TEX - Target Energy

[sydneysider]

The first East Chakely well has started flowing oil. Estimated size of the development is 2.4 million barrels. At 25% interest to TEX that equates to about 600,000 barrels or at least US$60,000,000 in future production less drilling and development costs. Good luck to all longs.

 

[sydneysider]

PRC reported to-day that TEX's Pine Pasture#2 tested successfully at a rate of 700-1,000 of fluids per day that will produce at a rate of 30-50% oil from W2 Sands. A pump has been designed / ordered and the well will be put into production. A second well is planned probably before Christmas as well as several water disposal wells. That should give TEX (with 25%) about 75-150 bpd of new oil production from a field containing at least 2.4 million barrels of oil plus gas.

With a market cap of $8,000,000 and current cashflow of about $250,000 per quarter Pine Pasture#2 will have a very big impact on TEX's bottom line. At US$100 per barrel x 75 bpd x 365 days = A$3,100,00 per annum of cash flow, which doubles if the next planned well comes in with similar flow rates. That could potentially put potential cashflow at a little over US$8,000,000 annualized with another three wells planned before Christmas, one of which is targetting a potential flow at several thousand barrels per day.

Cash is currently A$5,000,000 and East Chakley will make TEX a very profitable minnow. The state of the current market is very treacherous, so look for strong cashflows. Minnow that are strictly explorers will run out of cash and wither in this type of market. Good luck to all longs.

 

[hoppielimp]

You know what is a bit bizarre, that TEX is not reporting it. I know that they said they will not report until well is in production, but you would think that from their last announcement of 405 barrels of fluid at an oil cut of 20-50%, to an increase to 1000 barrels of fluid with a 30-50% oil cut is significant ?

Also I've noticed that the oil reserve, although its a target, has never been quantified...

Everyone including Petro Resources seems to intimate 2.4-2.5 million barrels...but no-one has definitively said so either.

Oh well...thought PRC annoucement as a 34% participant in East Chalkley would have moved TEX....the market I guess is the market.....sigh...

 

[sydneysider]

You know what is a bit bizarre, that TEX is not reporting it. I know that they said they will not report until well is in production, but you would think that from their last announcement of 405 barrels of fluid at an oil cut of 20-50%, to an increase to 1000 barrels of fluid with a 30-50% oil cut is significant ?

Also I've noticed that the oil reserve, although its a target, has never been quantified...

Everyone including Petro Resources seems to intimate 2.4-2.5 million barrels...but no-one has definitively said so either.

Oh well...thought PRC annoucement as a 34% participant in East Chalkley would have moved TEX....the market I guess is the market.....sigh...

IMHO East Chalkley may be larger in size than than 2.4-2.5 million barrels because they hit two pay zones in Pine Pasture #2, W2 sands have "most likely recoverable" of 2.4 million barrels, with anticipated flow rates of around 400 bpd based on the first Pine Pasture well. The W1 Sands are 3.4 meters thick and may constitute an additional 36% increase in payable sands. So my off the wall guess is 2.4 million + 36% = 3.26 million barrels of "recoverable oil". TEX share of this at 25% = 815,000 barrels of future production which is very significant to this minnow.

The interesting thing about this project is that it gives TEX (for its $8 million cap) a very significant cash flow. I suspect that the current market is so bad for all stocks that now is the time to rummage thru the bargain bins and find those stocks that have growing cashflows like TEX . At this stage TEX has $5 million cash and at least three new (very interesting) wells in the works over the next few months plus the further development of East Chalkley which have all been paid for.

 

[Trader Paul]

Hi folks,

TEX ..... will be looking for a low over the next few days, then anticipating
some significant news next week, as 3 positive time cycles slot into place,
around 12-15092008 .....

have a great weekend

paul



=====

 

[Shrewd Crude]

Anybody hold TEX?
I bought a few TEXO's a week ago in the lead up to The Catapult well which should be spudding in the next month...(big target well)...
Im just gambling on the well, as I think it offers great risk return with Snapper-a3 low risk and highly likely to discover as its in a proven region... this and the existing profile of revenues and discoveries is likely to offset some of the downside...

.^sc

 

[STRAT]

Hi folks,

TEX ..... will be looking for a low over the next few days, then anticipating
some significant news next week, as 3 positive time cycles slot into place,
around 12-15092008 .....

have a great weekend

paul



=====

Hi Paul,
Are you still holding TEX and are you planning to update your chart for TEX in the near future?. I would very much appreciate an update.

