NWE - Norwest Energy

[Sean K]

Well, we're all eating our hats at the moment here. LOL

Looks to be pretty weak at present. Probably ran too hard and we thought there was no end in sight....well, I was hoping for the 37 ish target before I would have lightened the load. 27 looks to be important short term, or 25 is definately on the cards. Feel free to poo poo the randomness of these lines. I have a bad hangover.

Longer term nothings changed though, just considering short term trading options...

 

[Wilson!]

Hi all

I have posted this elsewhere, but I truly think NWE is a low risk winner, with royalties coming on, albeit a month delayed now, hence perhaps the drop a few cents

She had to drop back a little, and did to 26c, but look at that beautiful chart - bounced today and closed at 27c

Let's hope all the believers got their chance to top up and jump onboard and NWE continues back above 30c

A few valuations seem to be lingering around about the 35c to 40c short term target range, but we will see what happens now

Good luck to holders

 

[Caliente]

hi - just wondering given present TAPIS/Puffin reserves etc. what is the royalty worth to NWE at the moment, per annum?

 

[spottygoose]

Intersuisse Another Supporter Of AED Oil

FN Arena News - June 07 2007

By Chris Shaw

Until the end of last month when Credit Suisse downgraded the stock to Neutral on valuation grounds AED Oil (AED) had scored a perfect four for four Buy ratings in the FNArena database on the back of its expected production growth from the Puffin oil field.

With the stock having pulled back a little since the Credit Suisse change the valuation scenario is improving, enough for Intersuisse to rate the stock as a Buy at current prices given the upcoming commencement of production.

The broker notes production is forecast to start in the September quarter at a rate of around 30,000 barrels per day, while this should be added to in 2008 via the recent acquisition of the Talbot oil field located just 60km away from Puffin.

This should enable some infrastructure to be shared, so lowering production costs for the company. At the same time there remains exploration potential at Puffin, while the broker also is attracted to the fact the oil produced will be Tapis crude, which attracts a premium given its relatively low sulphur content.

On the brokers estimates the company should generate a net profit in FY08 of $338.4m, compared to a forecast loss this year of $14.5m. Such a result would translate into earnings per share of 226.4c, which equates to a P/E (price to earnings ratio) of just over 3x at current prices.

Shares in AED Oil are stronger today despite the weaker overall market as at 3.30pm the stock was up 17c at $7.37. This compares to a recent high of $7.76, while the average price target in the FNArena database is $7.42.

 

[chops_a_must]

Interestingly, if you take the run from 10c to 20.5c as the first leg up, multiply that by 1.61, then add that to the recent intraday low of 14c, you get close to 31c. So that is my tip. And given that NWE and AED trade at a ridiculously low level compared to their value, it is consistent with a conservative SP valuation. (Not saying it isn't worth more, just that would be where it gets to.)

Should have listened to myself... Lol!

But I think this is going higher now. 31c looks to have been a natural point of resistance. And I guess the above comment validates this as somewhat of a W5 coming up.

Volume has dried up on this down move, it has bounced off a fib level and needs to break out to maintain the short term up trend. It also looks to have formed a bullish pennant. All things look up and I can't see this heading down if fundamentals are maintained.

Cheers,
Chops.

 

[djones]

AED has run up a bit today and NWE has followed suit currently at 28.5c, this means it has broken up from a triangle on the chart, see chart (thanks BSA!). Fundamentals are good for this stock and I have bought back in today after a breather with FNT.

 

[djones]

Hi Chops, Where do you see NWE going after breaking 31c resistance? On first oil this is likely to break that resistance but have no idea where it may head and what likely resistance levels are!

 

[chops_a_must]

Hi Chops, Where do you see NWE going after breaking 31c resistance? On first oil this is likely to break that resistance but have no idea where it may head and what likely resistance levels are!

Don't have the historic resistance levels and I don't think that really matters as of now.

I see it having its next stumbling block between 35 and 37c. Closer to 37c though. That equates to a level where most holders will be sitting on a 100% gain... and also the more conservative/ cautious fundamental valuations. Long term its going up... whichever way you look at it.

Personally it looks like it is going to break resistance before first oil. Volume has dried up (until today) and it has popped out of the downward short term trend line. So I pyramided in today. It will look nice on the EOD data today, and is definitely now a solid potential breakout.

Chart attached. Note: today's data not on it.

Cheers,
Chops.

