovery, called Archer and one gas field discovery, called Anemone-1A. The Archer anticline has four (4) oil pays and seven (7) gas pays with approximately 1280 feet of net pay section. The estimated reserves of the Archer field are approximately 40,000,000 barrels of oil and approximately 32 BCF of gas. The decline in the price of oil in the late 1980's made the Archer & Anemone non-economic to develop."



According to:
http://sec.edgar-online.com/2005/04/14/0001061288-05-000004/Section2.asp
VIC/P45 is only 1.5miles east of Kingfish oil field which is the largest oil field in australia, now whats interesting is that BHP conducted a seismic survey over the entire area, cost $10mill. BHP assigned it to Exoil Limited and MOG

Conclusion is that there has been proven reserves in the same area as VIC/P45, but was not economically viable at that time.
Close to Kingfish oil field and the fault line runs through MOG. Reminds me of a straw and a milkshake (If you have watched " There will be blood " )

I know some of the info is in the ann and YT, geographically digging is in a nice pretty spot. I only looked at a couple of the drill sites so there could even be more oil. Please correct me if the info here is incorrect. I know some of the info can be a little sus as the writers have their own agenda, so do your own research.
cheers

 

[Sean K]

For all the potential listed above, I'm surprised it's coming off leading into potential discovery time. Must be due for another update in the next day or so. Couple of keen sellers pre-open going to take it down, unless they're pulled.

 

[urgalzmine]

what the hell..

IT doesn't make sense. Where is the oil? latest ann 25/03/08 indicated that they are pulling out of P45 and abandoning it. The oil must of already been sucked dry from other oil operators around the area.

Well that was big blow for me, i was soo excited. I suppose now we wait for sept for drilling to occur on the P53 site.

sigh

 

[kromey]

For all the potential listed above, I'm surprised it's coming off leading into potential discovery time. Must be due for another update in the next day or so. Couple of keen sellers pre-open going to take it down, unless they're pulled.

Unfortunately a DUD nothing found plugged and abandoned. http://imagesignal.comsec.com.au/asxdata/20080325/pdf/00825649.pdf

 

[nioka]

For all the potential listed above, I'm surprised it's coming off leading into potential discovery time. Must be due for another update in the next day or so. Couple of keen sellers pre-open going to take it down, unless they're pulled.

The keen sellers knew what was going to be announced. They got their price before the duster announcement. I wonder if they are buying back, after the drop, in anticipatiion of the next well.

 

[Sean K]

The keen sellers knew what was going to be announced. They got their price before the duster announcement. I wonder if they are buying back, after the drop, in anticipatiion of the next well.

I'm not buying anymore at the moment, but haven't sold. I think it was overdone though. Still potential with the other wells to be drilled, free carried. Must be looking tastey at this price as YT indicated above.

 

[fgzq88]

I put an order at 0.1 last week and forgot it. Hopefully there's some good news coming out shortly from other wells.

Anyway that's the risk we should take as it's all about potentiality.

 

[YOUNG_TRADER]

Well like I said veryy spec, high risk high reward,

But I reckon this is way over done, at 7c its mkt cap is $5.6m which is more than the cost of a well, so currently I would think it makes sense for Apache to have a crack at MOG, rather than free carry them through wells

Also we still have another 3 free carry wells to come, so all is not lost,

I am holding my position and hoping for the best in this Spec Oiler

 

[JTLP]

I put an order at 0.1 last week and forgot it. Hopefully there's some good news coming out shortly from other wells.

Anyway that's the risk we should take as it's all about potentiality.

^^^^
LOL...love it!

YT + Tiger Man - I agree this seems like an overdone sell off. 3 Free Carried wells to drill, highly prospective area...surely there could be some oil in the lower ranges of YT's calcs?