Holding some TEX @ 3.1c

 

[knackers007]

Does anyone have any comments/thoughts about this company? It's just had a capitol raising and seems to have some good buyers coming in although it hasn't had much effect on the SP. From previous company announcements, it looks like they will be announcing the flow rates on one of thier producers in the next week or so.

 

[bordercityfirm]

welcome aboard knackers007,

Target is alonely place at moment but I fell that it wont be like this for much longer. News is on the horizon as you say, I'll try and list them below (I've left the best until last).

Near term growth opportunities:

East chalkley Oil Field has mean estimated recoverable reserves of 2.1 million barrels of oil (BO) and an upside estimate of 4 million BO.
The Pine Pasture #2 well is presently on production at a rate of approximately 90 barrels of oil per day (bopd). A pump upgrade in June 2009 is expected to restore the production rate to approximately 120 bopd. The Independent Technical Specialist, Risc Pty Ltd, has confirmed the potential for the next two wells to add reserves of between 250,000 BO and 450,000 BO each, with successful wells each expected to flow at rates of up to 200 bopd. · This is a key asset of Target Energy with estimated Proved and Probable (2P) recoverable reserves (net to Target Energy's working interest) of 141,000 BO and additional Possible reserves of 123,000 BO, giving a Proved, Probable and Possible (3P) total of 264,000 BO. The field has additional contingent resources ranging from 230,000 BO (2C) to 686,000 BO (3C). Total 2P plus 2C potential is 371,000 BO net to Target
Energy's working interest. Total 3P plus 3C potential is 950,000 BO net to Target Energy's working interest. Upon development, this field is expected have a long life and potential to add significant cash flow to Target Energy.
· Target Energy has a 25% working interest in this project and a 68.5% net revenue interest (NRI).

Snapper #A-1, #A-2 and #A-3
· Snapper #A-1 and #A-2 are currently in production. A third well, Snapper #A-3, has been drilled and flow results are due any time soon: Target Energy has net Proved and Probable oil reserves of 81,830 barrels and Possible oil reserves of 8,140 barrels (total 89,970 barrels); net proved and probable gas reserves of 626 million cubic feet of gas and possible gas reserves of 309 million cubic feet of gas (total 935.7 million cubic feet).
· Snapper #A-3 has penetrated 6 pay zones (30m of gross sand), with a total risked recoverable potential of up to 4.2 billion cubic feet of gas (4.2 Bcf) gas and 331,000 BO. It will test both proven undeveloped reserves as
well as zones which as yet remain untested. Harper & Associates, Inc (in its Technical Specialist Report) has included 9,210 BO and 454 million cubic feet of 3P reserves from Snapper #A-3 in the total above.
· Target Energy has a 25% working interest in Snapper #A-1, #A-2 and 21.625%-25% working interest in Snapper #A-3. It has a 72% NRI in all wells.

exploration

Bayou Berard * Beyt # 1A· Planned drilling in 3rd quarter will address this prospect that has estimated recoverable oil of 750,000 BO potential (112,000 BO net to Target Energy's working interest).· Risc Pty Ltd (in its Technical Specialist Report) has estimated that a successful well may initially flow at rates up to 1,500 bopd. · Target Energy has a 15% working interest in the Beyt #1A prospect and a 72% NRI .

TEXAS: Highway 71 prospect

Target is earning a 25% working interest in the Highway 71 prospect, situated in Wharton County Texas, approximately 100 kilometres west-southwest of Houston.
Drilling is presently planned to commence later in October and is expected to take six weeks to drill to the programmed Total Depth of 4,115 metres (13,500 feet). The well is to be drilled on a “turn-key” contract. The rig is scheduled to mobilise to the Highway 71 prospect directly after its current well.
The prospect has the potential to recover up to 52.5 Bcf + 367,000 BC
from it's primary target (1primary 1st st and 2 2nd nd Meek Sst Sst) and 15.0 Bcf + 750,000 BC from it's secondary target (Upper Wilcox Sst Sst). The Prospect has ben mapped on Hollimon proprietary 3Dproprietary 3D. It's on trend with other Meek Sandstone Fields, including 25 Bcf/400,000 BC New Taiton Field. And is 3 kilometres west of 40 Bcf/1.7 million BC Upper Wilcox Jones Creek Field (which began as a Hollimon prospect).
In the event of success, the effect of encountering reserves of such magnitude would increase Target’s current net reserves / resources position by over 330%.

