SAE - Salinas Energy

[eddyeagle]

ANNOUNCEMENT TO THE AUSTRALIAN STOCK EXCHANGE: 13 MAY 2008
300 BOPD INITIAL TEST RATE FOR LOMBARDI 10-27H
Salinas Energy is pleased to advise that the first of the current four new horizontal production wells at
the Company’s 100% owned North San Ardo oil field (NSA) has been successfully tied into the
production facility.
The Lombardi 10-27H production well has tested at initial rates in excess of 300 bopd which exceeds
the Company’s expectation for this well drilled in what is interpreted to be a thinner reservoir section
within the overall field. Production rates for the NSA field have been as high as 700 bopd during the
last four days and have averaged 660 bopd during that same period.
The second horizontal well drilled in the program, Lombardi 13-27H is expected to be on production
later this week which will further increase production levels at NSA.
The third well, Lombardi 11-27H is drilling the horizontal section and is expected to finish drilling this
week when the rig will be moved to the final well in the current program.
Commenting on the current operations Salinas’ Managing Director John Begg said:
“Initial production rates from this well look very encouraging and we fully expect production levels at
the field to reach record highs within the next few weeks coinciding with record world oil prices. Our
April oil sales from existing wells at NSA of 13,696 barrels will gross the Company over US$1.3
million so by more than doubling our production rates in the coming weeks we expect a material
increase in our monthly sales revenues.”

 

[BenH]

An interesting day for SAE today, very strong close, keep an eye on this one tomorrow, or Monday, me thinks there may be some news coming, at least its due so i think its a fair me thinks me thinks

 

[Motogoon]

Whats going on with this one?! Seems like oil price goes up, sae goes down. Anyone think there's a reason for this or is it just bad market sentiment.

 

[BenH]

A number of reasons i have heard around the traps, company buying back their shares, short sellers, poor advertisement of the company, no new news so lack of interest, bad market sentiment, and i guess the list could go on. Im looking at jumping back in all the same, i think its time for some up movement IMO.

 

[matt1987]

hi all

i have a question in relation to sae that i havent been able to solve through my initial research. from what i can see, when sae first floated they had some renewable energy technology/patents as well as their oil assets. from my brief research my understanding was that it was some type of combustion machine that produce energy. the thing is, i cannot work out what has happened to the company renewable energy assets. did they sell them ? if so what did they do with the funds ?

i like the look of sae but i need a greater understanding of the company's past and future plans.

i have also noticed fat prophets have been talking up this one for a bit now - seems that not even the fat prophet client base buying (im assuming at least some of their client bought in on the recommendation) can push up the sp.

would also appreciate any general comments.

 

[rub92me]

A large seller has been consistently dumping 100,000 shares on the open and close for the past 4 weeks, usually way below the bid price which hasn't helped the share price. Since yesterday the dumper increased to 150,000 at open and 100,000 at close, and today there's another 150,000. Quite clearly manipulation of the price as it typically constitutes more than 25% of the volume traded in a day. Of course the ASX does nothing about this

 

[matt1987]

took a big smashing today - down over 10%

no announcements out so im assuming its just copping its fair share of the oil stock sell off due to the declining PoO.

when i was doing a bit of research i saw that SAE had some renewable energy technology when they first listed a few years ago. does anyone know what happened to this. did they sell it off ?

 

[Motogoon]

Everything's just getting smashed at the moment. I'm thinking of buying back into sae. Must be good value at these prices. They were still being recommended as a buy from fat prophets at 50-60 mark so they must have good fundmentals, which i admit seems to count for absolutley nothing at the mo, but surely its just a matter of time!!!???

 

[seasprite]

I assume the 7.375m unlisted options at 0.40 and the 3.325m at 0.80 will expire on 31/12/08 if the sp remains this low. Have started researching SAE. I keep thinking it looks like a good buy , which in fact it is , however looks like someone is really intent on dragging down the sp , and this is happening on days of no buyback activity and a excellent day for resources. This sort of activity does not do SAE any justice whatsoever .