 

[porkpie324]

Hi Choppy, have been holding NWE for some time now about 2years from memory so starting to get some reward. BTW have you researched TEX (Target Res) I dipped my toe in the water yesterday opened a small position, anyone else have info on TEX.porkpie

 

[BankRoller]

NWE has followed AED nicely today with a rise of 13.46%. AED up 14%. Interesting that Credit Suisse had a SELL rec on AED. However, seems like it was a tactic on their behalf to buy in themselves at a cheaper price. Standard IB play. Credit Suisse look like they have been missing a few lately. Today they had a sell rec on ZFX as well. Who knows tom they might have a sell rec on WOW as well.

 

[nizar]

NWE has followed AED nicely today with a rise of 13.46%. AED up 14%. Interesting that Credit Suisse had a SELL rec on AED. However, seems like it was a tactic on their behalf to buy in themselves at a cheaper price. Standard IB play. Credit Suisse look like they have been missing a few lately. Today they had a sell rec on ZFX as well. Who knows tom they might have a sell rec on WOW as well.

I think Credit Suisse were the guys that told their clients to sell AED at $5.

Yeh -- its a standard IB play to downramp a stock and accumulate it.
I rememebr Merril on OXR, sell all the way on the run up from 90c to about $3.50, in which time they had accumulated about 11%.

NWE having trouble at 29.5, having failed there on a few occasions.

 

[BankRoller]

Where do you see the price for NWE? I think it is due for a breakout a new support around 38 cents in the lead up to AED producing oil.

 

[Sean K]

Where do you see the price for NWE? I think it is due for a breakout a new support around 38 cents in the lead up to AED producing oil.

Hooley dooly, BR, where do you get 38 cents from? 1 years target? 1 week? Ambitious. Need to provide some detail when coming to those conclusions thanks! A breakout through 30 will be very significant, but a price target is not possible from here using TA, IMO.

 

[aosleung]

Agree with Kennas. A target of 38c is significant! BR, did you obtain from that from a brokers report? Would be very interested in hearing your reasoning behind that. Can someone here compare AED and NWE's share price movement to see the correlation? I had a feeling that NWE did not rise as much as AED upon AED's announcement. Any ideas?

 

[BankRoller]

Well as aforementioned the breakout has happened, NWE closing at 34 cents today. However, AED closed lower. Kinda hard to draw a strong correlation just yet.

 

[aosleung]

Yes BR, we're still interested in understanding how you got your 38 cents. I've done a quick regression of the returns of NWE and AED (since 1 Feb) and have noticed that NWE outperforms AED when AED is trending up but underperforms when AED is trending down. The r square of the cumulative returns of both stocks is around 93.5% which shows a strong correlation. The fact that they are moving in opposite directions has happened before back in May 2007 though throughout the past few months, they have generally moved in the same direction. Given NWE fell significantly (12% drop) on 28 June 2007, this increase almost looks like a catch up to the recent increase in AED's share price. Intuitively I am guessing that when people sell out of AED, they are profit taking and then reinvest in NWE given it lags behind AED and earns 1.25% royalty from AED. NWE's outperformance is probably due to the lack of coverage/publicly available information. The relationship seems to hold up quite well but obviously this is just my opinion. AED and NWE seems interesting stocks to hold.

 

[spottygoose]

Thanks to Mud on SS:

From www oilbarrel

Norwest Energy Set To Profit As Puffin Prepares For Lift Off

Timings may have slipped - and this is far from uncommon in today’s overheated oil and gas sector - but Australia’s Norwest Energy is still on track for first cash flows from the Puffin oilfield off the coast of Western Australia this year. The Front Puffin FPSO is due to arrive on location in permit AC/P22 in the Vulcan sub-basin of the Timor Sea next month with first production of 30,000 barrels per day from two horizontal wells due shortly after.

ASX and Frankfurt-listed Norwest may only be due a trickle of this output - it has a 1.25 per cent over-riding royalty interest in the field - but it is still reckoned to be worth A$70 million, greater than the company’s current market cap. Importantly for a small company, this royalty interest involves no expenditure for Norwest.

Puffin has shaped up into a very nice project. The reservoir statistics are reassuring, with porosity of 29 per cent, water saturation of 11 per cent and a very healthy recovery factor of between 50 and 69 per cent and there have been significant reserves upgrades as the field development work has progressed. What’s more, Puffin has additional potential. This year’s production will come from the 40 million barrel Puffin North East field but field operator AED also plans to bring Puffin South West, another possible 40 million barrel deposit, onstream in the first half of 2008. An appraisal/development well will be drilled in October with a targeted flow rate of 25 to 32,000 bpd.