 

[bordercityfirm]

What do we know about the Meek Sandstone and Wilcox Sandstone?

The Wilcox formation is composed of gas-producing sandstone. High-temperature, high-pressure formations such as the Wilcox have reported temperatures of 350 °F and above with typical geo-pressured conditions found below 12,000 ft in the onshore Texas Gulf Coast area. Zones of interest are located at ~15,500 to 15,700 ft TVD with porosities ranging from ~26 to 30%, and permeability of 0.001 md.


Have a look at Strike Oil September 2009 presentation http://www.stocknessmonster.com/news-item?S=STX&E=ASX&N=458584

TWO PRODUCING FIELDS: Rayburn and Mesquite (estimated ultimate recovery: 71 Bcfe) both producing from the Meek Sandstone and Wilcox Sandstone.

Have a look at Sun Resources Quarterly Report For The Period Ending 31 March 2009

http://www.abnnewswire.net/press/en/60551/Sun-Resources-Nl.html'

 

[knackers007]

BorderCityFirm.

Thanks very much for all the information, it was very helpfull.

Looking forward to seeing the results of Snapper A3 and Highway 71 in the future!

 

[bordercityfirm]

Prime time to buy and accumulation happening at the moment. Funny to see small sells right at the end of day, standard accumation happening IMO

 

[bordercityfirm]

Just the start of the good news: Great time to buy US assets.

TARGET INCREASES INTEREST IN EAST CHALKLEY OIL FIELD
HIGHWAY 71 SCHEDULED TO DRILL IN OCTOBER
Target Energy Limited (“Target”) (ASX CODE: TEX) is pleased to advise that it has agreed to purchase additional interest in its East Chalkley oil field in Cameron Parish, Louisiana, subject only to the finalisation of a Sale Purchase Agreement. As a result of the transaction, Target will increase its working interest to 35% across the field.
This increase from the Company’s current 25% working interest will augment its existing reserves and production associated with the field by 40% and represents an approximate 27% increase in Target Energy’s net reserves and resources from 0.977 million barrels of oil equivalent (mmBOE)(31/12/08 audit) to 1.237 mmBOE.
Current field production, from the Pine Pasture #2 well, is approximately 83 barrels of oil per day (BOPD); additional field appraisal and development operations are planned for later in 2009.
The cost of the acquisition is US$500,000. The effective date for this purchase will be 1 November 2009.
Managing Director Laurence Roe commented, “This is an important step forward for us in consolidating our reserves and cash flow position from the East Chalkley Oil Field. We believe the field has a lot to offer and we are looking forward to progressing our appraisal and development campaigns in the near future.
In the meantime, we note that drilling at our exciting Highway 71 prospect remains scheduled to commence later this month, with the rig planned to move to our prospect after finishing at its current well. If successful, Highway 71 has the potential to recover up to a gross 67.5 Bcf of gas with 1.1 million barrels of condensate. This is equivalent to 12.35 mmBOE, of which Target Energy’s net interest would be to 2.27 mmBOE which would add substantially to our net hydrocarbon position.”

This means that the $500k investment will be paid back in 2 years at current flow rate and price of oil (profit in 2 years!). Not a bad investment, small but long term money in the bank year in year out.

In 2011 the Pine Pasture #2 well will be making $774,037 profit, if oil goes to $100 a barrell that will be $1,060,325 profit a year so all in all not a bad investment.

 

[bordercityfirm]

some interesting thoughts from another forum:

Target Energy's geology team has over 55 years experience combined. I was very impressed by my research. Mike Martin a geologist with 25 years experience and Gerry McGann Director (over 30 years experience) who's success with Incremental Petroleum is worth noting, of which he was a founding shareholder and Managing Director. Its first well in its 2008 appraisal program in the Edirne gas field in Turkey intersected three times the amount of gas pay that was initially forecast. He also was responsible for increasing Incrementals 8217's# hydrocarbon reserves from nil in 2005 to over 16 million barrels of oil equivalent in 2009(one of the largest reserve bases in the sector on the ASX).