 

[rub92me]

I assume the 7.375m unlisted options at 0.40 and the 3.325m at 0.80 will expire on 31/12/08 if the sp remains this low. Have started researching SAE. I keep thinking it looks like a good buy , which in fact it is , however looks like someone is really intent on dragging down the sp , and this is happening on days of no buyback activity and a excellent day for resources. This sort of activity does not do SAE any justice whatsoever .

A significant holder has been selling this down, although he seems to have stopped for the moment because the price has fallen too low. I have bought some in the low twenties as I think this one has great potential over the next couple of years. A long term producing well which provides steady income, with plenty potential targets.Thirty cents will take a while to clear though if that significant holder really wants to get rid of his entire holding.

 

[seasprite]

does anyone know what rule 7.33 is that SAE refer to in their buy back (3E) regarding highest and lowest price paid.

 

[rub92me]

Rules can be found on the ASX website, see link. Chapter 7.
http://www.asx.com.au/supervision/rules_guidance/listing_rules1.htm

 

[seasprite]

rub92me , found the rule , thanks for that , I picked a parcel up the other day in the low 20's , so I guess I,m in for the long haul . Looks like a sound company , already producing . The new gas line is said to reduce costs significantly as opposed to the propane units they were using and an Independent review of McCool Ranch may prove beneficial so I look forward to this being announced in the near future.

 

[seasprite]

So who were the tea drinking , biscuit & pancake eating shareholders who voted for ESOP (employee share option scheme) last year.
"Options shall be issued at an exercise price to be determined by Directors and shall be no less than 110% of the weighted average market price (as quoted by ASX) of the company's shares for the 28 trading days prior to the issue of the Options. "
Hello read the fine print before you tick the box in between sipping and donut munching . In good times you give them nothing because there is bound to be a bad time , and in bad times you give them a little lee way. I would have thought having a job would be incentive enough .
If I were a director I would push the share price as low as I could for the lowest weighted average market price because shareholders said that I could.

 

[rub92me]

That's quite selective reading you present there seasprite. The incentive scheme has 3 components, this is one of them. The amount of options we are talking about is also very modest. Overall I would say their compensation scheme is best in class. And the management have done a fantastic job as well, despite the current shareprice. The idea that directors would, or even could, deliberately drive down the shareprice for your suggested purpose is preposterous imho.

 

[seasprite]

SAE is sure to benefit with their share buy back at these prices and anyone with spare cash. 0.15c can it go any lower.

 

[rub92me]

It actually is already lower: 14.5 cents, which gives them a market cap of $35 million. They should be achieving revenue of 22-25 million for the calendar year with cash in the bank around 10 million at end of year. Margins are obviously getting smaller with the lower oil price, but exchange rates have compensated for that to a large degree so far. They have a long term producing asset with a low cost base, are cashflow positive, don't need extra funding and are actively expanding operations. Unless oil price goes below USD 40 and/or exchange rates turn against them they will stay cashflow positive.

 

[seasprite]

It actually is already lower: 14.5 cents, which gives them a market cap of $35 million. They should be achieving revenue of 22-25 million for the calendar year with cash in the bank around 10 million at end of year. Margins are obviously getting smaller with the lower oil price, but exchange rates have compensated for that to a large degree so far. They have a long term producing asset with a low cost base, are cashflow positive, don't need extra funding and are actively expanding operations. Unless oil price goes below USD 40 and/or exchange rates turn against them they will stay cashflow positive.

You would think SAE would buyback more than 44,145 shares today unless they plan on knocking the sp down more. Management must be doing a fantastic job though.

 

[Tiles]

Interesting quarterly return posted yesterday:

http://www.asx.com.au/asx/statistic...ae&timeFrameSearchType=D&releasedDuringCode=W

 

[seasprite]

yeah , I'm quite impressed with SAE , however I will be far more impressed when they complete their buyback activity.

So far , I have them with a 100% drilling success rate in North San Ardo .
Horizontal wells seem to the better way to drill nowadays .