This will be a nice addition to Norwest’s existing production from its 1.278 per cent interest in the Jingemia oilfield in the onshore Perth Basin. During the most recent business quarter, this amounted to 2,555 barrels or around 28 barrels per day. It isn’t much but it does help keep the lights on, generating around A$1 million a year.

The company also holds exploration interest in Australia. In the Perth Basin, the Freshwater Point prospect will be drilled later this year or early next but of more interest is the company’s 24 per cent interest in AC/P32 in the Vulcan sub-basin, where there are plans to drill the Azalea/ Wisteria multi-target well. Azalea is a large stratigraphic play that could hold 180 million barrels of recoverable oil while Wisteria is a deeper conventional target, possibly holding some 20 million barrels recoverable.

The company also holds an option to negotiate with local aboriginal communities for the EP139 permit in the onshore Bonaparte Basin in the Northern Territories. This is a block that has not been explored since the 1960s, when a number of wells encountered hydrocarbon shows. There is now added impetus to explore this acreage given that a new gas line is set to cross the block – this is key as infrastructure can make or break a project in the vast emptiness that is Australia.

In more recent years, Norwest, like so many Australian firms, has taken steps to diversify overseas, targeting projects in the US, the UK and India. Now the company is withdrawing from its shale gas interests in the US Appalachians, seeking to extract value from a project where drilling success has been mixed but the acreage is gaining in value.

The UK North Sea, with its low cost “drill or drop” promote licences, has been a favoured destination and Norwest can now boast interests in eight blocks. It has 25 per cent of Blocks 48/1b and 48/2c, where the operator is seeking a drilling rig to drill the Cobra prospect. This is a tight gas project with 65 to 95 bcf of proven reserves with potential upside of 450 bcf.

Blocks 47/8d and 47/13c (Norwest 50 per cent) in the Southern North Sea are believed to hold an extension of the 850 bcf Amethyst gas field, which lies to the northwest. Norwest also holds 50 per cent of adjoining block 47/7, which is also ontrend, and updip, of Amethyst. In the Inner Moray Firth, the company has 25 per cent of 12/16b, 12/17a and 12/22b, near the 150 million barrel Beatrice oilfield and where a number of leads and prospects have been identified.

Norwest has also opened an office in India but has yet to sign any upstream projects here. It has, however, built relationships with Indian firms, among them Bharat Petroleum and Tata, which have farmed into its projects in Australia and the North Sea. These relationships with some of the power players in India’s booming upstream industry, not to mention the backing of Indian finance for its Australian and UK ventures, could prove very worthwhile further down the road. In the meantime, investors will be keen to see Puffin brought onstream and those cash flows start to boost the balance sheet.

 

[sfx]

If anyone's interested, and haven't seen my other post in the AED forum/topic thread, checkout a movie/documentary called "A Crude Awakening: The Oil Crash".

A negative spin put on the whole oil scenario, but without the dramatics of say a Michael Moore et al. Very factual.....

Fingers crossed with Puffin & NWE !

Anyone know anything more about NWE's prospects in other parts of the world?! They seem to have a bit of a portfolio of prospects themselves?!

 

[Sean K]

Anyone know anything more about NWE's prospects in other parts of the world?! They seem to have a bit of a portfolio of prospects themselves?!

Highlights from the last presentation are listed below, check their website for more detail sfx.


As far as valuations, the only one I've seen is 12 months $0.375 from Mar 07 from DJ Carmichael, so it's looking ahead of sched to reach that target.

I took some profits just under 30 cents because I thought failing there was bad karma. Good one kennas LOL

 

[sfx]

Yeah thanks for the info Kennas - I went back to their presentations and had a bit more of a read.

NWE is a wierd holding, considering AED is sky rocketing, NWE is staying pretty much firm at the moment.

I'm wondering when there's going to be a large upside to NWE, considering they have an interest in the Puffin Field ??!?

I can only deduce that its not widely known to the market - or perhaps the institutions aren't recommending NWE, but only AED ?!

Perhaps there is bad karma as suggested Kennas, or moreso clouds obscuring NWE ?!

I'm sure there's heaps of others who are sitting on NWE waiting on the upside coming out of AED........ watch the market I guess......