Incremental was then targeted by Cooper Energy and later successfully taken over by TransAtlantic Petroleum. With a knowledgeable Geology team I am confident of Target Energys success in Highway 71# and other campaigns.

and..

Welcome drillah to Target energy (is this your first post?) and here's me thinking that Target was dead as a dodo!

Looks like you have done your research personally didn't look at the geologist that they had on board but as you say they are experienced campaigners. The news out today really underlines their thinking: paying US$500,000 for +25year (well life) well that's producing 83bbls a day. I know that doesn't sound a lot, but that us$500k will be paid back in over 2years! the rest is profit.

What does that mean, well it means that we won't be getting rich quick....but it does mean that they are cash flow positive and in 2 years they can drill another Highway 71 type prospect every year off that one well....sounds good to me.

If the Highway 71 is a gusher then this will be rerated very quickly. They will have the money to do what they want.....AND YOU WILL GET RICH, IMO

3D seismic that Hollimon Corp have used have been very successful. The well is on trend in a known oil and gas area (rather than in the middle of desert basin....um um middle of oz!) will be easily connected to the all ready in place pipe system.

Remember that TEX had to resist a hostile take-over this year as the board said that the offer was undervalued (94% of share holders who are happy to hold their shares voted no)...what does that tell you? This is what the board said to the 8c offer

"Grant Thornton, the Independent Expert, has determined in its report dated 12 May 2009 that the fair value of a Target Energy Share is in the range of 10 cents and 13.8 cents per share, with a midpoint value of 11.9 cents per share."

see link

And that was without the extra East Chalkley oil and certainly without Highway 71....um and you can now buy these at 5.4c bargain IMO. And remember there is only 156,409,638 shares on the market, that's only a 8.8mil cap (undiluted with options as of yet).

Welcome aboard Drillah!

 

[knackers007]

Monday 19th October is the last day shareholders can take up the rights offer with free attaching option. Here is a letter sent by the GM to everyone who has signed up for their newsletter.

Dear Shareholder,

As you know our rights issue closes at 5pm WST on Monday, 19 October 2009. While most of the buying is channelled into the rights issue, the share price in the market is holding at 5.5 cents (yesterday's close). The one for one free attaching option is now listed under the ASX code TEXOB and is currently strongly bid up to 1.1 cents. The oil price continues its strong run and was at US$78 this morning. As per the announcement issued by the Company on 13 October 2009, Target increased its interest in East Chalkley Oil Field increasing its reserves and expects to spud the exciting Highway 71 prospect which will target 67.5Bcf of gas and 1.1 million barrels of condensate in about 10 days, on or about 26 October. We strongly encourage you to participate in the rights issue which closes at 5pm WST on Monday, 19 October 2009. Please note that shareholders can apply and pay by BPay using the reference code on their personal entitlement form. Valid applications received prior to the closing date will be accepted. Shareholders can apply for their entitlements and for additional shares. The issue is fully underwritten by Patersons Securities Limited.

Yours faithfully

Laurence Roe
Managing Director
16 October 2009

The results of Snapper A3 flow rates are also out this week. (as per previous announcements) I think anywhere from 25-40 BOPD (for TEX's share) would be a good result.

 

[bordercityfirm]

knackers007,

We'll see where the share price heads now since with have passed the 19th of Oct. I've been pleased with the way it has held up around the 5.5c. I've been buying and haven't had to chase which is always a bonus. Money still available to buy off that desperate seller.

I would love to a 100+ bbl a day notice, the market probably wouldn't like it, more interested in pipe dreams in the middle of the desert.

50bbls a day is US$365, 000 a year to TEX
100bbls a day is US$730,000 a year to TEX
150bbls a day is US$1,095,000 a year to TEX

 

[knackers007]

Surely the flow rates are due in very soon??? Going by previous announcements, I would have thought they would have been ready last week or at least this week. Perhaps delayed due to capitol raising.

 

[bordercityfirm]

Perhaps delayed due to capitol raising......why what have you heard? they have just done one, haven't they at 5.5c?

 

[blues]

I have emailed LR with a couple of questions one being when flow rates will be available for Snapper A-3.Will let you know the response.

Cheers.

 

[knackers007]

bordercityfirm.

I meant to say that perhaps they have delayed the flow rates results due to the capitol raising they just completed.